    [Congressional Bills 111th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 4872 Reported in House (RH)]

                                                     Union Calendar No. 256
    111th CONGRESS
      2d Session
                                    H. R. 4872

    To provide for reconciliation pursuant to section 202 of the concurrent
                 resolution on the budget for fiscal year 2010.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                                 March 17, 2010

      Mr. Spratt from the Committee on the Budget, reported the following
     bill; which was committed to the Committee of the Whole House on the
                  State of the Union and ordered to be printed

    _______________________________________________________________________

                                     A BILL

    To provide for reconciliation pursuant to section 202 of the concurrent
                 resolution on the budget for fiscal year 2010.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Reconciliation Act of 2010''.

    SEC. 2. TABLE OF CONTENTS.

        The table of divisions is as follows:

       DIVISION I--HOUSE COMMITTEE ON WAYS AND MEANS: HEALTH CARE REFORM

    DIVISION II--HOUSE COMMITTEE ON EDUCATION AND LABOR: HEALTH CARE REFORM

      DIVISION III--HOUSE COMMITTEE ON EDUCATION AND LABOR: INVESTING IN
                                   EDUCATION

          DIVISION I--COMMITTEE ON WAYS AND MEANS: HEALTH CARE REFORM

    SEC. 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, AND SUBTITLES.

        (a) Short Title.--This division may be cited as the ``America's
    Affordable Health Choices Act of 2009''.
        (b) Table of Subdivisions, Titles, and Subtitles.--This division is
    divided into subdivisions, titles, and subtitles as follows:

                 Subdivision A--Affordable Health Care Choices

    Title I--Protections and Standards for Qualified Health Benefits Plans
    Subtitle A--General Standards
    Subtitle B--Standards Guaranteeing Access to Affordable Coverage
    Subtitle C--Standards Guaranteeing Access to Essential Benefits
    Subtitle D--Additional Consumer Protections
    Subtitle E--Governance
    Subtitle F--Relation to other requirements; Miscellaneous
    Subtitle G--Early Investments
    Title II--Health Insurance Exchange and Related Provisions
    Subtitle A--Health Insurance Exchange
    Subtitle B--Public health insurance option
    Subtitle C--Individual Affordability Credits
    Title III--Shared responsibility
    Subtitle A--Individual responsibility
    Subtitle B--Employer Responsibility
    Title IV--Amendments to Internal Revenue Code of 1986
    Subtitle A--Shared responsibility
    Subtitle B--Credit for small business employee health coverage expenses
    Subtitle C--Disclosures to carry out health insurance exchange
                                subsidies
    Subtitle D--Other revenue provisions
               Subdivision B--Medicare and Medicaid Improvements

    Title I--Improving Health Care Value
    Subtitle A--Provisions related to Medicare part A
    Subtitle B--Provisions Related to Part B
    Subtitle C--Provisions Related to Medicare Parts A and B
    Subtitle D--Medicare Advantage Reforms
    Subtitle E--Improvements to Medicare Part D
    Subtitle F--Medicare Rural Access Protections
    Title II--Medicare Beneficiary Improvements
    Subtitle A--Improving and Simplifying Financial Assistance for Low
                                Income Medicare Beneficiaries
    Subtitle B--Reducing Health Disparities
    Subtitle C--Miscellaneous Improvements
    Title III--Promoting Primary Care, Mental Health Services, and
                                Coordinated Care
    Title IV--Quality
    Subtitle A--Comparative Effectiveness Research
    Subtitle B--Nursing Home Transparency
    Subtitle C--Quality Measurements
    Subtitle D--Physician Payments Sunshine Provision
    Subtitle E--Public Reporting on Health Care-Associated Infections
    Title V--Medicare Graduate Medical Education
    Title VI--Program Integrity
    Subtitle A--Increased funding to fight waste, fraud, and abuse
    Subtitle B--Enhanced penalties for fraud and abuse
    Subtitle C--Enhanced Program and Provider Protections
    Subtitle D--Access to Information Needed to Prevent Fraud, Waste, and
                                Abuse
    Title VII--Medicaid and CHIP
    Subtitle A--Medicaid and Health Reform
    Subtitle B--Prevention
    Subtitle C--Access
    Subtitle D--Coverage
    Subtitle E--Financing
    Subtitle F--Waste, Fraud, and Abuse
    Subtitle G--Puerto Rico and the Territories
    Subtitle H--Miscellaneous
    Title VIII--Revenue-related provisions
    Title IX--Miscellaneous Provisions
             Subdivision C--Public Health and Workforce Development

    Title I--Community Health Centers
    Title II--Workforce
    Subtitle A--Primary care workforce
    Subtitle B--Nursing workforce
    Subtitle C--Public Health Workforce
    Subtitle D--Adapting workforce to evolving health system needs
    Title III--Prevention and Wellness
    Title IV--Quality and Surveillance
    Title V--Other provisions
    Subtitle A--Drug discount for rural and other hospitals
    Subtitle B--School-Based health clinics
    Subtitle C--National medical device registry
    Subtitle D--Grants for comprehensive programs To provide education to
                                nurses and create a pipeline to nursing
    Subtitle E--States failing To adhere to certain employment obligations

                 SUBDIVISION A--AFFORDABLE HEALTH CARE CHOICES

    SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; GENERAL
                  DEFINITIONS.

        (a) Purpose.--
                (1) In general.--The purpose of this subdivision is to
            provide affordable, quality health care for all Americans and
            reduce the growth in health care spending.
                (2) Building on current system.--This subdivision achieves
            this purpose by building on what works in today's health care
            system, while repairing the aspects that are broken.
                (3) Insurance reforms.--This subdivision--
                        (A) enacts strong insurance market reforms;
                        (B) creates a new Health Insurance Exchange, with a
                    public health insurance option alongside private plans;
                        (C) includes sliding scale affordability credits;
                    and
                        (D) initiates shared responsibility among workers,
                    employers, and the government;
            so that all Americans have coverage of essential health
            benefits.
                (4) Health delivery reform.--This subdivision institutes
            health delivery system reforms both to increase quality and to
            reduce growth in health spending so that health care becomes
            more affordable for businesses, families, and government.
        (b) Table of Contents of Subdivision.--The table of contents of
    this subdivision is as follows:

    Sec. 100. Purpose; table of contents of subdivision; general
                                definitions.
     TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                         Subtitle A--General Standards

    Sec. 101. Requirements reforming health insurance marketplace.
    Sec. 102. Protecting the choice to keep current coverage.
        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    Sec. 111. Prohibiting pre-existing condition exclusions.
    Sec. 112. Guaranteed issue and renewal for insured plans.
    Sec. 113. Insurance rating rules.
    Sec. 114. Nondiscrimination in benefits; parity in mental health and
                                substance abuse disorder benefits.
    Sec. 115. Ensuring adequacy of provider networks.
    Sec. 116. Ensuring value and lower premiums.
        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    Sec. 121. Coverage of essential benefits package.
    Sec. 122. Essential benefits package defined.
    Sec. 123. Health Benefits Advisory Committee.
    Sec. 124. Process for adoption of recommendations; adoption of benefit
                                standards.
                  Subtitle D--Additional Consumer Protections

    Sec. 131. Requiring fair marketing practices by health insurers.
    Sec. 132. Requiring fair grievance and appeals mechanisms.
    Sec. 133. Requiring information transparency and plan disclosure.
    Sec. 134. Application to qualified health benefits plans not offered
                                through the Health Insurance Exchange.
    Sec. 135. Timely payment of claims.
    Sec. 136. Standardized rules for coordination and subrogation of
                                benefits.
    Sec. 137. Application of administrative simplification.
                             Subtitle E--Governance

    Sec. 141. Health Choices Administration; Health Choices Commissioner.
    Sec. 142. Duties and authority of Commissioner.
    Sec. 143. Consultation and coordination.
    Sec. 144.  Health Insurance Ombudsman.
           Subtitle F--Relation to Other Requirements; Miscellaneous

    Sec. 151. Relation to other requirements.
    Sec. 152. Prohibiting discrimination in health care.
    Sec. 153. Whistleblower protection.
    Sec. 154. Construction regarding collective bargaining.
    Sec. 155. Severability.
                         Subtitle G--Early Investments

    Sec. 161. Ensuring value and lower premiums.
    Sec. 162. Ending health insurance rescission abuse.
    Sec. 163. Administrative simplification.
    Sec. 164. Reinsurance program for retirees.
           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

    Sec. 201. Establishment of Health Insurance Exchange; outline of
                                duties; definitions.
    Sec. 202. Exchange-eligible individuals and employers.
    Sec. 203. Benefits package levels.
    Sec. 204. Contracts for the offering of Exchange-participating health
                                benefits plans.
    Sec. 205. Outreach and enrollment of Exchange-eligible individuals and
                                employers in Exchange-participating health
                                benefits plan.
    Sec. 206. Other functions.
    Sec. 207. Health Insurance Exchange Trust Fund.
    Sec. 208. Optional operation of State-based health insurance exchanges.
                   Subtitle B--Public Health Insurance Option

    Sec. 221. Establishment and administration of a public health insurance
                                option as an Exchange-qualified health
                                benefits plan.
    Sec. 222. Premiums and financing.
    Sec. 223. Payment rates for items and services.
    Sec. 224. Modernized payment initiatives and delivery system reform.
    Sec. 225. Provider participation.
    Sec. 226. Application of fraud and abuse provisions.
                  Subtitle C--Individual Affordability Credits

    Sec. 241. Availability through Health Insurance Exchange.
    Sec. 242. Affordable credit eligible individual.
    Sec. 243. Affordable premium credit.
    Sec. 244. Affordability cost-sharing credit.
    Sec. 245. Income determinations.
    Sec. 246. No Federal payment for undocumented aliens.
                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    Sec. 301. Individual responsibility.
                      Subtitle B--Employer Responsibility

               Part 1--Health Coverage Participation Requirements

    Sec. 311. Health coverage participation requirements.
    Sec. 312. Employer responsibility to contribute towards employee and
                                dependent coverage.
    Sec. 313. Employer contributions in lieu of coverage.
    Sec. 314. Authority related to improper steering.
       Part 2--Satisfaction of Health Coverage Participation Requirements

    Sec. 321. Satisfaction of health coverage participation requirements
                                under the Employee Retirement Income
                                Security Act of 1974.
    Sec. 322. Satisfaction of health coverage participation requirements
                                under the Internal Revenue Code of 1986.
    Sec. 323. Satisfaction of health coverage participation requirements
                                under the Public Health Service Act.
    Sec. 324. Additional rules relating to health coverage participation
                                requirements.
             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

                       Part 1--Individual Responsibility

    Sec. 401. Tax on individuals without acceptable health care coverage.
                        Part 2--Employer Responsibility

    Sec. 411. Election to satisfy health coverage participation
                                requirements.
    Sec. 412. Responsibilities of nonelecting employers.
    Subtitle B--Credit for Small Business Employee Health Coverage Expenses

    Sec. 421. Credit for small business employee health coverage expenses.
        Subtitle C--Disclosures to Carry Out Health Insurance Exchange
                                   Subsidies

    Sec. 431. Disclosures to carry out health insurance exchange subsidies.
                      Subtitle D--Other Revenue Provisions

                           Part 1--General Provisions

    Sec. 441. Surcharge on high income individuals.
    Sec. 442. Distributions for medicine qualified only if for prescribed
                                drug or insulin.
    Sec. 443. Delay in application of worldwide allocation of interest.
                      Part 2--Prevention of Tax Avoidance

    Sec. 451. Limitation on treaty benefits for certain deductible
                                payments.
    Sec. 452. Codification of economic substance doctrine.
    Sec. 453. Penalties for underpayments.
                       Part 3--Parity in Health Benefits

    Sec. 461. Certain health related benefits applicable to spouses and
                                dependents extended to eligible
                                beneficiaries.
        (c) General Definitions.--Except as otherwise provided, in this
    subdivision:
                (1) Acceptable coverage.--The term ``acceptable coverage''
            has the meaning given such term in section 202(d)(2).
                (2) Basic plan.--The term ``basic plan'' has the meaning
            given such term in section 203(c).
                (3) Commissioner.--The term ``Commissioner'' means the
            Health Choices Commissioner established under section 141.
                (4) Cost-sharing.--The term ``cost-sharing'' includes
            deductibles, coinsurance, copayments, and similar charges but
            does not include premiums or any network payment differential
            for covered services or spending for non-covered services.
                (5) Dependent.--The term ``dependent'' has the meaning
            given such term by the Commissioner and includes a spouse.
                (6) Employment-based health plan.--The term ``employment-
            based health plan''--
                        (A) means a group health plan (as defined in
                    section 733(a)(1) of the Employee Retirement Income
                    Security Act of 1974); and
                        (B) includes such a plan that is the following:
                                (i) Federal, state, and tribal governmental
                            plans.--A governmental plan (as defined in
                            section 3(32) of the Employee Retirement Income
                            Security Act of 1974), including a health
                            benefits plan offered under chapter 89 of title
                            5, United States Code.
                                (ii) Church plans.--A church plan (as
                            defined in section 3(33) of the Employee
                            Retirement Income Security Act of 1974).
                (7) Enhanced plan.--The term ``enhanced plan'' has the
            meaning given such term in section 203(c).
                (8) Essential benefits package.--The term ``essential
            benefits package'' is defined in section 122(a).
                (9) Family.--The term ``family'' means an individual and
            includes the individual's dependents.
                (10) Federal poverty level; fpl.--The terms ``Federal
            poverty level'' and ``FPL'' have the meaning given the term
            ``poverty line'' in section 673(2) of the Community Services
            Block Grant Act (42 U.S.C. 9902(2)), including any revision
            required by such section.
                (11) Health benefits plan.--The terms ``health benefits
            plan'' means health insurance coverage and an employment-based
            health plan and includes the public health insurance option.
                (12) Health insurance coverage; health insurance issuer.--
            The terms ``health insurance coverage'' and ``health insurance
            issuer'' have the meanings given such terms in section 2791 of
            the Public Health Service Act.
                (13) Health insurance exchange.--The term ``Health
            Insurance Exchange'' means the Health Insurance Exchange
            established under section 201.
                (14) Medicaid.--The term ``Medicaid'' means a State plan
            under title XIX of the Social Security Act (whether or not the
            plan is operating under a waiver under section 1115 of such
            Act).
                (15) Medicare.--The term ``Medicare'' means the health
            insurance programs under title XVIII of the Social Security
            Act.
                (16) Plan sponsor.--The term ``plan sponsor'' has the
            meaning given such term in section 3(16)(B) of the Employee
            Retirement Income Security Act of 1974.
                (17) Plan year.--The term ``plan year'' means--
                        (A) with respect to an employment-based health
                    plan, a plan year as specified under such plan; or
                        (B) with respect to a health benefits plan other
                    than an employment-based health plan, a 12-month period
                    as specified by the Commissioner.
                (18) Premium plan; premium-plus plan.--The terms ``premium
            plan'' and ``premium-plus plan'' have the meanings given such
            terms in section 203(c).
                (19) QHBP offering entity.--The terms ``QHBP offering
            entity'' means, with respect to a health benefits plan that
            is--
                        (A) a group health plan (as defined, subject to
                    subsection (d), in section 733(a)(1) of the Employee
                    Retirement Income Security Act of 1974), the plan
                    sponsor in relation to such group health plan, except
                    that, in the case of a plan maintained jointly by 1 or
                    more employers and 1 or more employee organizations and
                    with respect to which an employer is the primary source
                    of financing, such term means such employer;
                        (B) health insurance coverage, the health insurance
                    issuer offering the coverage;
                        (C) the public health insurance option, the
                    Secretary of Health and Human Services;
                        (D) a non-Federal governmental plan (as defined in
                    section 2791(d) of the Public Health Service Act), the
                    State or political subdivision of a State (or agency or
                    instrumentality of such State or subdivision) which
                    establishes or maintains such plan; or
                        (E) a Federal governmental plan (as defined in
                    section 2791(d) of the Public Health Service Act), the
                    appropriate Federal official.
                (20) Qualified health benefits plan.--The term ``qualified
            health benefits plan'' means a health benefits plan that meets
            the requirements for such a plan under title I and includes the
            public health insurance option.
                (21) Public health insurance option.--The term ``public
            health insurance option'' means the public health insurance
            option as provided under subtitle B of title II.
                (22) Service area; premium rating area.--The terms
            ``service area'' and ``premium rating area'' mean with respect
            to health insurance coverage--
                        (A) offered other than through the Health Insurance
                    Exchange, such an area as established by the QHBP
                    offering entity of such coverage in accordance with
                    applicable State law; and
                        (B) offered through the Health Insurance Exchange,
                    such an area as established by such entity in
                    accordance with applicable State law and applicable
                    rules of the Commissioner for Exchange-participating
                    health benefits plans.
                (23) State.--The term ``State'' means the 50 States and the
            District of Columbia.
                (24) State medicaid agency.--The term ``State Medicaid
            agency'' means, with respect to a Medicaid plan, the single
            State agency responsible for administering such plan under
            title XIX of the Social Security Act.
                (25) Y1, y2, etc..--The terms ``Y1'' , ``Y2'', ``Y3'',
            ``Y4'', ``Y5'', and similar subsequently numbered terms, mean
            2013 and subsequent years, respectively.

     TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                         Subtitle A--General Standards

    SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.

        (a) Purpose.--The purpose of this title is to establish standards
    to ensure that new health insurance coverage and employment-based
    health plans that are offered meet standards guaranteeing access to
    affordable coverage, essential benefits, and other consumer
    protections.
        (b) Requirements for Qualified Health Benefits Plans.--On or after
    the first day of Y1, a health benefits plan shall not be a qualified
    health benefits plan under this subdivision unless the plan meets the
    applicable requirements of the following subtitles for the type of plan
    and plan year involved:
                (1) Subtitle B (relating to affordable coverage).
                (2) Subtitle C (relating to essential benefits).
                (3) Subtitle D (relating to consumer protection).
        (c) Terminology.--In this subdivision:
                (1) Enrollment in employment-based health plans.--An
            individual shall be treated as being ``enrolled'' in an
            employment-based health plan if the individual is a participant
            or beneficiary (as such terms are defined in section 3(7) and
            3(8), respectively, of the Employee Retirement Income Security
            Act of 1974) in such plan.
                (2) Individual and group health insurance coverage.--The
            terms ``individual health insurance coverage'' and ``group
            health insurance coverage'' mean health insurance coverage
            offered in the individual market or large or small group
            market, respectively, as defined in section 2791 of the Public
            Health Service Act.

    SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

        (a) Grandfathered Health Insurance Coverage Defined.--Subject to
    the succeeding provisions of this section, for purposes of establishing
    acceptable coverage under this subdivision, the term ``grandfathered
    health insurance coverage'' means individual health insurance coverage
    that is offered and in force and effect before the first day of Y1 if
    the following conditions are met:
                (1) Limitation on new enrollment.--
                        (A) In general.--Except as provided in this
                    paragraph, the individual health insurance issuer
                    offering such coverage does not enroll any individual
                    in such coverage if the first effective date of
                    coverage is on or after the first day of Y1.
                        (B) Dependent coverage permitted.--Subparagraph (A)
                    shall not affect the subsequent enrollment of a
                    dependent of an individual who is covered as of such
                    first day.
                (2) Limitation on changes in terms or conditions.--Subject
            to paragraph (3) and except as required by law, the issuer does
            not change any of its terms or conditions, including benefits
            and cost-sharing, from those in effect as of the day before the
            first day of Y1.
                (3) Restrictions on premium increases.--The issuer cannot
            vary the percentage increase in the premium for a risk group of
            enrollees in specific grandfathered health insurance coverage
            without changing the premium for all enrollees in the same risk
            group at the same rate, as specified by the Commissioner.
        (b) Grace Period for Current Employment-based Health Plans.--
                (1) Grace period.--
                        (A) In general.--The Commissioner shall establish a
                    grace period whereby, for plan years beginning after
                    the end of the 5-year period beginning with Y1, an
                    employment-based health plan in operation as of the day
                    before the first day of Y1 must meet the same
                    requirements as apply to a qualified health benefits
                    plan under section 101, including the essential benefit
                    package requirement under section 121.
                        (B) Exception for limited benefits plans.--
                    Subparagraph (A) shall not apply to an employment-based
                    health plan in which the coverage consists only of one
                    or more of the following:
                                (i) Any coverage described in section
                            3001(a)(1)(B)(ii)(IV) of division B of the
                            American Recovery and Reinvestment Act of 2009
                            (PL 111-5).
                                (ii) Excepted benefits (as defined in
                            section 733(c) of the Employee Retirement
                            Income Security Act of 1974), including
                            coverage under a specified disease or illness
                            policy described in paragraph (3)(A) of such
                            section.
                                (iii) Such other limited benefits as the
                            Commissioner may specify.
                    In no case shall an employment-based health plan in
                    which the coverage consists only of one or more of the
                    coverage or benefits described in clauses (i) through
                    (iii) be treated as acceptable coverage under this
                    subdivision
                (2) Transitional treatment as acceptable coverage.--During
            the grace period specified in paragraph (1)(A), an employment-
            based health plan that is described in such paragraph shall be
            treated as acceptable coverage under this subdivision.
        (c) Limitation on Individual Health Insurance Coverage.--
                (1) In general.--Individual health insurance coverage that
            is not grandfathered health insurance coverage under subsection
            (a) may only be offered on or after the first day of Y1 as an
            Exchange-participating health benefits plan.
                (2) Separate, excepted coverage permitted.--Excepted
            benefits (as defined in section 2791(c) of the Public Health
            Service Act) are not included within the definition of health
            insurance coverage. Nothing in paragraph (1) shall prevent the
            offering, other than through the Health Insurance Exchange, of
            excepted benefits so long as it is offered and priced
            separately from health insurance coverage.

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.

        A qualified health benefits plan may not impose any pre-existing
    condition exclusion (as defined in section 2701(b)(1)(A) of the Public
    Health Service Act) or otherwise impose any limit or condition on the
    coverage under the plan with respect to an individual or dependent
    based on any health status-related factors (as defined in section
    2791(d)(9) of the Public Health Service Act) in relation to the
    individual or dependent.

    SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.

        The requirements of sections 2711 (other than subsections (c) and
    (e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and
    subsection (e)) of the Public Health Service Act, relating to
    guaranteed availability and renewability of health insurance coverage,
    shall apply to individuals and employers in all individual and group
    health insurance coverage, whether offered to individuals or employers
    through the Health Insurance Exchange, through any employment-based
    health plan, or otherwise, in the same manner as such sections apply to
    employers and health insurance coverage offered in the small group
    market, except that such section 2712(b)(1) shall apply only if, before
    nonrenewal or discontinuation of coverage, the issuer has provided the
    enrollee with notice of non-payment of premiums and there is a grace
    period during which the enrollees has an opportunity to correct such
    nonpayment. Rescissions of such coverage shall be prohibited except in
    cases of fraud as defined in sections 2712(b)(2) of such Act.

    SEC. 113. INSURANCE RATING RULES.

        (a) In General.--The premium rate charged for an insured qualified
    health benefits plan may not vary except as follows:
                (1) Limited age variation permitted.--By age (within such
            age categories as the Commissioner shall specify) so long as
            the ratio of the highest such premium to the lowest such
            premium does not exceed the ratio of 2 to 1.
                (2) By area.--By premium rating area (as permitted by State
            insurance regulators or, in the case of Exchange-participating
            health benefits plans, as specified by the Commissioner in
            consultation with such regulators).
                (3) By family enrollment.--By family enrollment (such as
            variations within categories and compositions of families) so
            long as the ratio of the premium for family enrollment (or
            enrollments) to the premium for individual enrollment is
            uniform, as specified under State law and consistent with rules
            of the Commissioner.
        (b) Study and Reports.--
                (1) Study.--The Commissioner, in coordination with the
            Secretary of Health and Human Services and the Secretary of
            Labor, shall conduct a study of the large group insured and
            self-insured employer health care markets. Such study shall
            examine the following:
                        (A) The types of employers by key characteristics,
                    including size, that purchase insured products versus
                    those that self-insure.
                        (B) The similarities and differences between
                    typical insured and self-insured health plans.
                        (C) The financial solvency and capital reserve
                    levels of employers that self-insure by employer size.
                        (D) The risk of self-insured employers not being
                    able to pay obligations or otherwise becoming
                    financially insolvent.
                        (E) The extent to which rating rules are likely to
                    cause adverse selection in the large group market or to
                    encourage small and mid size employers to self-insure
                (2) Reports.--Not later than 18 months after the date of
            the enactment of this Act, the Commissioner shall submit to
            Congress and the applicable agencies a report on the study
            conducted under paragraph (1). Such report shall include any
            recommendations the Commissioner deems appropriate to ensure
            that the law does not provide incentives for small and mid-size
            employers to self-insure or create adverse selection in the
            risk pools of large group insurers and self-insured employers.
            Not later than 18 months after the first day of Y1, the
            Commissioner shall submit to Congress and the applicable
            agencies an updated report on such study, including updates on
            such recommendations.

    SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND
                  SUBSTANCE ABUSE DISORDER BENEFITS.

        (a) Nondiscrimination in Benefits.--A qualified health benefits
    plan shall comply with standards established by the Commissioner to
    prohibit discrimination in health benefits or benefit structures for
    qualifying health benefits plans, building from sections 702 of
    Employee Retirement Income Security Act of 1974, 2702 of the Public
    Health Service Act, and section 9802 of the Internal Revenue Code of
    1986.
        (b) Parity in Mental Health and Substance Abuse Disorder
    Benefits.--To the extent such provisions are not superceded by or
    inconsistent with subtitle C, the provisions of section 2705 (other
    than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public
    Health Service Act shall apply to a qualified health benefits plan,
    regardless of whether it is offered in the individual or group market,
    in the same manner as such provisions apply to health insurance
    coverage offered in the large group market.

    SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

        (a) In General.--A qualified health benefits plan that uses a
    provider network for items and services shall meet such standards
    respecting provider networks as the Commissioner may establish to
    assure the adequacy of such networks in ensuring enrollee access to
    such items and services and transparency in the cost-sharing
    differentials between in-network coverage and out-of-network coverage.
        (b) Provider Network Defined.--In this subdivision, the term
    ``provider network'' means the providers with respect to which covered
    benefits, treatments, and services are available under a health
    benefits plan.

    SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

        (a) In General.--A qualified health benefits plan shall meet a
    medical loss ratio as defined by the Commissioner. For any plan year in
    which the qualified health benefits plan does not meet such medical
    loss ratio, QHBP offering entity shall provide in a manner specified by
    the Commissioner for rebates to enrollees of payment sufficient to meet
    such loss ratio.
        (b) Building on Interim Rules.--In implementing subsection (a), the
    Commissioner shall build on the definition and methodology developed by
    the Secretary of Health and Human Services under the amendments made by
    section 161 for determining how to calculate the medical loss ratio.
    Such methodology shall be set at the highest level medical loss ratio
    possible that is designed to ensure adequate participation by QHBP
    offering entities, competition in the health insurance market in and
    out of the Health Insurance Exchange, and value for consumers so that
    their premiums are used for services.

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

        (a) In General.--A qualified health benefits plan shall provide
    coverage that at least meets the benefit standards adopted under
    section 124 for the essential benefits package described in section 122
    for the plan year involved.
        (b) Choice of Coverage.--
                (1) Non-exchange-participating health benefits plans.--In
            the case of a qualified health benefits plan that is not an
            Exchange-participating health benefits plan, such plan may
            offer such coverage in addition to the essential benefits
            package as the QHBP offering entity may specify.
                (2) Exchange-participating health benefits plans.--In the
            case of an Exchange-participating health benefits plan, such
            plan is required under section 203 to provide specified levels
            of benefits and, in the case of a plan offering a premium-plus
            level of benefits, provide additional benefits.
                (3) Continuation of offering of separate excepted benefits
            coverage.--Nothing in this subdivision shall be construed as
            affecting the offering of health benefits in the form of
            excepted benefits (described in section 102(b)(1)(B)(ii)) if
            such benefits are offered under a separate policy, contract, or
            certificate of insurance.
        (c) No Restrictions on Coverage Unrelated to Clinical
    Appropriateness.--A qualified health benefits plan may not impose any
    restriction (other than cost-sharing) unrelated to clinical
    appropriateness on the coverage of the health care items and services.

    SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

        (a) In General.--In this subdivision, the term ``essential benefits
    package'' means health benefits coverage, consistent with standards
    adopted under section 124 to ensure the provision of quality health
    care and financial security, that--
                (1) provides payment for the items and services described
            in subsection (b) in accordance with generally accepted
            standards of medical or other appropriate clinical or
            professional practice;
                (2) limits cost-sharing for such covered health care items
            and services in accordance with such benefit standards,
            consistent with subsection (c);
                (3) does not impose any annual or lifetime limit on the
            coverage of covered health care items and services;
                (4) complies with section 115(a) (relating to network
            adequacy); and
                (5) is equivalent, as certified by Office of the Actuary of
            the Centers for Medicare & Medicaid Services, to the average
            prevailing employer-sponsored coverage.
        (b) Minimum Services to Be Covered.--The items and services
    described in this subsection are the following:
                (1) Hospitalization.
                (2) Outpatient hospital and outpatient clinic services,
            including emergency department services.
                (3) Professional services of physicians and other health
            professionals.
                (4) Such services, equipment, and supplies incident to the
            services of a physician's or a health professional's delivery
            of care in institutional settings, physician offices, patients'
            homes or place of residence, or other settings, as appropriate.
                (5) Prescription drugs.
                (6) Rehabilitative and habilitative services.
                (7) Mental health and substance use disorder services.
                (8) Preventive services, including those services
            recommended with a grade of A or B by the Task Force on
            Clinical Preventive Services and those vaccines recommended for
            use by the Director of the Centers for Disease Control and
            Prevention.
                (9) Maternity care.
                (10) Well baby and well child care and oral health, vision,
            and hearing services, equipment, and supplies at least for
            children under 21 years of age.
        (c) Requirements Relating to Cost-sharing and Minimum Actuarial
    Value.--
                (1) No cost-sharing for preventive services.--There shall
            be no cost-sharing under the essential benefits package for
            preventive items and services (as specified under the benefit
            standards), including well baby and well child care.
                (2) Annual limitation.--
                        (A) Annual limitation.--The cost-sharing incurred
                    under the essential benefits package with respect to an
                    individual (or family) for a year does not exceed the
                    applicable level specified in subparagraph (B).
                        (B) Applicable level.--The applicable level
                    specified in this subparagraph for Y1 is $5,000 for an
                    individual and $10,000 for a family. Such levels shall
                    be increased (rounded to the nearest $100) for each
                    subsequent year by the annual percentage increase in
                    the Consumer Price Index (United States city average)
                    applicable to such year.
                        (C) Use of copayments.--In establishing cost-
                    sharing levels for basic, enhanced, and premium plans
                    under this subsection, the Secretary shall, to the
                    maximum extent possible, use only copayments and not
                    coinsurance.
                (3) Minimum actuarial value.--
                        (A) In general.--The cost-sharing under the
                    essential benefits package shall be designed to provide
                    a level of coverage that is designed to provide
                    benefits that are actuarially equivalent to
                    approximately 70 percent of the full actuarial value of
                    the benefits provided under the reference benefits
                    package described in subparagraph (B).
                        (B) Reference benefits package described.--The
                    reference benefits package described in this
                    subparagraph is the essential benefits package if there
                    were no cost-sharing imposed.

    SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

        (a) Establishment.--
                (1) In general.--There is established a private-public
            advisory committee which shall be a panel of medical and other
            experts to be known as the Health Benefits Advisory Committee
            to recommend covered benefits and essential, enhanced, and
            premium plans.
                (2) Chair.--The Surgeon General shall be a member and the
            chair of the Health Benefits Advisory Committee.
                (3) Membership.--The Health Benefits Advisory Committee
            shall be composed of the following members, in addition to the
            Surgeon General:
                        (A) 9 members who are not Federal employees or
                    officers and who are appointed by the President.
                        (B) 9 members who are not Federal employees or
                    officers and who are appointed by the Comptroller
                    General of the United States in a manner similar to the
                    manner in which the Comptroller General appoints
                    members to the Medicare Payment Advisory Commission
                    under section 1805(c) of the Social Security Act.
                        (C) Such even number of members (not to exceed 8)
                    who are Federal employees and officers, as the
                    President may appoint.
            Such initial appointments shall be made not later than 60 days
            after the date of the enactment of this Act.
                (4) Terms.--Each member of the Health Benefits Advisory
            Committee shall serve a 3-year term on the Committee, except
            that the terms of the initial members shall be adjusted in
            order to provide for a staggered term of appointment for all
            such members.
                (5) Participation.--The membership of the Health Benefits
            Advisory Committee shall at least reflect providers, consumer
            representatives, employers, labor, health insurance issuers,
            experts in health care financing and delivery, experts in
            racial and ethnic disparities, experts in care for those with
            disabilities, representatives of relevant governmental
            agencies. and at least one practicing physician or other health
            professional and an expert on children's health and shall
            represent a balance among various sectors of the health care
            system so that no single sector unduly influences the
            recommendations of such Committee.
        (b) Duties.--
                (1) Recommendations on benefit standards.--The Health
            Benefits Advisory Committee shall recommend to the Secretary of
            Health and Human Services (in this subtitle referred to as the
            ``Secretary'') benefit standards (as defined in paragraph (4)),
            and periodic updates to such standards. In developing such
            recommendations, the Committee shall take into account
            innovation in health care and consider how such standards could
            reduce health disparities.
                (2) Deadline.--The Health Benefits Advisory Committee shall
            recommend initial benefit standards to the Secretary not later
            than 1 year after the date of the enactment of this Act.
                (3) Public input.--The Health Benefits Advisory Committee
            shall allow for public input as a part of developing
            recommendations under this subsection.
                (4) Benefit standards defined.--In this subtitle, the term
            ``benefit standards'' means standards respecting--
                        (A) the essential benefits package described in
                    section 122, including categories of covered
                    treatments, items and services within benefit classes,
                    and cost-sharing; and
                        (B) the cost-sharing levels for enhanced plans and
                    premium plans (as provided under section 203(c))
                    consistent with paragraph (5).
                (5) Levels of cost-sharing for enhanced and premium
            plans.--
                        (A) Enhanced plan.--The level of cost-sharing for
                    enhanced plans shall be designed so that such plans
                    have benefits that are actuarially equivalent to
                    approximately 85 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
                        (B) Premium plan.--The level of cost-sharing for
                    premium plans shall be designed so that such plans have
                    benefits that are actuarially equivalent to
                    approximately 95 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
        (c) Operations.--
                (1) Per diem pay.--Each member of the Health Benefits
            Advisory Committee shall receive travel expenses, including per
            diem in accordance with applicable provisions under subchapter
            I of chapter 57 of title 5, United States Code, and shall
            otherwise serve without additional pay.
                (2) Members not treated as federal employees.--Members of
            the Health Benefits Advisory Committee shall not be considered
            employees of the Federal government solely by reason of any
            service on the Committee.
                (3) Application of faca.--The Federal Advisory Committee
            Act (5 U.S.C. App.), other than section 14, shall apply to the
            Health Benefits Advisory Committee.
        (d) Publication.--The Secretary shall provide for publication in
    the Federal Register and the posting on the Internet website of the
    Department of Health and Human Services of all recommendations made by
    the Health Benefits Advisory Committee under this section.

    SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT
                  STANDARDS.

        (a) Process for Adoption of Recommendations.--
                (1) Review of recommended standards.--Not later than 45
            days after the date of receipt of benefit standards recommended
            under section 123 (including such standards as modified under
            paragraph (2)(B)), the Secretary shall review such standards
            and shall determine whether to propose adoption of such
            standards as a package.
                (2) Determination to adopt standards.--If the Secretary
            determines--
                        (A) to propose adoption of benefit standards so
                    recommended as a package, the Secretary shall, by
                    regulation under section 553 of title 5, United States
                    Code, propose adoption such standards; or
                        (B) not to propose adoption of such standards as a
                    package, the Secretary shall notify the Health Benefits
                    Advisory Committee in writing of such determination and
                    the reasons for not proposing the adoption of such
                    recommendation and provide the Committee with a further
                    opportunity to modify its previous recommendations and
                    submit new recommendations to the Secretary on a timely
                    basis.
                (3) Contingency.--If, because of the application of
            paragraph (2)(B), the Secretary would otherwise be unable to
            propose initial adoption of such recommended standards by the
            deadline specified in subsection (b)(1), the Secretary shall,
            by regulation under section 553 of title 5, United States Code,
            propose adoption of initial benefit standards by such deadline.
                (4) Publication.--The Secretary shall provide for
            publication in the Federal Register of all determinations made
            by the Secretary under this subsection.
        (b) Adoption of Standards.--
                (1) Initial standards.--Not later than 18 months after the
            date of the enactment of this Act, the Secretary shall, through
            the rulemaking process consistent with subsection (a), adopt an
            initial set of benefit standards.
                (2) Periodic updating standards.--Under subsection (a), the
            Secretary shall provide for the periodic updating of the
            benefit standards previously adopted under this section.
                (3) Requirement.--The Secretary may not adopt any benefit
            standards for an essential benefits package or for level of
            cost-sharing that are inconsistent with the requirements for
            such a package or level under sections 122 and 123(b)(5).

                  Subtitle D--Additional Consumer Protections

    SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.

        The Commissioner shall establish uniform marketing standards that
    all insured QHBP offering entities shall meet.

    SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.

        (a) In General.--A QHBP offering entity shall provide for timely
    grievance and appeals mechanisms that the Commissioner shall establish.
        (b) Internal Claims and Appeals Process.--Under a qualified health
    benefits plan the QHBP offering entity shall provide an internal claims
    and appeals process that initially incorporates the claims and appeals
    procedures (including urgent claims) set forth at section 2560.503-1 of
    title 29, Code of Federal Regulations, as published on November 21,
    2000 (65 Fed. Reg. 70246) and shall update such process in accordance
    with any standards that the Commissioner may establish.
        (c) External Review Process.--
                (1) In general.--The Commissioner shall establish an
            external review process (including procedures for expedited
            reviews of urgent claims) that provides for an impartial,
            independent, and de novo review of denied claims under this
            subdivision.
                (2) Requiring fair grievance and appeals mechanisms.--A
            determination made, with respect to a qualified health benefits
            plan offered by a QHBP offering entity, under the external
            review process established under this subsection shall be
            binding on the plan and the entity.
        (d) Construction.--Nothing in this section shall be construed as
    affecting the availability of judicial review under State law for
    adverse decisions under subsection (b) or (c), subject to section 151.

    SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

        (a) Accurate and Timely Disclosure.--
                (1) In general.--A qualified health benefits plan shall
            comply with standards established by the Commissioner for the
            accurate and timely disclosure of plan documents, plan terms
            and conditions, claims payment policies and practices, periodic
            financial disclosure, data on enrollment, data on
            disenrollment, data on the number of claims denials, data on
            rating practices, information on cost-sharing and payments with
            respect to any out-of-network coverage, and other information
            as determined appropriate by the Commissioner. The Commissioner
            shall require that such disclosure be provided in plain
            language.
                (2) Plain language.--In this subsection, the term ``plain
            language'' means language that the intended audience, including
            individuals with limited English proficiency, can readily
            understand and use because that language is clean, concise,
            well-organized, and follows other best practices of plain
            language writing.
                (3) Guidance.--The Commissioner shall develop and issue
            guidance on best practices of plain language writing.
        (b) Contracting Reimbursement.--A qualified health benefits plan
    shall comply with standards established by the Commissioner to ensure
    transparency to each health care provider relating to reimbursement
    arrangements between such plan and such provider.
        (c) Advance Notice of Plan Changes.--A change in a qualified health
    benefits plan shall not be made without such reasonable and timely
    advance notice to enrollees of such change.

    SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED
                  THROUGH THE HEALTH INSURANCE EXCHANGE.

        The requirements of the previous provisions of this subtitle shall
    apply to qualified health benefits plans that are not being offered
    through the Health Insurance Exchange only to the extent specified by
    the Commissioner.

    SEC. 135. TIMELY PAYMENT OF CLAIMS.

        A QHBP offering entity shall comply with the requirements of
    section 1857(f) of the Social Security Act with respect to a qualified
    health benefits plan it offers in the same manner an Medicare Advantage
    organization is required to comply with such requirements with respect
    to a Medicare Advantage plan it offers under part C of Medicare.

    SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF
                  BENEFITS.

        The Commissioner shall establish standards for the coordination and
    subrogation of benefits and reimbursement of payments in cases
    involving individuals and multiple plan coverage.

    SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.

        A QHBP offering entity is required to comply with standards for
    electronic financial and administrative transactions under section
    1173A of the Social Security Act, added by section 163(a).

                             Subtitle E--Governance

    SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.

        (a) In General.--There is hereby established, as an independent
    agency in the executive branch of the Government, a Health Choices
    Administration (in this subdivision referred to as the
    ``Administration'').
        (b) Commissioner.--
                (1) In general.--The Administration shall be headed by a
            Health Choices Commissioner (in this subdivision referred to as
            the ``Commissioner'') who shall be appointed by the President,
            by and with the advice and consent of the Senate.
                (2) Compensation; etc.--The provisions of paragraphs (2),
            (5), and (7) of subsection (a) (relating to compensation,
            terms, general powers, rulemaking, and delegation) of section
            702 of the Social Security Act (42 U.S.C. 902) shall apply to
            the Commissioner and the Administration in the same manner as
            such provisions apply to the Commissioner of Social Security
            and the Social Security Administration.

    SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.

        (a) Duties.--The Commissioner is responsible for carrying out the
    following functions under this subdivision:
                (1) Qualified plan standards.--The establishment of
            qualified health benefits plan standards under this title,
            including the enforcement of such standards in coordination
            with State insurance regulators and the Secretaries of Labor
            and the Treasury.
                (2) Health insurance exchange.--The establishment and
            operation of a Health Insurance Exchange under subtitle A of
            title II.
                (3) Individual affordability credits.--The administration
            of individual affordability credits under subtitle C of title
            II, including determination of eligibility for such credits.
                (4) Additional functions.--Such additional functions as may
            be specified in this subdivision.
        (b) Promoting Accountability.--
                (1) In general.--The Commissioner shall undertake
            activities in accordance with this subtitle to promote
            accountability of QHBP offering entities in meeting Federal
            health insurance requirements, regardless of whether such
            accountability is with respect to qualified health benefits
            plans offered through the Health Insurance Exchange or outside
            of such Exchange.
                (2) Compliance examination and audits.--
                        (A) In general.--The commissioner shall, in
                    coordination with States, conduct audits of qualified
                    health benefits plan compliance with Federal
                    requirements.   Such audits may include random
                    compliance audits and targeted audits in response to
                    complaints or other suspected non-compliance.
                        (B) Recoupment of costs in connection with
                    examination and audits.--The Commissioner is authorized
                    to recoup from qualified health benefits plans
                    reimbursement for the costs of such examinations and
                    audit of such QHBP offering entities.
        (c) Data Collection.--The Commissioner shall collect data for
    purposes of carrying out the Commissioner's duties, including for
    purposes of promoting quality and value, protecting consumers, and
    addressing disparities in health and health care and may share such
    data with the Secretary of Health and Human Services.
        (d) Sanctions Authority.--
                (1) In general.--In the case that the Commissioner
            determines that a QHBP offering entity violates a requirement
            of this title, the Commissioner may, in coordination with State
            insurance regulators and the Secretary of Labor, provide, in
            addition to any other remedies authorized by law, for any of
            the remedies described in paragraph (2).
                (2) Remedies.--The remedies described in this paragraph,
            with respect to a qualified health benefits plan offered by a
            QHBP offering entity, are--
                        (A) civil money penalties of not more than the
                    amount that would be applicable under similar
                    circumstances for similar violations under section
                    1857(g) of the Social Security Act;
                        (B) suspension of enrollment of individuals under
                    such plan after the date the Commissioner notifies the
                    entity of a determination under paragraph (1) and until
                    the Commissioner is satisfied that the basis for such
                    determination has been corrected and is not likely to
                    recur;
                        (C) in the case of an Exchange-participating health
                    benefits plan, suspension of payment to the entity
                    under the Health Insurance Exchange for individuals
                    enrolled in such plan after the date the Commissioner
                    notifies the entity of a determination under paragraph
                    (1) and until the Secretary is satisfied that the basis
                    for such determination has been corrected and is not
                    likely to recur; or
                        (D) working with State insurance regulators to
                    terminate plans for repeated failure by the offering
                    entity to meet the requirements of this title.
        (e) Standard Definitions of Insurance and Medical Terms.--The
    Commissioner shall provide for the development of standards for the
    definitions of terms used in health insurance coverage, including
    insurance-related terms.
        (f) Efficiency in Administration.--The Commissioner shall issue
    regulations for the effective and efficient administration of the
    Health Insurance Exchange and affordability credits under subtitle C,
    including, with respect to the determination of eligibility for
    affordability credits, the use of personnel who are employed in
    accordance with the requirements of title 5, United States Code, to
    carry out the duties of the Commissioner or, in the case of sections
    208 and 241(b)(2), the use of State personnel who are employed in
    accordance with standards prescribed by the Office of Personnel
    Management pursuant to section 208 of the Intergovernmental Personnel
    Act of 1970 (42 U.S.C. 4728).

    SEC. 143. CONSULTATION AND COORDINATION.

        (a) Consultation.--In carrying out the Commissioner's duties under
    this subdivision, the Commissioner, as appropriate, shall consult with
    at least with the following:
                (1) The National Association of Insurance Commissioners,
            State attorneys general, and State insurance regulators,
            including concerning the standards for insured qualified health
            benefits plans under this title and enforcement of such
            standards.
                (2) Appropriate State agencies, specifically concerning the
            administration of individual affordability credits under
            subtitle C of title II and the offering of Exchange-
            participating health benefits plans, to Medicaid eligible
            individuals under subtitle A of such title.
                (3) Other appropriate Federal agencies.
                (4) Indian tribes and tribal organizations.
                (5) The National Association of Insurance Commissioners for
            purposes of using model guidelines established by such
            association for purposes of subtitles B and D.
        (b) Coordination.--
                (1) In general.--In carrying out the functions of the
            Commissioner, including with respect to the enforcement of the
            provisions of this subdivision, the Commissioner shall work in
            coordination with existing Federal and State entities to the
            maximum extent feasible consistent with this subdivision and in
            a manner that prevents conflicts of interest in duties and
            ensures effective enforcement.
                (2) Uniform standards.--The Commissioner, in coordination
            with such entities, shall seek to achieve uniform standards
            that adequately protect consumers in a manner that does not
            unreasonably affect employers and insurers.

    SEC. 144. HEALTH INSURANCE OMBUDSMAN.

        (a) In General.--The Commissioner shall appoint within the Health
    Choices Administration a Qualified Health Benefits Plan Ombudsman who
    shall have expertise and experience in the fields of health care and
    education of (and assistance to) individuals.
        (b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in
    a linguistically appropriate manner--
                (1) receive complaints, grievances, and requests for
            information submitted by individuals;
                (2) provide assistance with respect to complaints,
            grievances, and requests referred to in paragraph (1),
            including--
                        (A) helping individuals determine the relevant
                    information needed to seek an appeal of a decision or
                    determination;
                        (B) assistance to such individuals with any
                    problems arising from disenrollment from such a plan;
                        (C) assistance to such individuals in choosing a
                    qualified health benefits plan in which to enroll; and
                        (D) assistance to such individuals in presenting
                    information under subtitle C (relating to affordability
                    credits); and
                (3) submit annual reports to Congress and the Commissioner
            that describe the activities of the Ombudsman and that include
            such recommendations for improvement in the administration of
            this subdivision as the Ombudsman determines appropriate. The
            Ombudsman shall not serve as an advocate for any increases in
            payments or new coverage of services, but may identify issues
            and problems in payment or coverage policies.

           Subtitle F--Relation to Other Requirements; Miscellaneous

    SEC. 151. RELATION TO OTHER REQUIREMENTS.

        (a) Coverage Not Offered Through Exchange.--
                (1) In general.--In the case of health insurance coverage
            not offered through the Health Insurance Exchange (whether or
            not offered in connection with an employment-based health
            plan), and in the case of employment-based health plans, the
            requirements of this title do not supercede any requirements
            applicable under titles XXII and XXVII of the Public Health
            Service Act, parts 6 and 7 of subtitle B of title I of the
            Employee Retirement Income Security Act of 1974, or State law,
            except insofar as such requirements prevent the application of
            a requirement of this subdivision, as determined by the
            Commissioner.
                (2) Construction.--Nothing in paragraph (1) shall be
            construed as affecting the application of section 514 of the
            Employee Retirement Income Security Act of 1974.
        (b) Coverage Offered Through Exchange.--
                (1) In general.--In the case of health insurance coverage
            offered through the Health Insurance Exchange--
                        (A) the requirements of this title do not supercede
                    any requirements (including requirements relating to
                    genetic information nondiscrimination and mental
                    health) applicable under title XXVII of the Public
                    Health Service Act or under State law, except insofar
                    as such requirements prevent the application of a
                    requirement of this subdivision, as determined by the
                    Commissioner; and
                        (B) individual rights and remedies under State laws
                    shall apply.
                (2) Construction.--In the case of coverage described in
            paragraph (1), nothing in such paragraph shall be construed as
            preventing the application of rights and remedies under State
            laws with respect to any requirement referred to in paragraph
            (1)(A).

    SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.

        (a) In General.--Except as otherwise explicitly permitted by this
    division and by subsequent regulations consistent with this division,
    all health care and related services (including insurance coverage and
    public health activities) covered by this division shall be provided
    without regard to personal characteristics extraneous to the provision
    of high quality health care or related services.
        (b) Implementation.--To implement the requirement set forth in
    subsection (a), the Secretary of Health and Human Services shall, not
    later than 18 months after the date of the enactment of this Act,
    promulgate such regulations as are necessary or appropriate to insure
    that all health care and related services (including insurance coverage
    and public health activities) covered by this division are provided
    (whether directly or through contractual, licensing, or other
    arrangements) without regard to personal characteristics extraneous to
    the provision of high quality health care or related services.

    SEC. 153. WHISTLEBLOWER PROTECTION.

        (a) Retaliation Prohibited.--No employer may discharge any employee
    or otherwise discriminate against any employee with respect to his
    compensation, terms, conditions, or other privileges of employment
    because the employee (or any person acting pursuant to a request of the
    employee)--
                (1) provided, caused to be provided, or is about to provide
            or cause to be provided to the employer, the Federal
            Government, or the attorney general of a State information
            relating to any violation of, or any act or omission the
            employee reasonably believes to be a violation of any provision
            of this division or any order, rule, or regulation promulgated
            under this division;
                (2) testified or is about to testify in a proceeding
            concerning such violation;
                (3) assisted or participated or is about to assist or
            participate in such a proceeding; or
                (4) objected to, or refused to participate in, any
            activity, policy, practice, or assigned task that the employee
            (or other such person) reasonably believed to be in violation
            of any provision of this division or any order, rule, or
            regulation promulgated under this division.
        (b) Enforcement Action.--An employee covered by this section who
    alleges discrimination by an employer in violation of subsection (a)
    may bring an action governed by the rules, procedures, legal burdens of
    proof, and remedies set forth in section 40(b) of the Consumer Product
    Safety Act (15 U.S.C. 2087(b)).
        (c) Employer Defined.--As used in this section, the term
    ``employer'' means any person (including one or more individuals,
    partnerships, associations, corporations, trusts, professional
    membership organization including a certification, disciplinary, or
    other professional body, unincorporated organizations, nongovernmental
    organizations, or trustees) engaged in profit or nonprofit business or
    industry whose activities are governed by this division, and any agent,
    contractor, subcontractor, grantee, or consultant of such person.
        (d) Rule of Construction.--The rule of construction set forth in
    section 20109(h) of title 49, United States Code, shall also apply to
    this section.

    SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

        Nothing in this subdivision shall be construed to alter of
    supercede any statutory or other obligation to engage in collective
    bargaining over the terms and conditions of employment related to
    health care.

    SEC. 155. SEVERABILITY.

        If any provision of this division, or any application of such
    provision to any person or circumstance, is held to be
    unconstitutional, the remainder of the provisions of this division and
    the application of the provision to any other person or circumstance
    shall not be affected.

                         Subtitle G--Early Investments

    SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

        (a) Group Health Insurance Coverage.--Title XXVII of the Public
    Health Service Act is amended by inserting after section 2713 the
    following new section:

    ``SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

        ``(a) In General.--Each health insurance issuer that offers health
    insurance coverage in the small or large group market shall provide
    that for any plan year in which the coverage has a medical loss ratio
    below a level specified by the Secretary, the issuer shall provide in a
    manner specified by the Secretary for rebates to enrollees of payment
    sufficient to meet such loss ratio. Such methodology shall be set at
    the highest level medical loss ratio possible that is designed to
    ensure adequate participation by issuers, competition in the health
    insurance market, and value for consumers so that their premiums are
    used for services.
        ``(b) Uniform Definitions.--The Secretary shall establish a uniform
    definition of medical loss ratio and methodology for determining how to
    calculate the medical loss ratio. Such methodology shall be designed to
    take into account the special circumstances of smaller plans, different
    types of plans, and newer plans.''.
        (b) Individual Health Insurance Coverage.--Such title is further
    amended by inserting after section 2753 the following new section:

    ``SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

        ``The provisions of section 2714 shall apply to health insurance
    coverage offered in the individual market in the same manner as such
    provisions apply to health insurance coverage offered in the small or
    large group market.''.
        (c) Immediate Implementation.--The amendments made by this section
    shall apply in the group and individual market for plan years beginning
    on or after January 1, 2011.

    SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.

        (a) Clarification Regarding Application of Guaranteed Renewability
    of Individual Health Insurance Coverage.--Section 2742 of the Public
    Health Service Act (42 U.S.C. 300gg-42) is amended--
                (1) in its heading, by inserting ``and continuation in
            force, including prohibition of rescission,'' after
            ``guaranteed renewability''; and
                (2) in subsection (a), by inserting ``, including without
            rescission,'' after ``continue in force''.
        (b) Secretarial Guidance Regarding Rescissions.--Section 2742 of
    such Act (42 U.S.C. 300gg-42) is amended by adding at the end the
    following:
        ``(f) Rescission.--A health insurance issuer may rescind health
    insurance coverage only upon clear and convincing evidence of fraud
    described in subsection (b)(2). The Secretary, no later than July 1,
    2010, shall issue guidance implementing this requirement, including
    procedures for independent, external third party review.''.
        (c) Opportunity for Independent, External Third Party Review in
    Certain Cases.--Subpart 1 of part B of title XXVII of such Act (42
    U.S.C. 300gg-41 et seq.) is amended by adding at the end the following:

    ``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW
                  IN CASES OF RESCISSION.

        ``(a) Notice and Review Right.--If a health insurance issuer
    determines to rescind health insurance coverage for an individual in
    the individual market, before such rescission may take effect the
    issuer shall provide the individual with notice of such proposed
    rescission and an opportunity for a review of such determination by an
    independent, external third party under procedures specified by the
    Secretary under section 2742(f).
        ``(b) Independent Determination.--If the individual requests such
    review by an independent, external third party of a rescission of
    health insurance coverage, the coverage shall remain in effect until
    such third party determines that the coverage may be rescinded under
    the guidance issued by the Secretary under section 2742(f).''.
        (d) Effective Date.--The amendments made by this section shall
    apply on and after October 1, 2010, with respect to health insurance
    coverage issued before, on, or after such date.

    SEC. 163. ADMINISTRATIVE SIMPLIFICATION.

        (a) Standardizing Electronic Administrative Transactions.--
                (1) In general.--Part C of title XI of the Social Security
            Act (42 U.S.C. 1320d et seq.) is amended by inserting after
            section 1173 the following new section:

    ``SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

        ``(a) Standards for Financial and Administrative Transactions.--
                ``(1) In general.--The Secretary shall adopt and regularly
            update standards consistent with the goals described in
            paragraph (2).
                ``(2) Goals for financial and administrative
            transactions.--The goals for standards under paragraph (1) are
            that such standards shall--
                        ``(A) be unique with no conflicting or redundant
                    standards;
                        ``(B) be authoritative, permitting no additions or
                    constraints for electronic transactions, including
                    companion guides;
                        ``(C) be comprehensive, efficient and robust,
                    requiring minimal augmentation by paper transactions or
                    clarification by further communications;
                        ``(D) enable the real-time (or near real-time)
                    determination of an individual's financial
                    responsibility at the point of service and, to the
                    extent possible, prior to service, including whether
                    the individual is eligible for a specific service with
                    a specific physician at a specific facility, which may
                    include utilization of a machine-readable health plan
                    beneficiary identification card;
                        ``(E) enable, where feasible, near real-time
                    adjudication of claims;
                        ``(F) provide for timely acknowledgment, response,
                    and status reporting applicable to any electronic
                    transaction deemed appropriate by the Secretary;
                        ``(G) describe all data elements (such as reason
                    and remark codes) in unambiguous terms, not permit
                    optional fields, require that data elements be either
                    required or conditioned upon set values in other
                    fields, and prohibit additional conditions; and
                        ``(H) harmonize all common data elements across
                    administrative and clinical transaction standards.
                ``(3) Time for adoption.--Not later than 2 years after the
            date of implementation of the X12 Version 5010 transaction
            standards implemented under this part, the Secretary shall
            adopt standards under this section.
                ``(4) Requirements for specific standards.--The standards
            under this section shall be developed, adopted, and enforced so
            as to--
                        ``(A) clarify, refine, complete, and expand, as
                    needed, the standards required under section 1173;
                        ``(B) require paper versions of standardized
                    transactions to comply with the same standards as to
                    data content such that a fully compliant, equivalent
                    electronic transaction can be populated from the data
                    from a paper version;
                        ``(C) enable electronic funds transfers, in order
                    to allow automated reconciliation with the related
                    health care payment and remittance advice;
                        ``(D) require timely and transparent claim and
                    denial management processes, including tracking,
                    adjudication, and appeal processing ;
                        ``(E) require the use of a standard electronic
                    transaction with which health care providers may
                    quickly and efficiently enroll with a health plan to
                    conduct the other electronic transactions provided for
                    in this part; and
                        ``(F) provide for other requirements relating to
                    administrative simplification as identified by the
                    Secretary, in consultation with stakeholders.
                ``(5) Building on existing standards.--In developing the
            standards under this section, the Secretary shall build upon
            existing and planned standards.
                ``(6) Implementation and enforcement.--Not later than 6
            months after the date of the enactment of this section, the
            Secretary shall submit to the appropriate committees of
            Congress a plan for the implementation and enforcement, by not
            later than 5 years after such date of enactment, of the
            standards under this section. Such plan shall include--
                        ``(A) a process and timeframe with milestones for
                    developing the complete set of standards;
                        ``(B) an expedited upgrade program for continually
                    developing and approving additions and modifications to
                    the standards as often as annually to improve their
                    quality and extend their functionality to meet evolving
                    requirements in health care;
                        ``(C) programs to provide incentives for, and ease
                    the burden of, implementation for certain health care
                    providers, with special consideration given to such
                    providers serving rural or underserved areas and ensure
                    coordination with standards, implementation
                    specifications, and certification criteria being
                    adopted under the HITECH Act;
                        ``(D) programs to provide incentives for, and ease
                    the burden of, health care providers who volunteer to
                    participate in the process of setting standards for
                    electronic transactions;
                        ``(E) an estimate of total funds needed to ensure
                    timely completion of the implementation plan; and
                        ``(F) an enforcement process that includes timely
                    investigation of complaints, random audits to ensure
                    compliance, civil monetary and programmatic penalties
                    for non-compliance consistent with existing laws and
                    regulations, and a fair and reasonable appeals process
                    building off of enforcement provisions under this part.
        ``(b) Limitations on Use of Data.--Nothing in this section shall be
    construed to permit the use of information collected under this section
    in a manner that would adversely affect any individual.
        ``(c) Protection of Data.--The Secretary shall ensure (through the
    promulgation of regulations or otherwise) that all data collected
    pursuant to subsection (a) are--
                ``(1) used and disclosed in a manner that meets the HIPAA
            privacy and security law (as defined in section 3009(a)(2) of
            the Public Health Service Act), including any privacy or
            security standard adopted under section 3004 of such Act; and
                ``(2) protected from all inappropriate internal use by any
            entity that collects, stores, or receives the data, including
            use of such data in determinations of eligibility (or continued
            eligibility) in health plans, and from other inappropriate
            uses, as defined by the Secretary.''.
                (2) Definitions.--Section 1171 of such Act (42 U.S.C.
            1320d) is amended--
                        (A) in paragraph (7), by striking ``with reference
                    to'' and all that follows and inserting ``with
                    reference to a transaction or data element of health
                    information in section 1173 means implementation
                    specifications, certification criteria, operating
                    rules, messaging formats, codes, and code sets adopted
                    or established by the Secretary for the electronic
                    exchange and use of information''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(9) Operating rules.--The term `operating rules' means
            business rules for using and processing transactions. Operating
            rules should address the following:
                        ``(A) Requirements for data content using available
                    and established national standards.
                        ``(B) Infrastructure requirements that establish
                    best practices for streamlining data flow to yield
                    timely execution of transactions.
                        ``(C) Policies defining the transaction related
                    rights and responsibilities for entities that are
                    transmitting or receiving data.''.
                (3) Conforming amendment.--Section 1179(a) of such Act (42
            U.S.C. 1320d-8(a)) is amended, in the matter before paragraph
            (1)--
                        (A) by inserting ``on behalf of an individual''
                    after ``1978)''; and
                        (B) by inserting ``on behalf of an individual''
                    after ``for a financial institution'' and
        (b) Standards for Claims Attachments and Coordination of Benefits
    .--
                (1) Standard for health claims attachments.--Not later than
            1 year after the date of the enactment of this Act, the
            Secretary of Health and Human Services shall promulgate a final
            rule to establish a standard for health claims attachment
            transaction described in section 1173(a)(2)(B) of the Social
            Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of
            benefits.
                (2) Revision in processing payment transactions by
            financial institutions.--
                        (A) In general.--Section 1179 of the Social
                    Security Act (42 U.S.C. 1320d-8) is amended, in the
                    matter before paragraph (1)--
                                (i) by striking ``or is engaged'' and
                            inserting ``and is engaged''; and
                                (ii) by inserting ``(other than as a
                            business associate for a covered entity)''
                            after ``for a financial institution''.
                        (B) Effective date.--The amendments made by
                    paragraph (1) shall apply to transactions occurring on
                    or after such date (not later than 6 months after the
                    date of the enactment of this Act) as the Secretary of
                    Health and Human Services shall specify.

    SEC. 164. REINSURANCE PROGRAM FOR RETIREES.

        (a) Establishment.--
                (1) In general.--Not later than 90 days after the date of
            the enactment of this Act, the Secretary of Health and Human
            Services shall establish a temporary reinsurance program (in
            this section referred to as the ``reinsurance program'') to
            provide reimbursement to assist participating employment-based
            plans with the cost of providing health benefits to retirees
            and to eligible spouses, surviving spouses and dependents of
            such retirees.
                (2) Definitions.--For purposes of this section:
                        (A) The term ``eligible employment-based plan''
                    means a group health benefits plan that--
                                (i) is maintained by one or more employers,
                            former employers or employee associations, or a
                            voluntary employees' beneficiary association,
                            or a committee or board of individuals
                            appointed to administer such plan, and
                                (ii) provides health benefits to retirees.
                        (B) The term ``health benefits'' means medical,
                    surgical, hospital, prescription drug, and such other
                    benefits as shall be determined by the Secretary,
                    whether self-funded or delivered through the purchase
                    of insurance or otherwise.
                        (C) The term ``participating employment-based
                    plan'' means an eligible employment-based plan that is
                    participating in the reinsurance program.
                        (D) The term ``retiree'' means, with respect to a
                    participating employment-benefit plan, an individual
                    who--
                                (i) is 55 years of age or older;
                                (ii) is not eligible for coverage under
                            title XVIII of the Social Security Act; and
                                (iii) is not an active employee of an
                            employer maintaining the plan or of any
                            employer that makes or has made substantial
                            contributions to fund such plan.
                        (E) The term ``Secretary'' means Secretary of
                    Health and Human Services.
        (b) Participation.--To be eligible to participate in the
    reinsurance program, an eligible employment-based plan shall submit to
    the Secretary an application for participation in the program, at such
    time, in such manner, and containing such information as the Secretary
    shall require.
        (c) Payment.--
                (1) Submission of claims.--
                        (A) In general.--Under the reinsurance program, a
                    participating employment-based plan shall submit claims
                    for reimbursement to the Secretary which shall contain
                    documentation of the actual costs of the items and
                    services for which each claim is being submitted.
                        (B) Basis for claims.--Each claim submitted under
                    subparagraph (A) shall be based on the actual amount
                    expended by the participating employment-based plan
                    involved within the plan year for the appropriate
                    employment based health benefits provided to a retiree
                    or to the spouse, surviving spouse, or dependent of a
                    retiree. In determining the amount of any claim for
                    purposes of this subsection, the participating
                    employment-based plan shall take into account any
                    negotiated price concessions (such as discounts, direct
                    or indirect subsidies, rebates, and direct or indirect
                    remunerations) obtained by such plan with respect to
                    such health benefits. For purposes of calculating the
                    amount of any claim, the costs paid by the retiree or
                    by the spouse, surviving spouse, or dependent of the
                    retiree in the form of deductibles, co-payments, and
                    co-insurance shall be included along with the amounts
                    paid by the participating employment-based plan.
                (2) Program payments and limit.--If the Secretary
            determines that a participating employment-based plan has
            submitted a valid claim under paragraph (1), the Secretary
            shall reimburse such plan for 80 percent of that portion of the
            costs attributable to such claim that exceeds $15,000, but is
            less than $90,000. Such amounts shall be adjusted each year
            based on the percentage increase in the medical care component
            of the Consumer Price Index (rounded to the nearest multiple of
            $1,000) for the year involved.
                (3) Use of payments.--Amounts paid to a participating
            employment-based plan under this subsection shall be used to
            lower the costs borne directly by the participants and
            beneficiaries for health benefits provided under such plan in
            the form of premiums, co-payments, deductibles, co-insurance,
            or other out-of-pocket costs. Such payments shall not be used
            to reduce the costs of an employer maintaining the
            participating employment-based plan. The Secretary shall
            develop a mechanism to monitor the appropriate use of such
            payments by such plans.
                (4) Appeals and program protections.--The Secretary shall
            establish--
                        (A) an appeals process to permit participating
                    employment-based plans to appeal a determination of the
                    Secretary with respect to claims submitted under this
                    section; and
                        (B) procedures to protect against fraud, waste, and
                    abuse under the program.
                (5) Audits.--The Secretary shall conduct annual audits of
            claims data submitted by participating employment-based plans
            under this section to ensure that they are in compliance with
            the requirements of this section.
        (d) Retiree Reserve Trust Fund.--
                (1) Establishment.--
                        (A) In general.--There is established in the
                    Treasury of the United States a trust fund to be known
                    as the ``Retiree Reserve Trust Fund'' (referred to in
                    this section as the ``Trust Fund''), that shall consist
                    of such amounts as may be appropriated or credited to
                    the Trust Fund as provided for in this subsection to
                    enable the Secretary to carry out the reinsurance
                    program. Such amounts shall remain available until
                    expended.
                        (B) Funding.--There are hereby appropriated to the
                    Trust Fund, out of any moneys in the Treasury not
                    otherwise appropriated, an amount requested by the
                    Secretary as necessary to carry out this section,
                    except that the total of all such amounts requested
                    shall not exceed $10,000,000,000.
                        (C) Appropriations from the trust fund.--
                                (i) In general.--Amounts in the Trust Fund
                            are appropriated to provide funding to carry
                            out the reinsurance program and shall be used
                            to carry out such program.
                                (ii) Budgetary implications.--Amounts
                            appropriated under clause (i), and outlays
                            flowing from such appropriations, shall not be
                            taken into account for purposes of any budget
                            enforcement procedures including allocations
                            under section 302(a) and (b) of the Balanced
                            Budget and Emergency Deficit Control Act and
                            budget resolutions for fiscal years during
                            which appropriations are made from the Trust
                            Fund.
                                (iii) Limitation to available funds.--The
                            Secretary has the authority to stop taking
                            applications for participation in the program
                            or take such other steps in reducing
                            expenditures under the reinsurance program in
                            order to ensure that expenditures under the
                            reinsurance program do not exceed the funds
                            available under this subsection.

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

    SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF
                  DUTIES; DEFINITIONS.

        (a) Establishment.--There is established within the Health Choices
    Administration and under the direction of the Commissioner a Health
    Insurance Exchange in order to facilitate access of individuals and
    employers, through a transparent process, to a variety of choices of
    affordable, quality health insurance coverage, including a public
    health insurance option.
        (b) Outline of Duties of Commissioner.--In accordance with this
    subtitle and in coordination with appropriate Federal and State
    officials as provided under section 143(b), the Commissioner shall--
                (1) under section 204 establish standards for, accept bids
            from, and negotiate and enter into contracts with, QHBP
            offering entities for the offering of health benefits plans
            through the Health Insurance Exchange, with different levels of
            benefits required under section 203, and including with respect
            to oversight and enforcement;
                (2) under section 205 facilitate outreach and enrollment in
            such plans of Exchange-eligible individuals and employers
            described in section 202; and
                (3) conduct such activities related to the Health Insurance
            Exchange as required, including establishment of a risk pooling
            mechanism under section 206 and consumer protections under
            subtitle D of title I.
        (c) Exchange-participating Health Benefits Plan Defined.--In this
    subdivision, the term ``Exchange-participating health benefits plan''
    means a qualified health benefits plan that is offered through the
    Health Insurance Exchange.

    SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

        (a) Access to Coverage.--In accordance with this section, all
    individuals are eligible to obtain coverage through enrollment in an
    Exchange-participating health benefits plan offered through the Health
    Insurance Exchange unless such individuals are enrolled in another
    qualified health benefits plan or other acceptable coverage.
        (b) Definitions.--In this subdivision:
                (1) Exchange-eligible individual.--The term ``Exchange-
            eligible individual'' means an individual who is eligible under
            this section to be enrolled through the Health Insurance
            Exchange in an Exchange-participating health benefits plan and,
            with respect to family coverage, includes dependents of such
            individual.
                (2) Exchange-eligible employer.--The term ``Exchange-
            eligible employer'' means an employer that is eligible under
            this section to enroll through the Health Insurance Exchange
            employees of the employer (and their dependents) in Exchange-
            eligible health benefits plans.
                (3) Employment-related definitions.--The terms
            ``employer'', ``employee'', ``full-time employee'', and ``part-
            time employee'' have the meanings given such terms by the
            Commissioner for purposes of this subdivision.
        (c) Transition.--Individuals and employers shall only be eligible
    to enroll or participate in the Health Insurance Exchange in accordance
    with the following transition schedule:
                (1) First year.--In Y1 (as defined in section 100(c))--
                        (A) individuals described in subsection (d)(1),
                    including individuals described in paragraphs (3) and
                    (4) of subsection (d); and
                        (B) smallest employers described in subsection
                    (e)(1).
                (2) Second year.--In Y2--
                        (A) individuals and employers described in
                    paragraph (1); and
                        (B) smaller employers described in subsection
                    (e)(2).
                (3) Third and subsequent years.--In Y3 and subsequent
            years--
                        (A) individuals and employers described in
                    paragraph (2); and
                        (B) larger employers as permitted by the
                    Commissioner under subsection (e)(3).
        (d) Individuals.--
                (1) Individual described.--Subject to the succeeding
            provisions of this subsection, an individual described in this
            paragraph is an individual who--
                        (A) is not enrolled in coverage described in
                    subparagraphs (C) through (F) of paragraph (2); and
                        (B) is not enrolled in coverage as a full-time
                    employee (or as a dependent of such an employee) under
                    a group health plan if the coverage and an employer
                    contribution under the plan meet the requirements of
                    section 312.
            For purposes of subparagraph (B), in the case of an individual
            who is self-employed, who has at least 1 employee, and who
            meets the requirements of section 312, such individual shall be
            deemed a full-time employee described in such subparagraph.
                (2) Acceptable coverage.--For purposes of this subdivision,
            the term ``acceptable coverage'' means any of the following:
                        (A) Qualified health benefits plan coverage.--
                    Coverage under a qualified health benefits plan.
                        (B) Grandfathered health insurance coverage;
                    coverage under current group health plan.--Coverage
                    under a grandfathered health insurance coverage (as
                    defined in subsection (a) of section 102) or under a
                    current group health plan (described in subsection (b)
                    of such section).
                        (C) Medicare.--Coverage under part A of title XVIII
                    of the Social Security Act.
                        (D) Medicaid.--Coverage for medical assistance
                    under title XIX of the Social Security Act, excluding
                    such coverage that is only available because of the
                    application of subsection (u), (z), or (aa) of section
                    1902 of such Act
                        (E) Members of the armed forces and dependents
                    (including tricare).--Coverage under chapter 55 of
                    title 10, United States Code, including similar
                    coverage furnished under section 1781 of title 38 of
                    such Code.
                        (F) VA.--Coverage under the veteran's health care
                    program under chapter 17 of title 38, United States
                    Code, but only if the coverage for the individual
                    involved is determined by the Commissioner in
                    coordination with the Secretary of Treasury to be not
                    less than a level specified by the Commissioner and
                    Secretary of Veteran's Affairs, in coordination with
                    the Secretary of Treasury, based on the individual's
                    priority for services as provided under section 1705(a)
                    of such title.
                        (G) Other coverage.--Such other health benefits
                    coverage, such as a State health benefits risk pool, as
                    the Commissioner, in coordination with the Secretary of
                    the Treasury, recognizes for purposes of this
                    paragraph.
            The Commissioner shall make determinations under this paragraph
            in coordination with the Secretary of the Treasury.
                (3) Treatment of certain non-traditional medicaid eligible
            individuals.--An individual who is a non-traditional Medicaid
            eligible individual (as defined in section 205(e)(4)(C)) in a
            State may be an Exchange-eligible individual if the individual
            was enrolled in a qualified health benefits plan, grandfathered
            health insurance coverage, or current group health plan during
            the 6 months before the individual became a non-traditional
            Medicaid eligible individual. During the period in which such
            an individual has chosen to enroll in an Exchange-participating
            health benefits plan, the individual is not also eligible for
            medical assistance under Medicaid.
                (4) Continuing eligibility permitted.--
                        (A) In general.--Except as provided in subparagraph
                    (B), once an individual qualifies as an Exchange-
                    eligible individual under this subsection (including as
                    an employee or dependent of an employee of an Exchange-
                    eligible employer) and enrolls under an Exchange-
                    participating health benefits plan through the Health
                    Insurance Exchange, the individual shall continue to be
                    treated as an Exchange-eligible individual until the
                    individual is no longer enrolled with an Exchange-
                    participating health benefits plan.
                        (B) Exceptions.--
                                (i) In general.--Subparagraph (A) shall not
                            apply to an individual once the individual
                            becomes eligible for coverage--
                                        (I) under part A of the Medicare
                                    program;
                                        (II) under the Medicaid program as
                                    a Medicaid eligible individual, except
                                    as permitted under paragraph (3) or
                                    clause (ii); or
                                        (III) in such other circumstances
                                    as the Commissioner may provide.
                                (ii) Transition period.--In the case
                            described in clause (i)(II), the Commissioner
                            shall permit the individual to continue
                            treatment under subparagraph (A) until such
                            limited time as the Commissioner determines it
                            is administratively feasible, consistent with
                            minimizing disruption in the individual's
                            access to health care.
        (e) Employers.--
                (1) Smallest employer.--Subject to paragraph (4), smallest
            employers described in this paragraph are employers with 10 or
            fewer employees.
                (2) Smaller employers.--Subject to paragraph (4), smaller
            employers described in this paragraph are employers that are
            not smallest employers described in paragraph (1) and have 20
            or fewer employees.
                (3) Larger employers.--
                        (A) In general.--Beginning with Y3, the
                    Commissioner may permit employers not described in
                    paragraph (1) or (2) to be Exchange-eligible employers.
                        (B) Phase-in.--In applying subparagraph (A), the
                    Commissioner may phase-in the application of such
                    subparagraph based on the number of full-time employees
                    of an employer and such other considerations as the
                    Commissioner deems appropriate.
                (4) Continuing eligibility.--Once an employer is permitted
            to be an Exchange-eligible employer under this subsection and
            enrolls employees through the Health Insurance Exchange, the
            employer shall continue to be treated as an Exchange-eligible
            employer for each subsequent plan year regardless of the number
            of employees involved unless and until the employer meets the
            requirement of section 311(a) through paragraph (1) of such
            section by offering a group health plan and not through
            offering an Exchange-participating health benefits plan.
                (5) Employer participation and contributions.--
                        (A) Satisfaction of employer responsibility.--For
                    any year in which an employer is an Exchange-eligible
                    employer, such employer may meet the requirements of
                    section 312 with respect to employees of such employer
                    by offering such employees the option of enrolling with
                    Exchange-participating health benefits plans through
                    the Health Insurance Exchange consistent with the
                    provisions of subtitle B of title III.
                        (B) Employee choice.--Any employee offered
                    Exchange-participating health benefits plans by the
                    employer of such employee under subparagraph (A) may
                    choose coverage under any such plan. That choice
                    includes, with respect to family coverage, coverage of
                    the dependents of such employee.
                (6) Affiliated groups.--Any employer which is part of a
            group of employers who are treated as a single employer under
            subsection (b), (c), (m), or (o) of section 414 of the Internal
            Revenue Code of 1986 shall be treated, for purposes of this
            subtitle, as a single employer.
                (7) Other counting rules.--The Commissioner shall establish
            rules relating to how employees are counted for purposes of
            carrying out this subsection.
        (f) Special Situation Authority.--The Commissioner shall have the
    authority to establish such rules as may be necessary to deal with
    special situations with regard to uninsured individuals and employers
    participating as Exchange-eligible individuals and employers, such as
    transition periods for individuals and employers who gain, or lose,
    Exchange-eligible participation status, and to establish grace periods
    for premium payment.
        (g) Surveys of Individuals and Employers.--The Commissioner shall
    provide for periodic surveys of Exchange-eligible individuals and
    employers concerning satisfaction of such individuals and employers
    with the Health Insurance Exchange and Exchange-participating health
    benefits plans.
        (h) Exchange Access Study.--
                (1) In general.--The Commissioner shall conduct a study of
            access to the Health Insurance Exchange for individuals and for
            employers, including individuals and employers who are not
            eligible and enrolled in Exchange-participating health benefits
            plans. The goal of the study is to determine if there are
            significant groups and types of individuals and employers who
            are not Exchange eligible individuals or employers, but who
            would have improved benefits and affordability if made eligible
            for coverage in the Exchange.
                (2) Items included in study.--Such study also shall
            examine--
                        (A) the terms, conditions, and affordability of
                    group health coverage offered by employers and QHBP
                    offering entities outside of the Exchange compared to
                    Exchange-participating health benefits plans; and
                        (B) the affordability-test standard for access of
                    certain employed individuals to coverage in the Health
                    Insurance Exchange.
                (3) Report.--Not later than January 1 of Y3, in Y6, and
            thereafter, the Commissioner shall submit to Congress on the
            study conducted under this subsection and shall include in such
            report recommendations regarding changes in standards for
            Exchange eligibility for individuals and employers.

    SEC. 203. BENEFITS PACKAGE LEVELS.

        (a) In General.--The Commissioner shall specify the benefits to be
    made available under Exchange-participating health benefits plans
    during each plan year, consistent with subtitle C of title I and this
    section.
        (b) Limitation on Health Benefits Plans Offered by Offering
    Entities.--The Commissioner may not enter into a contract with a QHBP
    offering entity under section 204(c) for the offering of an Exchange-
    participating health benefits plan in a service area unless the
    following requirements are met:
                (1) Required offering of basic plan.--The entity offers
            only one basic plan for such service area.
                (2) Optional offering of enhanced plan.--If and only if the
            entity offers a basic plan for such service area, the entity
            may offer one enhanced plan for such area.
                (3) Optional offering of premium plan.--If and only if the
            entity offers an enhanced plan for such service area, the
            entity may offer one premium plan for such area.
                (4) Optional offering of premium-plus plans.--If and only
            if the entity offers a premium plan for such service area, the
            entity may offer one or more premium-plus plans for such area.
    All such plans may be offered under a single contract with the
    Commissioner.
        (c) Specification of Benefit Levels for Plans.--
                (1) In general.--The Commissioner shall establish the
            following standards consistent with this subsection and title
            I:
                        (A) Basic, enhanced, and premium plans.--Standards
                    for 3 levels of Exchange-participating health benefits
                    plans: basic, enhanced, and premium (in this
                    subdivision referred to as a ``basic plan'', ``enhanced
                    plan'', and ``premium plan'', respectively).
                        (B) Premium-plus plan benefits.--Standards for
                    additional benefits that may be offered, consistent
                    with this subsection and subtitle C of title I, under a
                    premium plan (such a plan with additional benefits
                    referred to in this subdivision as a ``premium-plus
                    plan'') .
                (2) Basic plan.--
                        (A) In general.--A basic plan shall offer the
                    essential benefits package required under title I for a
                    qualified health benefits plan.
                        (B) Tiered cost-sharing for affordable credit
                    eligible individuals.--In the case of an affordable
                    credit eligible individual (as defined in section
                    242(a)(1)) enrolled in an Exchange-participating health
                    benefits plan, the benefits under a basic plan are
                    modified to provide for the reduced cost-sharing for
                    the income tier applicable to the individual under
                    section 244(c).
                (3) Enhanced plan.--An enhanced plan shall offer, in
            addition to the level of benefits under the basic plan, a lower
            level of cost-sharing as provided under title I consistent with
            section 123(b)(5)(A).
                (4) Premium plan.--A premium plan shall offer, in addition
            to the level of benefits under the basic plan, a lower level of
            cost-sharing as provided under title I consistent with section
            123(b)(5)(B).
                (5) Premium-plus plan.--A premium-plus plan is a premium
            plan that also provides additional benefits, such as adult oral
            health and vision care, approved by the Commissioner. The
            portion of the premium that is attributable to such additional
            benefits shall be separately specified.
                (6) Range of permissible variation in cost-sharing.--The
            Commissioner shall establish a permissible range of variation
            of cost-sharing for each basic, enhanced, and premium plan,
            except with respect to any benefit for which there is no cost-
            sharing permitted under the essential benefits package. Such
            variation shall permit a variation of not more than plus (or
            minus) 10 percent in cost-sharing with respect to each benefit
            category specified under section 122.
        (d) Treatment of State Benefit Mandates.--Insofar as a State
    requires a health insurance issuer offering health insurance coverage
    to include benefits beyond the essential benefits package, such
    requirement shall continue to apply to an Exchange-participating health
    benefits plan, if the State has entered into an arrangement
    satisfactory to the Commissioner to reimburse the Commissioner for the
    amount of any net increase in affordability premium credits under
    subtitle C as a result of an increase in premium in basic plans as a
    result of application of such requirement.

    SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH
                  BENEFITS PLANS.

        (a) Contracting Duties.--In carrying out section 201(b)(1) and
    consistent with this subtitle:
                (1) Offering entity and plan standards.--The Commissioner
            shall--
                        (A) establish standards necessary to implement the
                    requirements of this title and title I for--
                                (i) QHBP offering entities for the offering
                            of an Exchange-participating health benefits
                            plan; and
                                (ii) for Exchange-participating health
                            benefits plans; and
                        (B) certify QHBP offering entities and qualified
                    health benefits plans as meeting such standards and
                    requirements of this title and title I for purposes of
                    this subtitle.
                (2) Soliciting and negotiating bids; contracts.--The
            Commissioner shall--
                        (A) solicit bids from QHBP offering entities for
                    the offering of Exchange-participating health benefits
                    plans;
                        (B) based upon a review of such bids, negotiate
                    with such entities for the offering of such plans; and
                        (C) enter into contracts with such entities for the
                    offering of such plans through the Health Insurance
                    Exchange under terms (consistent with this title)
                    negotiated between the Commissioner and such entities.
                (3) FAR not applicable.--The provisions of the Federal
            Acquisition Regulation shall not apply to contracts between the
            Commissioner and QHBP offering entities for the offering of
            Exchange-participating health benefits plans under this title.
        (b) Standards for QHBP Offering Entities to Offer Exchange-
    participating Health Benefits Plans.--The standards established under
    subsection (a)(1)(A) shall require that, in order for a QHBP offering
    entity to offer an Exchange-participating health benefits plan, the
    entity must meet the following requirements:
                (1) Licensed.--The entity shall be licensed to offer health
            insurance coverage under State law for each State in which it
            is offering such coverage.
                (2) Data reporting.--The entity shall provide for the
            reporting of such information as the Commissioner may specify,
            including information necessary to administer the risk pooling
            mechanism described in section 206(b) and information to
            address disparities in health and health care.
                (3) Implementing affordability credits.--The entity shall
            provide for implementation of the affordability credits
            provided for enrollees under subtitle C, including the
            reduction in cost-sharing under section 244(c).
                (4) Enrollment.--The entity shall accept all enrollments
            under this subtitle, subject to such exceptions (such as
            capacity limitations) in accordance with the requirements under
            title I for a qualified health benefits plan. The entity shall
            notify the Commissioner if the entity projects or anticipates
            reaching such a capacity limitation that would result in a
            limitation in enrollment.
                (5) Risk pooling participation.--The entity shall
            participate in such risk pooling mechanism as the Commissioner
            establishes under section 206(b).
                (6) Essential community providers.--With respect to the
            basic plan offered by the entity, the entity shall contract for
            outpatient services with covered entities (as defined in
            section 340B(a)(4) of the Public Health Service Act, as in
            effect as of July 1, 2009). The Commissioner shall specify the
            extent to which and manner in which the previous sentence shall
            apply in the case of a basic plan with respect to which the
            Commissioner determines provides substantially all benefits
            through a health maintenance organization, as defined in
            section 2791(b)(3) of the Public Health Service Act.
                (7) Culturally and linguistically appropriate services and
            communications.--The entity shall provide for culturally and
            linguistically appropriate communication and health services.
                (8) Additional requirements.--The entity shall comply with
            other applicable requirements of this title, as specified by
            the Commissioner, which shall include standards regarding
            billing and collection practices for premiums and related grace
            periods and which may include standards to ensure that the
            entity does not use coercive practices to force providers not
            to contract with other entities offering coverage through the
            Health Insurance Exchange.
        (c) Contracts.--
                (1) Bid application.--To be eligible to enter into a
            contract under this section, a QHBP offering entity shall
            submit to the Commissioner a bid at such time, in such manner,
            and containing such information as the Commissioner may
            require.
                (2) Term.--Each contract with a QHBP offering entity under
            this section shall be for a term of not less than one year, but
            may be made automatically renewable from term to term in the
            absence of notice of termination by either party.
                (3) Enforcement of network adequacy.--In the case of a
            health benefits plan of a QHBP offering entity that uses a
            provider network, the contract under this section with the
            entity shall provide that if--
                        (A) the Commissioner determines that such provider
                    network does not meet such standards as the
                    Commissioner shall establish under section 115; and
                        (B) an individual enrolled in such plan receives an
                    item or service from a provider that is not within such
                    network;
            then any cost-sharing for such item or service shall be equal
            to the amount of such cost-sharing that would be imposed if
            such item or service was furnished by a provider within such
            network.
                (4) Oversight and enforcement responsibilities.--The
            Commissioner shall establish processes, in coordination with
            State insurance regulators, to oversee, monitor, and enforce
            applicable requirements of this title with respect to QHBP
            offering entities offering Exchange-participating health
            benefits plans and such plans, including the marketing of such
            plans. Such processes shall include the following:
                        (A) Grievance and complaint mechanisms.--The
                    Commissioner shall establish, in coordination with
                    State insurance regulators, a process under which
                    Exchange-eligible individuals and employers may file
                    complaints concerning violations of such standards.
                        (B) Enforcement.--In carrying out authorities under
                    this subdivision relating to the Health Insurance
                    Exchange, the Commissioner may impose one or more of
                    the intermediate sanctions described in section 142(c).
                        (C) Termination.--
                                (i) In general.--The Commissioner may
                            terminate a contract with a QHBP offering
                            entity under this section for the offering of
                            an Exchange-participating health benefits plan
                            if such entity fails to comply with the
                            applicable requirements of this title. Any
                            determination by the Commissioner to terminate
                            a contract shall be made in accordance with
                            formal investigation and compliance procedures
                            established by the Commissioner under which--
                                        (I) the Commissioner provides the
                                    entity with the reasonable opportunity
                                    to develop and implement a corrective
                                    action plan to correct the deficiencies
                                    that were the basis of the
                                    Commissioner's determination; and
                                        (II) the Commissioner provides the
                                    entity with reasonable notice and
                                    opportunity for hearing (including the
                                    right to appeal an initial decision)
                                    before terminating the contract.
                                (ii) Exception for imminent and serious
                            risk to health.--Clause (i) shall not apply if
                            the Commissioner determines that a delay in
                            termination, resulting from compliance with the
                            procedures specified in such clause prior to
                            termination, would pose an imminent and serious
                            risk to the health of individuals enrolled
                            under the qualified health benefits plan of the
                            QHBP offering entity.
                        (D) Construction.--Nothing in this subsection shall
                    be construed as preventing the application of other
                    sanctions under subtitle E of title I with respect to
                    an entity for a violation of such a requirement.

    SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND
                  EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.

        (a) In General.--
                (1) Outreach.--The Commissioner shall conduct outreach
            activities consistent with subsection (c), including through
            use of appropriate entities as described in paragraph (4) of
            such subsection, to inform and educate individuals and
            employers about the Health Insurance Exchange and Exchange-
            participating health benefits plan options. Such outreach shall
            include outreach specific to vulnerable populations, such as
            children, individuals with disabilities, individuals with
            mental illness, and individuals with other cognitive
            impairments.
                (2) Eligibility.--The Commissioner shall make timely
            determinations of whether individuals and employers are
            Exchange-eligible individuals and employers (as defined in
            section 202).
                (3) Enrollment.--The Commissioner shall establish and carry
            out an enrollment process for Exchange-eligible individuals and
            employers, including at community locations, in accordance with
            subsection (b).
        (b) Enrollment Process.--
                (1) In general.--The Commissioner shall establish a process
            consistent with this title for enrollments in Exchange-
            participating health benefits plans. Such process shall provide
            for enrollment through means such as the mail, by telephone,
            electronically, and in person.
                (2) Enrollment periods.--
                        (A) Open enrollment period.--The Commissioner shall
                    establish an annual open enrollment period during which
                    an Exchange-eligible individual or employer may elect
                    to enroll in an Exchange-participating health benefits
                    plan for the following plan year and an enrollment
                    period for affordability credits under subtitle C. Such
                    periods shall be during September through November of
                    each year, or such other time that would maximize
                    timeliness of income verification for purposes of such
                    subtitle. The open enrollment period shall not be less
                    than 30 days.
                        (B) Special enrollment.--The Commissioner shall
                    also provide for special enrollment periods to take
                    into account special circumstances of individuals and
                    employers, such as an individual who--
                                (i) loses acceptable coverage;
                                (ii) experiences a change in marital or
                            other dependent status;
                                (iii) moves outside the service area of the
                            Exchange-participating health benefits plan in
                            which the individual is enrolled; or
                                (iv) experiences a significant change in
                            income.
                        (C) Enrollment information.--The Commissioner shall
                    provide for the broad dissemination of information to
                    prospective enrollees on the enrollment process,
                    including before each open enrollment period. In
                    carrying out the previous sentence, the Commissioner
                    may work with other appropriate entities to facilitate
                    such provision of information.
                (3) Automatic enrollment for non-medicaid eligible
            individuals.--
                        (A) In general.--The Commissioner shall provide for
                    a process under which individuals who are Exchange-
                    eligible individuals described in subparagraph (B) are
                    automatically enrolled under an appropriate Exchange-
                    participating health benefits plan. Such process may
                    involve a random assignment or some other form of
                    assignment that takes into account the health care
                    providers used by the individual involved or such other
                    relevant factors as the Commissioner may specify.
                        (B) Subsidized individuals described.--An
                    individual described in this subparagraph is an
                    Exchange-eligible individual who is either of the
                    following:
                                (i) Affordability credit eligible
                            individuals.--The individual--
                                        (I) has applied for, and been
                                    determined eligible for, affordability
                                    credits under subtitle C;
                                        (II) has not opted out from
                                    receiving such affordability credit;
                                    and
                                        (III) does not otherwise enroll in
                                    another Exchange-participating health
                                    benefits plan.
                                (ii) Individuals enrolled in a terminated
                            plan.--The individual is enrolled in an
                            Exchange-participating health benefits plan
                            that is terminated (during or at the end of a
                            plan year) and who does not otherwise enroll in
                            another Exchange-participating health benefits
                            plan.
                (4) Direct payment of premiums to plans.--Under the
            enrollment process, individuals enrolled in an Exchange-
            participating health benefits plan shall pay such plans
            directly, and not through the Commissioner or the Health
            Insurance Exchange.
        (c) Coverage Information and Assistance.--
                (1) Coverage information.--The Commissioner shall provide
            for the broad dissemination of information on Exchange-
            participating health benefits plans offered under this title.
            Such information shall be provided in a comparative manner, and
            shall include information on benefits, premiums, cost-sharing,
            quality, provider networks, and consumer satisfaction.
                (2) Consumer assistance with choice.--To provide assistance
            to Exchange-eligible individuals and employers, the
            Commissioner shall--
                        (A) provide for the operation of a toll-free
                    telephone hotline to respond to requests for assistance
                    and maintain an Internet website through which
                    individuals may obtain information on coverage under
                    Exchange-participating health benefits plans and file
                    complaints;
                        (B) develop and disseminate information to
                    Exchange-eligible enrollees on their rights and
                    responsibilities;
                        (C) assist Exchange-eligible individuals in
                    selecting Exchange-participating health benefits plans
                    and obtaining benefits through such plans; and
                        (D) ensure that the Internet website described in
                    subparagraph (A) and the information described in
                    subparagraph (B) is developed using plain language (as
                    defined in section 133(a)(2)).
                (3) Use of other entities.--In carrying out this
            subsection, the Commissioner may work with other appropriate
            entities to facilitate the dissemination of information under
            this subsection and to provide assistance as described in
            paragraph (2).
        (d) Special Duties Related to Medicaid and CHIP.--
                (1) Coverage for certain newborns.--
                        (A) In general.--In the case of a child born in the
                    United States who at the time of birth is not otherwise
                    covered under acceptable coverage, for the period of
                    time beginning on the date of birth and ending on the
                    date the child otherwise is covered under acceptable
                    coverage (or, if earlier, the end of the month in which
                    the 60-day period, beginning on the date of birth,
                    ends), the child shall be deemed--
                                (i) to be a non-traditional Medicaid
                            eligible individual (as defined in subsection
                            (e)(5)) for purposes of this subdivision and
                            Medicaid; and
                                (ii) to have elected to enroll in Medicaid
                            through the application of paragraph (3).
                        (B) Extended treatment as traditional medicaid
                    eligible individual.--In the case of a child described
                    in subparagraph (A) who at the end of the period
                    referred to in such subparagraph is not otherwise
                    covered under acceptable coverage, the child shall be
                    deemed (until such time as the child obtains such
                    coverage or the State otherwise makes a determination
                    of the child's eligibility for medical assistance under
                    its Medicaid plan pursuant to section 1943(c)(1) of the
                    Social Security Act) to be a traditional Medicaid
                    eligible individual described in section 1902(l)(1)(B)
                    of such Act.
                (2) CHIP transition.--A child who, as of the day before the
            first day of Y1, is eligible for child health assistance under
            title XXI of the Social Security Act (including a child
            receiving coverage under an arrangement described in section
            2101(a)(2) of such Act) is deemed as of such first day to be an
            Exchange-eligible individual unless the individual is a
            traditional Medicaid eligible individual as of such day.
                (3) Automatic enrollment of medicaid eligible individuals
            into medicaid.--The Commissioner shall provide for a process
            under which an individual who is described in section 202(d)(3)
            and has not elected to enroll in an Exchange-participating
            health benefits plan is automatically enrolled under Medicaid.
                (4) Notifications.--The Commissioner shall notify each
            State in Y1 and for purposes of section 1902(gg)(1) of the
            Social Security Act (as added by section 1703(a)) whether the
            Health Insurance Exchange can support enrollment of children
            described in paragraph (2) in such State in such year.
        (e) Medicaid Coverage for Medicaid Eligible Individuals.--
                (1) In general.--
                        (A) Choice for limited exchange-eligible
                    individuals.--As part of the enrollment process under
                    subsection (b), the Commissioner shall provide the
                    option, in the case of an Exchange-eligible individual
                    described in section 202(d)(3), for the individual to
                    elect to enroll under Medicaid instead of under an
                    Exchange-participating health benefits plan. Such an
                    individual may change such election during an
                    enrollment period under subsection (b)(2).
                        (B) Medicaid enrollment obligation.--An Exchange
                    eligible individual may apply, in the manner described
                    in section 241(b)(1), for a determination of whether
                    the individual is a Medicaid-eligible individual. If
                    the individual is determined to be so eligible, the
                    Commissioner, through the Medicaid memorandum of
                    understanding, shall provide for the enrollment of the
                    individual under the State Medicaid plan in accordance
                    with the Medicaid memorandum of understanding under
                    paragraph (4). In the case of such an enrollment, the
                    State shall provide for the same periodic
                    redetermination of eligibility under Medicaid as would
                    otherwise apply if the individual had directly applied
                    for medical assistance to the State Medicaid agency.
                (2) Non-traditional medicaid eligible individuals.--In the
            case of a non-traditional Medicaid eligible individual
            described in section 202(d)(3) who elects to enroll under
            Medicaid under paragraph (1)(A), the Commissioner shall provide
            for the enrollment of the individual under the State Medicaid
            plan in accordance with the Medicaid memorandum of
            understanding under paragraph (4).
                (3) Coordinated enrollment with state through memorandum of
            understanding.--The Commissioner, in consultation with the
            Secretary of Health and Human Services, shall enter into a
            memorandum of understanding with each State (each in this
            subdivision referred to as a ``Medicaid memorandum of
            understanding'') with respect to coordinating enrollment of
            individuals in Exchange-participating health benefits plans and
            under the State's Medicaid program consistent with this section
            and to otherwise coordinate the implementation of the
            provisions of this subdivision with respect to the Medicaid
            program. Such memorandum shall permit the exchange of
            information consistent with the limitations described in
            section 1902(a)(7) of the Social Security Act. Nothing in this
            section shall be construed as permitting such memorandum to
            modify or vitiate any requirement of a State Medicaid plan.
                (4) Medicaid eligible individuals.--For purposes of this
            subdivision:
                        (A) Medicaid eligible individual.--The term
                    ``Medicaid eligible individual'' means an individual
                    who is eligible for medical assistance under Medicaid.
                        (B) Traditional medicaid eligible individual.--The
                    term ``traditional Medicaid eligible individual'' means
                    a Medicaid eligible individual other than an individual
                    who is--
                                (i) a Medicaid eligible individual by
                            reason of the application of subclause (VIII)
                            of section 1902(a)(10)(A)(i) of the Social
                            Security Act; or
                                (ii) a childless adult not described in
                            section 1902(a)(10)(A) or (C) of such Act (as
                            in effect as of the day before the date of the
                            enactment of this Act).
                        (C) Non-traditional medicaid eligible individual.--
                    The term ``non-traditional Medicaid eligible
                    individual'' means a Medicaid eligible individual who
                    is not a traditional Medicaid eligible individual.
        (f) Effective Culturally and Linguistically Appropriate
    Communication.--In carrying out this section, the Commissioner shall
    establish effective methods for communicating in plain language and a
    culturally and linguistically appropriate manner.

    SEC. 206. OTHER FUNCTIONS.

        (a) Coordination of Affordability Credits.--The Commissioner shall
    coordinate the distribution of affordability premium and cost-sharing
    credits under subtitle C to QHBP offering entities offering Exchange-
    participating health benefits plans.
        (b) Coordination of Risk Pooling.--The Commissioner shall establish
    a mechanism whereby there is an adjustment made of the premium amounts
    payable among QHBP offering entities offering Exchange-participating
    health benefits plans of premiums collected for such plans that takes
    into account (in a manner specified by the Commissioner) the
    differences in the risk characteristics of individuals and employers
    enrolled under the different Exchange-participating health benefits
    plans offered by such entities so as to minimize the impact of adverse
    selection of enrollees among the plans offered by such entities.
        (c) Special Inspector General for the Health Insurance Exchange.--
                (1) Establishment; appointment.--There is hereby
            established the Office of the Special Inspector General for the
            Health Insurance Exchange, to be headed by a Special Inspector
            General for the Health Insurance Exchange (in this subsection
            referred to as the ``Special Inspector General'') to be
            appointed by the President, by and with the advice and consent
            of the Senate. The nomination of an individual as Special
            Inspector General shall be made as soon as practicable after
            the establishment of the program under this subtitle.
                (2) Duties.--The Special Inspector General shall--
                        (A) conduct, supervise, and coordinate audits,
                    evaluations and investigations of the Health Insurance
                    Exchange to protect the integrity of the Health
                    Insurance Exchange, as well as the health and welfare
                    of participants in the Exchange;
                        (B) report both to the Commissioner and to the
                    Congress regarding program and management problems and
                    recommendations to correct them;
                        (C) have other duties (described in paragraphs (2)
                    and (3) of section 121 of division A of Public Law 110-
                    343) in relation to the duties described in the
                    previous subparagraphs; and
                        (D) have the authorities provided in section 6 of
                    the Inspector General Act of 1978 in carrying out
                    duties under this paragraph.
                (3) Application of other special inspector general
            provisions.--The provisions of subsections (b) (other than
            paragraphs (1) and (3)), (d) (other than paragraph (1)), and
            (e) of section 121 of division A of the Emergency Economic
            Stabilization Act of 2009 (Public Law 110-343) shall apply to
            the Special Inspector General under this subsection in the same
            manner as such provisions apply to the Special Inspector
            General under such section.
                (4) Reports.--Not later than one year after the
            confirmation of the Special Inspector General, and annually
            thereafter, the Special Inspector General shall submit to the
            appropriate committees of Congress a report summarizing the
            activities of the Special Inspector General during the one year
            period ending on the date such report is submitted.
                (5) Termination.--The Office of the Special Inspector
            General shall terminate five years after the date of the
            enactment of this Act.

    SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.

        (a) Establishment of Health Insurance Exchange Trust Fund.--There
    is created within the Treasury of the United States a trust fund to be
    known as the ``Health Insurance Exchange Trust Fund'' (in this section
    referred to as the ``Trust Fund''), consisting of such amounts as may
    be appropriated or credited to the Trust Fund under this section or any
    other provision of law.
        (b) Payments From Trust Fund.--The Commissioner shall pay from time
    to time from the Trust Fund such amounts as the Commissioner determines
    are necessary to make payments to operate the Health Insurance
    Exchange, including payments under subtitle C (relating to
    affordability credits).
        (c) Transfers to Trust Fund.--
                (1) Dedicated payments.--There is hereby appropriated to
            the Trust Fund amounts equivalent to the following:
                        (A) Taxes on individuals not obtaining acceptable
                    coverage.--The amounts received in the Treasury under
                    section 59B of the Internal Revenue Code of 1986
                    (relating to requirement of health insurance coverage
                    for individuals).
                        (B) Employment taxes on employers not providing
                    acceptable coverage.--The amounts received in the
                    Treasury under section 3111(c) of the Internal Revenue
                    Code of 1986 (relating to employers electing to not
                    provide health benefits).
                        (C) Excise tax on failures to meet certain health
                    coverage requirements.--The amounts received in the
                    Treasury under section 4980H(b) (relating to excise tax
                    with respect to failure to meet health coverage
                    participation requirements).
                (2) Appropriations to cover government contributions.--
            There are hereby appropriated, out of any moneys in the
            Treasury not otherwise appropriated, to the Trust Fund, an
            amount equivalent to the amount of payments made from the Trust
            Fund under subsection (b) plus such amounts as are necessary
            reduced by the amounts deposited under paragraph (1).
        (d) Application of Certain Rules.--Rules similar to the rules of
    subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall
    apply with respect to the Trust Fund.

    SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.

        (a) In General.--If--
                (1) a State (or group of States, subject to the approval of
            the Commissioner) applies to the Commissioner for approval of a
            State-based Health Insurance Exchange to operate in the State
            (or group of States); and
                (2) the Commissioner approves such State-based Health
            Insurance Exchange,
    then, subject to subsections (c) and (d), the State-based Health
    Insurance Exchange shall operate, instead of the Health Insurance
    Exchange, with respect to such State (or group of States). The
    Commissioner shall approve a State-based Health Insurance Exchange if
    it meets the requirements for approval under subsection (b).
        (b) Requirements for Approval.--The Commissioner may not approve a
    State-based Health Insurance Exchange under this section unless the
    following requirements are met:
                (1) The State-based Health Insurance Exchange must
            demonstrate the capacity to and provide assurances satisfactory
            to the Commissioner that the State-based Health Insurance
            Exchange will carry out the functions specified for the Health
            Insurance Exchange in the State (or States) involved,
            including--
                        (A) negotiating and contracting with QHBP offering
                    entities for the offering of Exchange-participating
                    health benefits plan, which satisfy the standards and
                    requirements of this title and title I;
                        (B) enrolling Exchange-eligible individuals and
                    employers in such State in such plans;
                        (C) the establishment of sufficient local offices
                    to meet the needs of Exchange-eligible individuals and
                    employers;
                        (D) administering affordability credits under
                    subtitle B using the same methodologies (and at least
                    the same income verification methods) as would
                    otherwise apply under such subtitle and at a cost to
                    the Federal Government which does exceed the cost to
                    the Federal Government if this section did not apply;
                    and
                        (E) enforcement activities consistent with federal
                    requirements.
                (2) There is no more than one Health Insurance Exchange
            operating with respect to any one State.
                (3) The State provides assurances satisfactory to the
            Commissioner that approval of such an Exchange will not result
            in any net increase in expenditures to the Federal Government.
                (4) The State provides for reporting of such information as
            the Commissioner determines and assurances satisfactory to the
            Commissioner that it will vigorously enforce violations of
            applicable requirements.
                (5) Such other requirements as the Commissioner may
            specify.
        (c) Ceasing Operation.--
                (1) In general.--A State-based Health Insurance Exchange
            may, at the option of each State involved, and only after
            providing timely and reasonable notice to the Commissioner,
            cease operation as such an Exchange, in which case the Health
            Insurance Exchange shall operate, instead of such State-based
            Health Insurance Exchange, with respect to such State (or
            States).
                (2) Termination; health insurance exchange resumption of
            functions.--The Commissioner may terminate the approval (for
            some or all functions) of a State-based Health Insurance
            Exchange under this section if the Commissioner determines that
            such Exchange no longer meets the requirements of subsection
            (b) or is no longer capable of carrying out such functions in
            accordance with the requirements of this subtitle. In lieu of
            terminating such approval, the Commissioner may temporarily
            assume some or all functions of the State-based Health
            Insurance Exchange until such time as the Commissioner
            determines the State-based Health Insurance Exchange meets such
            requirements of subsection (b) and is capable of carrying out
            such functions in accordance with the requirements of this
            subtitle.
                (3) Effectiveness.--The ceasing or termination of a State-
            based Health Insurance Exchange under this subsection shall be
            effective in such time and manner as the Commissioner shall
            specify.
        (d) Retention of Authority.--
                (1) Authority retained.--Enforcement authorities of the
            Commissioner shall be retained by the Commissioner.
                (2) Discretion to retain additional authority.--The
            Commissioner may specify functions of the Health Insurance
            Exchange that--
                        (A) may not be performed by a State-based Health
                    Insurance Exchange under this section; or
                        (B) may be performed by the Commissioner and by
                    such a State-based Health Insurance Exchange.
        (e) References.--In the case of a State-based Health Insurance
    Exchange, except as the Commissioner may otherwise specify under
    subsection (d), any references in this subtitle to the Health Insurance
    Exchange or to the Commissioner in the area in which the State-based
    Health Insurance Exchange operates shall be deemed a reference to the
    State-based Health Insurance Exchange and the head of such Exchange,
    respectively.
        (f) Funding.--In the case of a State-based Health Insurance
    Exchange, there shall be assistance provided for the operation of such
    Exchange in the form of a matching grant with a State share of
    expenditures required.

                   Subtitle B--Public Health Insurance Option

    SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE
                  OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.

        (a) Establishment.--For years beginning with Y1, the Secretary of
    Health and Human Services (in this subtitle referred to as the
    ``Secretary'') shall provide for the offering of an Exchange-
    participating health benefits plan (in this subdivision referred to as
    the ``public health insurance option'') that ensures choice,
    competition, and stability of affordable, high quality coverage
    throughout the United States in accordance with this subtitle. In
    designing the option, the Secretary's primary responsibility is to
    create a low-cost plan without compromising quality or access to care.
        (b) Offering as an Exchange-participating Health Benefits Plan.--
                (1) Exclusive to the exchange.--The public health insurance
            option shall only be made available through the Health
            Insurance Exchange.
                (2) Ensuring a level playing field.--Consistent with this
            subtitle, the public health insurance option shall comply with
            requirements that are applicable under this title to an
            Exchange-participating health benefits plan, including
            requirements related to benefits, benefit levels, provider
            networks, notices, consumer protections, and cost sharing.
                (3) Provision of benefit levels.--The public health
            insurance option--
                        (A) shall offer basic, enhanced, and premium plans;
                    and
                        (B) may offer premium-plus plans.
        (c) Administrative Contracting.--The Secretary may enter into
    contracts for the purpose of performing administrative functions
    (including functions described in subsection (a)(4) of section 1874A of
    the Social Security Act) with respect to the public health insurance
    option in the same manner as the Secretary may enter into contracts
    under subsection (a)(1) of such section. The Secretary has the same
    authority with respect to the public health insurance option as the
    Secretary has under subsections (a)(1) and (b) of section 1874A of the
    Social Security Act with respect to title XVIII of such Act. Contracts
    under this subsection shall not involve the transfer of insurance risk
    to such entity.
        (d) Ombudsman.--The Secretary shall establish an office of the
    ombudsman for the public health insurance option which shall have
    duties with respect to the public health insurance option similar to
    the duties of the Medicare Beneficiary Ombudsman under section
    1808(c)(2) of the Social Security Act.
        (e) Data Collection.--The Secretary shall collect such data as may
    be required to establish premiums and payment rates for the public
    health insurance option and for other purposes under this subtitle,
    including to improve quality and to reduce racial, ethnic, and other
    disparities in health and health care.
        (f) Treatment of Public Health Insurance Option.--With respect to
    the public health insurance option, the Secretary shall be treated as a
    QHBP offering entity offering an Exchange-participating health benefits
    plan.
        (g) Access to Federal Courts.--The provisions of Medicare (and
    related provisions of title II of the Social Security Act) relating to
    access of Medicare beneficiaries to Federal courts for the enforcement
    of rights under Medicare, including with respect to amounts in
    controversy, shall apply to the public health insurance option and
    individuals enrolled under such option under this title in the same
    manner as such provisions apply to Medicare and Medicare beneficiaries.

    SEC. 222. PREMIUMS AND FINANCING.

        (a) Establishment of Premiums.--
                (1) In general.--The Secretary shall establish
            geographically-adjusted premium rates for the public health
            insurance option in a manner--
                        (A) that complies with the premium rules
                    established by the Commissioner under section 113 for
                    Exchange-participating health benefit plans; and
                        (B) at a level sufficient to fully finance the
                    costs of--
                                (i) health benefits provided by the public
                            health insurance option; and
                                (ii) administrative costs related to
                            operating the public health insurance option.
                (2) Contingency margin.--In establishing premium rates
            under paragraph (1), the Secretary shall include an appropriate
            amount for a contingency margin.
        (b) Account.--
                (1) Establishment.--There is established in the Treasury of
            the United States an Account for the receipts and disbursements
            attributable to the operation of the public health insurance
            option, including the start-up funding under paragraph (2).
            Section 1854(g) of the Social Security Act shall apply to
            receipts described in the previous sentence in the same manner
            as such section applies to payments or premiums described in
            such section.
                (2) Start-up funding.--
                        (A) In general.--In order to provide for the
                    establishment of the public health insurance option
                    there is hereby appropriated to the Secretary, out of
                    any funds in the Treasury not otherwise appropriated,
                    $2,000,000,000. In order to provide for initial claims
                    reserves before the collection of premiums, there is
                    hereby appropriated to the Secretary, out of any funds
                    in the Treasury not otherwise appropriated, such sums
                    as necessary to cover 90 days worth of claims reserves
                    based on projected enrollment.
                        (B) Amortization of start-up funding.--The
                    Secretary shall provide for the repayment of the
                    startup funding provided under subparagraph (A) to the
                    Treasury in an amortized manner over the 10-year period
                    beginning with Y1.
                        (C) Limitation on funding.--Nothing in this section
                    shall be construed as authorizing any additional
                    appropriations to the Account, other than such amounts
                    as are otherwise provided with respect to other
                    Exchange-participating health benefits plans.

    SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.

        (a) Rates Established by Secretary.--
                (1) In general.--The Secretary shall establish payment
            rates for the public health insurance option for services and
            health care providers consistent with this section and may
            change such payment rates in accordance with section 224.
                (2) Initial payment rules.--
                        (A) In general.--Except as provided in subparagraph
                    (B) and subsection (b)(1), during Y1, Y2, and Y3, the
                    Secretary shall base the payment rates under this
                    section for services and providers described in
                    paragraph (1) on the payment rates for similar services
                    and providers under parts A and B of Medicare.
                        (B) Exceptions.--
                                (i) Practitioners' services.--Payment rates
                            for practitioners' services otherwise
                            established under the fee schedule under
                            section 1848 of the Social Security Act shall
                            be applied without regard to the provisions
                            under subsection (f) of such section and the
                            update under subsection (d)(4) under such
                            section for a year as applied under this
                            paragraph shall be not less than 1 percent.
                                (ii) Adjustments.--The Secretary may
                            determine the extent to which Medicare
                            adjustments applicable to base payment rates
                            under parts A and B of Medicare shall apply
                            under this subtitle.
                (3) For new services.--The Secretary shall modify payment
            rates described in paragraph (2) in order to accommodate
            payments for services, such as well-child visits, that are not
            otherwise covered under Medicare.
                (4) Prescription drugs.--Payment rates under this section
            for prescription drugs that are not paid for under part A or
            part B of Medicare shall be at rates negotiated by the
            Secretary.
        (b) Incentives for Participating Providers.--
                (1) Initial incentive period.--
                        (A) In general.--The Secretary shall provide, in
                    the case of services described in subparagraph (B)
                    furnished during Y1, Y2, and Y3, for payment rates that
                    are 5 percent greater than the rates established under
                    subsection (a).
                        (B) Services described.--The services described in
                    this subparagraph are items and professional services,
                    under the public health insurance option by a physician
                    or other health care practitioner who participates in
                    both Medicare and the public health insurance option.
                        (C) Special rules.--A pediatrician and any other
                    health care practitioner who is a type of practitioner
                    that does not typically participate in Medicare (as
                    determined by the Secretary) shall also be eligible for
                    the increased payment rates under subparagraph (A).
                (2) Subsequent periods.-- Beginning with Y4 and for
            subsequent years, the Secretary shall continue to use an
            administrative process to set such rates in order to promote
            payment accuracy, to ensure adequate beneficiary access to
            providers, and to promote affordability and the efficient
            delivery of medical care consistent with section 221(a). Such
            rates shall not be set at levels expected to increase overall
            medical costs under the option beyond what would be expected if
            the process under subsection (a)(2) and paragraph (1) of this
            subsection were continued.
                (3) Establishment of a provider network.--Health care
            providers participating under Medicare are participating
            providers in the public health insurance option unless they opt
            out in a process established by the Secretary.
        (c) Administrative Process for Setting Rates.--Chapter 5 of title
    5, United States Code shall apply to the process for the initial
    establishment of payment rates under this section but not to the
    specific methodology for establishing such rates or the calculation of
    such rates.
        (d) Construction.--Nothing in this subtitle shall be construed as
    limiting the Secretary's authority to correct for payments that are
    excessive or deficient, taking into account the provisions of section
    221(a) and the amounts paid for similar health care providers and
    services under other Exchange-participating health benefits plans.
        (e) Construction.--Nothing in this subtitle shall be construed as
    affecting the authority of the Secretary to establish payment rates,
    including payments to provide for the more efficient delivery of
    services, such as the initiatives provided for under section 224.
        (f) Limitations on Review.--There shall be no administrative or
    judicial review of a payment rate or methodology established under this
    section or under section 224.

    SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.

        (a) In General.--For plan years beginning with Y1, the Secretary
    may utilize innovative payment mechanisms and policies to determine
    payments for items and services under the public health insurance
    option. The payment mechanisms and policies under this section may
    include patient-centered medical home and other care management
    payments, accountable care organizations, value-based purchasing,
    bundling of services, differential payment rates, performance or
    utilization based payments, partial capitation, and direct contracting
    with providers.
        (b) Requirements for Innovative Payments.--The Secretary shall
    design and implement the payment mechanisms and policies under this
    section in a manner that--
                (1) seeks to--
                        (A) improve health outcomes;
                        (B) reduce health disparities (including racial,
                    ethnic, and other disparities);
                        (C) provide efficient and affordable care;
                        (D) address geographic variation in the provision
                    of health services; or
                        (E) prevent or manage chronic illness; and
                (2) promotes care that is integrated, patient-centered,
            quality, and efficient.
        (c) Encouraging the Use of High Value Services.--To the extent
    allowed by the benefit standards applied to all Exchange-participating
    health benefits plans, the public health insurance option may modify
    cost sharing and payment rates to encourage the use of services that
    promote health and value.
        (d) Non-uniformity Permitted.--Nothing in this subtitle shall
    prevent the Secretary from varying payments based on different payment
    structure models (such as accountable care organizations and medical
    homes) under the public health insurance option for different
    geographic areas.

    SEC. 225. PROVIDER PARTICIPATION.

        (a) In General.--The Secretary shall establish conditions of
    participation for health care providers under the public health
    insurance option.
        (b) Licensure or Certification.--The Secretary shall not allow a
    health care provider to participate in the public health insurance
    option unless such provider is appropriately licensed or certified
    under State law.
        (c) Payment Terms for Providers.--
                (1) Physicians.--The Secretary shall provide for the annual
            participation of physicians under the public health insurance
            option, for which payment may be made for services furnished
            during the year, in one of 2 classes:
                        (A) Preferred physicians.--Those physicians who
                    agree to accept the payment rate established under
                    section 223 (without regard to cost-sharing) as the
                    payment in full.
                        (B) Participating, non-preferred physicians.--Those
                    physicians who agree not to impose charges (in relation
                    to the payment rate described in section 223 for such
                    physicians) that exceed the ratio permitted under
                    section 1848(g)(2)(C) of the Social Security Act.
                (2) Other providers.--The Secretary shall provide for the
            participation (on an annual or other basis specified by the
            Secretary) of health care providers (other than physicians)
            under the public health insurance option under which payment
            shall only be available if the provider agrees to accept the
            payment rate established under section 223 (without regard to
            cost-sharing) as the payment in full.
        (d) Exclusion of Certain Providers.--The Secretary shall exclude
    from participation under the public health insurance option a health
    care provider that is excluded from participation in a Federal health
    care program (as defined in section 1128B(f) of the Social Security
    Act).

    SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.

        Provisions of law (other than criminal law provisions) identified
    by the Secretary by regulation, in consultation with the Inspector
    General of the Department of Health and Human Services, that impose
    sanctions with respect to waste, fraud, and abuse under Medicare, such
    as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to
    the public health insurance option.

                  Subtitle C--Individual Affordability Credits

    SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.

        (a) In General.--Subject to the succeeding provisions of this
    subtitle, in the case of an affordable credit eligible individual
    enrolled in an Exchange-participating health benefits plan--
                (1) the individual shall be eligible for, in accordance
            with this subtitle, affordability credits consisting of--
                        (A) an affordability premium credit under section
                    243 to be applied against the premium for the Exchange-
                    participating health benefits plan in which the
                    individual is enrolled; and
                        (B) an affordability cost-sharing credit under
                    section 244 to be applied as a reduction of the cost-
                    sharing otherwise applicable to such plan; and
                (2) the Commissioner shall pay the QHBP offering entity
            that offers such plan from the Health Insurance Exchange Trust
            Fund the aggregate amount of affordability credits for all
            affordable credit eligible individuals enrolled in such plan.
        (b) Application.--
                (1) In general.--An Exchange eligible individual may apply
            to the Commissioner through the Health Insurance Exchange or
            through another entity under an arrangement made with the
            Commissioner, in a form and manner specified by the
            Commissioner. The Commissioner through the Health Insurance
            Exchange or through another public entity under an arrangement
            made with the Commissioner shall make a determination as to
            eligibility of an individual for affordability credits under
            this subtitle. The Commissioner shall establish a process
            whereby, on the basis of information otherwise available,
            individuals may be deemed to be affordable credit eligible
            individuals. In carrying this subtitle, the Commissioner shall
            establish effective methods that ensure that individuals with
            limited English proficiency are able to apply for affordability
            credits.
                (2) Use of state medicaid agencies.--If the Commissioner
            determines that a State Medicaid agency has the capacity to
            make a determination of eligibility for affordability credits
            under this subtitle and under the same standards as used by the
            Commissioner, under the Medicaid memorandum of understanding
            (as defined in section 205(c)(4))--
                        (A) the State Medicaid agency is authorized to
                    conduct such determinations for any Exchange-eligible
                    individual who requests such a determination; and
                        (B) the Commissioner shall reimburse the State
                    Medicaid agency for the costs of conducting such
                    determinations.
                (3) Medicaid screen and enroll obligation.--In the case of
            an application made under paragraph (1), there shall be a
            determination of whether the individual is a Medicaid-eligible
            individual. If the individual is determined to be so eligible,
            the Commissioner, through the Medicaid memorandum of
            understanding, shall provide for the enrollment of the
            individual under the State Medicaid plan in accordance with the
            Medicaid memorandum of understanding. In the case of such an
            enrollment, the State shall provide for the same periodic
            redetermination of eligibility under Medicaid as would
            otherwise apply if the individual had directly applied for
            medical assistance to the State Medicaid agency.
        (c) Use of Affordability Credits.--
                (1) In general.--In Y1 and Y2 an affordable credit eligible
            individual may use an affordability credit only with respect to
            a basic plan.
                (2) Flexibility in plan enrollment authorized.--Beginning
            with Y3, the Commissioner shall establish a process to allow an
            affordability credit to be used for enrollees in enhanced or
            premium plans. In the case of an affordable credit eligible
            individual who enrolls in an enhanced or premium plan, the
            individual shall be responsible for any difference between the
            premium for such plan and the affordability credit amount
            otherwise applicable if the individual had enrolled in a basic
            plan.
        (d) Access to Data.--In carrying out this subtitle, the
    Commissioner shall request from the Secretary of the Treasury
    consistent with section 6103 of the Internal Revenue Code of 1986 such
    information as may be required to carry out this subtitle.
        (e) No Cash Rebates.--In no case shall an affordable credit
    eligible individual receive any cash payment as a result of the
    application of this subtitle.

    SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

        (a) Definition.--
                (1) In general.--For purposes of this subdivision, the term
            ``affordable credit eligible individual'' means, subject to
            subsection (b), an individual who is lawfully present in a
            State in the United States (other than as a nonimmigrant
            described in a subparagraph (excluding subparagraphs (K), (T),
            (U), and (V)) of section 101(a)(15) of the Immigration and
            Nationality Act)--
                        (A) who is enrolled under an Exchange-participating
                    health benefits plan and is not enrolled under such
                    plan as an employee (or dependent of an employee)
                    through an employer qualified health benefits plan that
                    meets the requirements of section 312;
                        (B) with family income below 400 percent of the
                    Federal poverty level for a family of the size
                    involved; and
                        (C) who is not a Medicaid eligible individual,
                    other than an individual described in section 202(d)(3)
                    or an individual during a transition period under
                    section 202(d)(4)(B)(ii).
                (2) Treatment of family.--Except as the Commissioner may
            otherwise provide, members of the same family who are
            affordable credit eligible individuals shall be treated as a
            single affordable credit individual eligible for the applicable
            credit for such a family under this subtitle.
        (b) Limitations on Employee and Dependent Disqualification.--
                (1) In general.--Subject to paragraph (2), the term
            ``affordable credit eligible individual'' does not include a
            full-time employee of an employer if the employer offers the
            employee coverage (for the employee and dependents) as a full-
            time employee under a group health plan if the coverage and
            employer contribution under the plan meet the requirements of
            section 312.
                (2) Exceptions.--
                        (A) For certain family circumstances.--The
                    Commissioner shall establish such exceptions and
                    special rules in the case described in paragraph (1) as
                    may be appropriate in the case of a divorced or
                    separated individual or such a dependent of an employee
                    who would otherwise be an affordable credit eligible
                    individual.
                        (B) For unaffordable employer coverage.--Beginning
                    in Y2, in the case of full-time employees for which the
                    cost of the employee premium for coverage under a group
                    health plan would exceed 11 percent of current family
                    income (determined by the Commissioner on the basis of
                    verifiable documentation and without regard to section
                    245), paragraph (1) shall not apply.
        (c) Income Defined.--
                (1) In general.--In this title, the term ``income'' means
            modified adjusted gross income (as defined in section 59B of
            the Internal Revenue Code of 1986).
                (2) Study of income disregards.--The Commissioner shall
            conduct a study that examines the application of income
            disregards for purposes of this subtitle. Not later than the
            first day of Y2, the Commissioner shall submit to Congress a
            report on such study and shall include such recommendations as
            the Commissioner determines appropriate.
        (d) Clarification of Treatment of Affordability Credits.--
    Affordability credits under this subtitle shall not be treated, for
    purposes of title IV of the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996, to be a benefit provided under
    section 403 of such title.

    SEC. 243. AFFORDABILITY PREMIUM CREDIT.

        (a) In General.--The affordability premium credit under this
    section for an affordable credit eligible individual enrolled in an
    Exchange-participating health benefits plan is in an amount equal to
    the amount (if any) by which the premium for the plan (or, if less, the
    reference premium amount specified in subsection (c)), exceeds the
    affordable premium amount specified in subsection (b) for the
    individual.
        (b) Affordable Premium Amount.--
                (1) In general.--The affordable premium amount specified in
            this subsection for an individual for monthly premium in a plan
            year shall be equal to \1/12 \ of the product of--
                        (A) the premium percentage limit specified in
                    paragraph (2) for the individual based upon the
                    individual's family income for the plan year; and
                        (B) the individual's family income for such plan
                    year.
                (2) Premium percentage limits based on table.--The
            Commissioner shall establish premium percentage limits so that
            for individuals whose family income is within an income tier
            specified in the table in subsection (d) such percentage limits
            shall increase, on a sliding scale in a linear manner, from the
            initial premium percentage to the final premium percentage
            specified in such table for such income tier.
        (c) Reference Premium Amount.--The reference premium amount
    specified in this subsection for a plan year for an individual in a
    premium rating area is equal to the average premium for the 3 basic
    plans in the area for the plan year with the lowest premium levels. In
    computing such amount the Commissioner may exclude plans with extremely
    limited enrollments.
        (d) Table of Premium Percentage Limits and Actuarial Value
    Percentages Based on Income Tier.--
                (1) In general.--For purposes of this subtitle, the table
            specified in this subsection is as follows:

       In the case of family income
     (expressed as a percent of FPL)      The initial premium         The final premium        The actuarial value
    within the following income tier:       percentage is--            percentage is--           percentage is--

    133% through 150%                  1.5%                       3%                        97%
    150% through 200%                  3%                         5%                        93%
    200% through 250%                  5%                         7%                        85%
    250% through 300%                  7%                         9%                        78%
    300% through 350%                  9%                         10%                       72%
    350% through 400%                  10%                        11%                       70%

                (2) Special rules.--For purposes of applying the table
            under paragraph (1)--
                        (A) For lowest level of income.--In the case of an
                    individual with income that does not exceed 133 percent
                    of FPL, the individual shall be considered to have
                    income that is 133% of FPL.
                        (B) Application of higher actuarial value
                    percentage at tier transition points.--If two actuarial
                    value percentages may be determined with respect to an
                    individual, the actuarial value percentage shall be the
                    higher of such percentages.

    SEC. 244. AFFORDABILITY COST-SHARING CREDIT.

        (a) In General.--The affordability cost-sharing credit under this
    section for an affordable credit eligible individual enrolled in an
    Exchange-participating health benefits plan is in the form of the cost-
    sharing reduction described in subsection (b) provided under this
    section for the income tier in which the individual is classified based
    on the individual's family income.
        (b) Cost-sharing Reductions.--The Commissioner shall specify a
    reduction in cost-sharing amounts and the annual limitation on cost-
    sharing specified in section 122(c)(2)(B) under a basic plan for each
    income tier specified in the table under section 243(d), with respect
    to a year, in a manner so that, as estimated by the Commissioner, the
    actuarial value of the coverage with such reduced cost-sharing amounts
    (and the reduced annual cost-sharing limit) is equal to the actuarial
    value percentage (specified in the table under section 243(d) for the
    income tier involved) of the full actuarial value if there were no
    cost-sharing imposed under the plan.
        (c) Determination and Payment of Cost-sharing Affordability
    Credit.--In the case of an affordable credit eligible individual in a
    tier enrolled in an Exchange-participating health benefits plan offered
    by a QHBP offering entity, the Commissioner shall provide for payment
    to the offering entity of an amount equivalent to the increased
    actuarial value of the benefits under the plan provided under section
    203(c)(2)(B) resulting from the reduction in cost-sharing described in
    subsection (b).

    SEC. 245. INCOME DETERMINATIONS.

        (a) In General.--In applying this subtitle for an affordability
    credit for an individual for a plan year, the individual's income shall
    be the income (as defined in section 242(c)) for the individual for the
    most recent taxable year (as determined in accordance with rules of the
    Commissioner). The Federal poverty level applied shall be such level in
    effect as of the date of the application.
        (b) Program Integrity; Income Verification Procedures.--
                (1) Program integrity.--The Commissioner shall take such
            steps as may be appropriate to ensure the accuracy of
            determinations and redeterminations under this subtitle.
                (2) Income verification.--
                        (A) In general.--Upon an initial application of an
                    individual for an affordability credit under this
                    subtitle (or in applying section 242(b)) or upon an
                    application for a change in the affordability credit
                    based upon a significant change in family income
                    described in subparagraph (A)--
                                (i) the Commissioner shall request from the
                            Secretary of the Treasury the disclosure to the
                            Commissioner of such information as may be
                            permitted to verify the information contained
                            in such application; and
                                (ii) the Commissioner shall use the
                            information so disclosed to verify such
                            information.
                        (B) Alternative procedures.--The Commissioner shall
                    establish procedures for the verification of income for
                    purposes of this subtitle if no income tax return is
                    available for the most recent completed tax year.
        (c) Special Rules.--
                (1) Changes in income as a percent of fpl.--In the case
            that an individual's income (expressed as a percentage of the
            Federal poverty level for a family of the size involved) for a
            plan year is expected (in a manner specified by the
            Commissioner) to be significantly different from the income (as
            so expressed) used under subsection (a), the Commissioner shall
            establish rules requiring an individual to report, consistent
            with the mechanism established under paragraph (2), significant
            changes in such income (including a significant change in
            family composition) to the Commissioner and requiring the
            substitution of such income for the income otherwise
            applicable.
                (2) Reporting of significant changes in income.--The
            Commissioner shall establish rules under which an individual
            determined to be an affordable credit eligible individual would
            be required to inform the Commissioner when there is a
            significant change in the family income of the individual
            (expressed as a percentage of the FPL for a family of the size
            involved) and of the information regarding such change. Such
            mechanism shall provide for guidelines that specify the
            circumstances that qualify as a significant change, the
            verifiable information required to document such a change, and
            the process for submission of such information. If the
            Commissioner receives new information from an individual
            regarding the family income of the individual, the Commissioner
            shall provide for a redetermination of the individual's
            eligibility to be an affordable credit eligible individual.
                (3) Transition for chip.--In the case of a child described
            in section 202(d)(2), the Commissioner shall establish rules
            under which the family income of the child is deemed to be no
            greater than the family income of the child as most recently
            determined before Y1 by the State under title XXI of the Social
            Security Act.
                (4) Study of geographic variation in application of fpl.--
            The Commissioner shall examine the feasibility and implication
            of adjusting the application of the Federal poverty level under
            this subtitle for different geographic areas so as to reflect
            the variations in cost-of-living among different areas within
            the United States. If the Commissioner determines that an
            adjustment is feasible, the study should include a methodology
            to make such an adjustment. Not later than the first day of Y2,
            the Commissioner shall submit to Congress a report on such
            study and shall include such recommendations as the
            Commissioner determines appropriate.
        (d) Penalties for Misrepresentation.--In the case of an individual
    intentionally misrepresents family income or the individual fails
    (without regard to intent) to disclose to the Commissioner a
    significant change in family income under subsection (c) in a manner
    that results in the individual becoming an affordable credit eligible
    individual when the individual is not or in the amount of the
    affordability credit exceeding the correct amount--
                (1) the individual is liable for repayment of the amount of
            the improper affordability credit; ;and
                (2) in the case of such an intentional misrepresentation or
            other egregious circumstances specified by the Commissioner,
            the Commissioner may impose an additional penalty.

    SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

        Nothing in this subtitle shall allow Federal payments for
    affordability credits on behalf of individuals who are not lawfully
    present in the United States.

                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    SEC. 301. INDIVIDUAL RESPONSIBILITY.

        For an individual's responsibility to obtain acceptable coverage,
    see section 59B of the Internal Revenue Code of 1986 (as added by
    section 401 of this division).

                      Subtitle B--Employer Responsibility

               PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        An employer meets the requirements of this section if such employer
    does all of the following:
                (1) Offer of coverage.--The employer offers each employee
            individual and family coverage under a qualified health
            benefits plan (or under a current employment-based health plan
            (within the meaning of section 102(b))) in accordance with
            section 312.
                (2) Contribution towards coverage.--If an employee accepts
            such offer of coverage, the employer makes timely contributions
            towards such coverage in accordance with section 312.
                (3) Contribution in lieu of coverage.--Beginning with Y2,
            if an employee declines such offer but otherwise obtains
            coverage in an Exchange-participating health benefits plan
            (other than by reason of being covered by family coverage as a
            spouse or dependent of the primary insured), the employer shall
            make a timely contribution to the Health Insurance Exchange
            with respect to each such employee in accordance with section
            313.

    SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND
                  DEPENDENT COVERAGE.

        (a) In General.--An employer meets the requirements of this section
    with respect to an employee if the following requirements are met:
                (1) Offering of coverage.--The employer offers the coverage
            described in section 311(1) either through an Exchange-
            participating health benefits plan or other than through such a
            plan.
                (2) Employer required contribution.--The employer timely
            pays to the issuer of such coverage an amount not less than the
            employer required contribution specified in subsection (b) for
            such coverage.
                (3) Provision of information.--The employer provides the
            Health Choices Commissioner, the Secretary of Labor, the
            Secretary of Health and Human Services, and the Secretary of
            the Treasury, as applicable, with such information as the
            Commissioner may require to ascertain compliance with the
            requirements of this section.
                (4) Autoenrollment of employees.--The employer provides for
            autoenrollment of the employee in accordance with subsection
            (c).
        (b) Reduction of Employee Premiums Through Minimum Employer
    Contribution.--
                (1) Full-time employees.--The minimum employer contribution
            described in this subsection for coverage of a full-time
            employee (and, if any, the employee's spouse and qualifying
            children (as defined in section 152(c) of the Internal Revenue
            Code of 1986) under a qualified health benefits plan (or
            current employment-based health plan) is equal to--
                        (A) in case of individual coverage, not less than
                    72.5 percent of the applicable premium (as defined in
                    section 4980B(f)(4) of such Code, subject to paragraph
                    (2)) of the lowest cost plan offered by the employer
                    that is a qualified health benefits plan (or is such
                    current employment-based health plan); and
                        (B) in the case of family coverage which includes
                    coverage of such spouse and children, not less 65
                    percent of such applicable premium of such lowest cost
                    plan.
                (2) Applicable premium for exchange coverage.--In this
            subtitle, the amount of the applicable premium of the lowest
            cost plan with respect to coverage of an employee under an
            Exchange-participating health benefits plan is the reference
            premium amount under section 243(c) for individual coverage
            (or, if elected, family coverage) for the premium rating area
            in which the individual or family resides.
                (3) Minimum employer contribution for employees other than
            full-time employees.--In the case of coverage for an employee
            who is not a full-time employee, the amount of the minimum
            employer contribution under this subsection shall be a
            proportion (as determined in accordance with rules of the
            Health Choices Commissioner, the Secretary of Labor, the
            Secretary of Health and Human Services, and the Secretary of
            the Treasury, as applicable) of the minimum employer
            contribution under this subsection with respect to a full-time
            employee that reflects the proportion of--
                        (A) the average weekly hours of employment of the
                    employee by the employer, to
                        (B) the minimum weekly hours specified by the
                    Commissioner for an employee to be a full-time
                    employee.
                (4) Salary reductions not treated as employer
            contributions.--For purposes of this section, any contribution
            on behalf of an employee with respect to which there is a
            corresponding reduction in the compensation of the employee
            shall not be treated as an amount paid by the employer.
        (c) Automatic Enrollment for Employer Sponsored Health Benefits.--
                (1) In general.--The requirement of this subsection with
            respect to an employer and an employee is that the employer
            automatically enroll such employee into the employment-based
            health benefits plan for individual coverage under the plan
            option with the lowest applicable employee premium.
                (2) Opt-out.--In no case may an employer automatically
            enroll an employee in a plan under paragraph (1) if such
            employee makes an affirmative election to opt out of such plan
            or to elect coverage under an employment-based health benefits
            plan offered by such employer. An employer shall provide an
            employee with a 30-day period to make such an affirmative
            election before the employer may automatically enroll the
            employee in such a plan.
                (3) Notice requirements.--
                        (A) In general.--Each employer described in
                    paragraph (1) who automatically enrolls an employee
                    into a plan as described in such paragraph shall
                    provide the employees, within a reasonable period
                    before the beginning of each plan year (or, in the case
                    of new employees, within a reasonable period before the
                    end of the enrollment period for such a new employee),
                    written notice of the employees' rights and obligations
                    relating to the automatic enrollment requirement under
                    such paragraph. Such notice must be comprehensive and
                    understood by the average employee to whom the
                    automatic enrollment requirement applies.
                        (B) Inclusion of specific information.--The written
                    notice under subparagraph (A) must explain an
                    employee's right to opt out of being automatically
                    enrolled in a plan and in the case that more than one
                    level of benefits or employee premium level is offered
                    by the employer involved, the notice must explain which
                    level of benefits and employee premium level the
                    employee will be automatically enrolled in the absence
                    of an affirmative election by the employee.

    SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.

        (a) In General.--A contribution is made in accordance with this
    section with respect to an employee if such contribution is equal to an
    amount equal to 8 percent of the average wages paid by the employer
    during the period of enrollment (determined by taking into account all
    employees of the employer and in such manner as the Commissioner
    provides, including rules providing for the appropriate aggregation of
    related employers). Any such contribution--
                (1) shall be paid to the Health Choices Commissioner for
            deposit into the Health Insurance Exchange Trust Fund, and
                (2) shall not be applied against the premium of the
            employee under the Exchange-participating health benefits plan
            in which the employee is enrolled.
        (b) Special Rules for Small Employers.--
                (1) In general.--In the case of any employer who is a small
            employer for any calendar year, subsection (a) shall be applied
            by substituting the applicable percentage determined in
            accordance with the following table for ``8 percent'':

    If the annual payroll of such employer   The applicable percentage is:
     for the preceding calendar year:
      Does not exceed $250,000.............  0 percent
      Exceeds $250,000, but does not exceed  2 percent
       $300,000.
      Exceeds $300,000, but does not exceed  4 percent
       $350,000.
      Exceeds $350,000, but does not exceed  6 percent
       $400,000.

                (2) Small employer.--For purposes of this subsection, the
            term ``small employer'' means any employer for any calendar
            year if the annual payroll of such employer for the preceding
            calendar year does not exceed $400,000.
                (3) Annual payroll.--For purposes of this paragraph, the
            term ``annual payroll'' means, with respect to any employer for
            any calendar year, the aggregate wages paid by the employer
            during such calendar year.
                (4) Aggregation rules.--Related employers and predecessors
            shall be treated as a single employer for purposes of this
            subsection.

    SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.

        The Health Choices Commissioner (in coordination with the Secretary
    of Labor, the Secretary of Health and Human Services, and the Secretary
    of the Treasury) shall have authority to set standards for determining
    whether employers or insurers are undertaking any actions to affect the
    risk pool within the Health Insurance Exchange by inducing individuals
    to decline coverage under a qualified health benefits plan (or current
    employment-based health plan (within the meaning of section 102(b))
    offered by the employer and instead to enroll in an Exchange-
    participating health benefits plan. An employer violating such
    standards shall be treated as not meeting the requirements of this
    section.

       PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
                  1974.

        (a) In General.--Subtitle B of title I of the Employee Retirement
    Income Security Act of 1974 is amended by adding at the end the
    following new part:

         ``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    ``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH
                  COVERAGE PARTICIPATION REQUIREMENTS.

        ``(a) In General.--An employer may make an election with the
    Secretary to be subject to the health coverage participation
    requirements.
        ``(b) Time and Manner.--An election under subsection (a) may be
    made at such time and in such form and manner as the Secretary may
    prescribe.

    ``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.

        ``(a) In General.--If an employer makes an election to the
    Secretary under section 801--
                ``(1) such election shall be treated as the establishment
            and maintenance of a group health plan (as defined in section
            733(a)) for purposes of this title, subject to section 151 of
            the America's Affordable Health Choices Act of 2009, and
                ``(2) the health coverage participation requirements shall
            be deemed to be included as terms and conditions of such plan.
        ``(b) Periodic Investigations to Discover Noncompliance.--The
    Secretary shall regularly audit a representative sampling of employers
    and group health plans and conduct investigations and other activities
    under section 504 with respect to such sampling of plans so as to
    discover noncompliance with the health coverage participation
    requirements in connection with such plans. The Secretary shall
    communicate findings of noncompliance made by the Secretary under this
    subsection to the Secretary of the Treasury and the Health Choices
    Commissioner. The Secretary shall take such timely enforcement action
    as appropriate to achieve compliance.

    ``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        ``For purposes of this part, the term `health coverage
    participation requirements' means the requirements of part 1 of
    subtitle B of title III of subdivision A of America's Affordable Health
    Choices Act of 2009 (as in effect on the date of the enactment of such
    Act).

    ``SEC. 804. RULES FOR APPLYING REQUIREMENTS.

        ``(a) Affiliated Groups.--In the case of any employer which is part
    of a group of employers who are treated as a single employer under
    subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue
    Code of 1986, the election under section 801 shall be made by such
    employer as the Secretary may provide. Any such election, once made,
    shall apply to all members of such group.
        ``(b) Separate Elections.--Under regulations prescribed by the
    Secretary, separate elections may be made under section 801 with
    respect to--
                ``(1) separate lines of business, and
                ``(2) full-time employees and employees who are not full-
            time employees.

    ``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
                  NONCOMPLIANCE.

        ``The Secretary may terminate the election of any employer under
    section 801 if the Secretary (in coordination with the Health Choices
    Commissioner) determines that such employer is in substantial
    noncompliance with the health coverage participation requirements and
    shall refer any such determination to the Secretary of the Treasury as
    appropriate.

    ``SEC. 806. REGULATIONS.

        ``The Secretary may promulgate such regulations as may be necessary
    or appropriate to carry out the provisions of this part, in accordance
    with section 324(a) of the America's Affordable Health Choices Act of
    2009. The Secretary may promulgate any interim final rules as the
    Secretary determines are appropriate to carry out this part.''.
        (b) Enforcement of Health Coverage Participation Requirements.--
    Section 502 of such Act (29 U.S.C. 1132) is amended--
                (1) in subsection (a)(6), by striking ``paragraph'' and all
            that follows through ``subsection (c)'' and inserting
            ``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of
            subsection (c)''; and
                (2) in subsection (c), by redesignating the second
            paragraph (10) as paragraph (12) and by inserting after the
            first paragraph (10) the following new paragraph:
                ``(11) Health coverage participation requirements.--
                        ``(A) Civil penalties.--In the case of any employer
                    who fails (during any period with respect to which an
                    election under section 801(a) is in effect) to satisfy
                    the health coverage participation requirements with
                    respect to any employee, the Secretary may assess a
                    civil penalty against the employer of $100 for each day
                    in the period beginning on the date such failure first
                    occurs and ending on the date such failure is
                    corrected.
                        ``(B) Health coverage participation requirements.--
                    For purposes of this paragraph, the term `health
                    coverage participation requirements' has the meaning
                    provided in section 803.
                        ``(C) Limitations on amount of penalty.--
                                ``(i) Penalty not to apply where failure
                            not discovered exercising reasonable
                            diligence.--No penalty shall be assessed under
                            subparagraph (A) with respect to any failure
                            during any period for which it is established
                            to the satisfaction of the Secretary that the
                            employer did not know, or exercising reasonable
                            diligence would not have known, that such
                            failure existed.
                                ``(ii) Penalty not to apply to failures
                            corrected within 30 days.--No penalty shall be
                            assessed under subparagraph (A) with respect to
                            any failure if--
                                        ``(I) such failure was due to
                                    reasonable cause and not to willful
                                    neglect, and
                                        ``(II) such failure is corrected
                                    during the 30-day period beginning on
                                    the 1st date that the employer knew, or
                                    exercising reasonable diligence would
                                    have known, that such failure existed.
                                ``(iii) Overall limitation for
                            unintentional failures.--In the case of
                            failures which are due to reasonable cause and
                            not to willful neglect, the penalty assessed
                            under subparagraph (A) for failures during any
                            1-year period shall not exceed the amount equal
                            to the lesser of--
                                        ``(I) 10 percent of the aggregate
                                    amount paid or incurred by the employer
                                    (or predecessor employer) during the
                                    preceding 1-year period for group
                                    health plans, or
                                        ``(II) $500,000.
                        ``(D) Advance notification of failure prior to
                    assessment.--Before a reasonable time prior to the
                    assessment of any penalty under this paragraph with
                    respect to any failure by an employer, the Secretary
                    shall inform the employer in writing of such failure
                    and shall provide the employer information regarding
                    efforts and procedures which may be undertaken by the
                    employer to correct such failure.
                        ``(E) Coordination with excise tax.--Under
                    regulations prescribed in accordance with section 324
                    of the America's Affordable Health Choices Act of 2009,
                    the Secretary and the Secretary of the Treasury shall
                    coordinate the assessment of penalties under this
                    section in connection with failures to satisfy health
                    coverage participation requirements with the imposition
                    of excise taxes on such failures under section 4980H(b)
                    of the Internal Revenue Code of 1986 so as to avoid
                    duplication of penalties with respect to such failures.
                        ``(F) Deposit of penalty collected.--Any amount of
                    penalty collected under this paragraph shall be
                    deposited as miscellaneous receipts in the Treasury of
                    the United States.''.
        (c) Clerical Amendments.--The table of contents in section 1 of
    such Act is amended by inserting after the item relating to section 734
    the following new items:

         ``Part 8--National Health Coverage Participation Requirements

    ``Sec. 801. Election of employer to be subject to national health
                                coverage participation requirements.
    ``Sec. 802. Treatment of coverage resulting from election.
    ``Sec. 803. Health coverage participation requirements.
    ``Sec. 804. Rules for applying requirements.
    ``Sec. 805. Termination of election in cases of substantial
                                noncompliance.
    ``Sec. 806. Regulations.''.
        (d) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE INTERNAL REVENUE CODE OF 1986.

        (a) Failure to Elect, or Substantially Comply With, Health Coverage
    Participation Requirements.--For employment tax on employers who fail
    to elect, or substantially comply with, the health coverage
    participation requirements described in part 1, see section 3111(c) of
    the Internal Revenue Code of 1986 (as added by section 412 of this
    division).
        (b) Other Failures.--For excise tax on other failures of electing
    employers to comply with such requirements, see section 4980H of the
    Internal Revenue Code of 1986 (as added by section 411 of this
    division).

    SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE PUBLIC HEALTH SERVICE ACT.

        (a) In General.--Part C of title XXVII of the Public Health Service
    Act is amended by adding at the end the following new section:

    ``SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        ``(a) Election of Employer to Be Subject to National Health
    Coverage Participation Requirements.--
                ``(1) In general.--An employer may make an election with
            the Secretary to be subject to the health coverage
            participation requirements.
                ``(2) Time and manner.--An election under paragraph (1) may
            be made at such time and in such form and manner as the
            Secretary may prescribe.
        ``(b) Treatment of Coverage Resulting From Election.--
                ``(1) In general.--If an employer makes an election to the
            Secretary under subsection (a)--
                        ``(A) such election shall be treated as the
                    establishment and maintenance of a group health plan
                    for purposes of this title, subject to section 151 of
                    the America's Affordable Health Choices Act of 2009,
                    and
                        ``(B) the health coverage participation
                    requirements shall be deemed to be included as terms
                    and conditions of such plan.
                ``(2) Periodic investigations to determine compliance with
            health coverage participation requirements.--The Secretary
            shall regularly audit a representative sampling of employers
            and conduct investigations and other activities with respect to
            such sampling of employers so as to discover noncompliance with
            the health coverage participation requirements in connection
            with such employers (during any period with respect to which an
            election under subsection (a) is in effect). The Secretary
            shall communicate findings of noncompliance made by the
            Secretary under this subsection to the Secretary of the
            Treasury and the Health Choices Commissioner. The Secretary
            shall take such timely enforcement action as appropriate to
            achieve compliance.
        ``(c) Health Coverage Participation Requirements.--For purposes of
    this section, the term `health coverage participation requirements'
    means the requirements of part 1 of subtitle B of title III of
    subdivision A of the America's Affordable Health Choices Act of 2009
    (as in effect on the date of the enactment of this section).
        ``(d) Separate Elections.--Under regulations prescribed by the
    Secretary, separate elections may be made under subsection (a) with
    respect to full-time employees and employees who are not full-time
    employees.
        ``(e) Termination of Election in Cases of Substantial
    Noncompliance.--The Secretary may terminate the election of any
    employer under subsection (a) if the Secretary (in coordination with
    the Health Choices Commissioner) determines that such employer is in
    substantial noncompliance with the health coverage participation
    requirements and shall refer any such determination to the Secretary of
    the Treasury as appropriate.
        ``(f) Enforcement of Health Coverage Participation Requirements.--
                ``(1) Civil penalties.--In the case of any employer who
            fails (during any period with respect to which the election
            under subsection (a) is in effect) to satisfy the health
            coverage participation requirements with respect to any
            employee, the Secretary may assess a civil penalty against the
            employer of $100 for each day in the period beginning on the
            date such failure first occurs and ending on the date such
            failure is corrected.
                ``(2) Limitations on amount of penalty.--
                        ``(A) Penalty not to apply where failure not
                    discovered exercising reasonable diligence.--No penalty
                    shall be assessed under paragraph (1) with respect to
                    any failure during any period for which it is
                    established to the satisfaction of the Secretary that
                    the employer did not know, or exercising reasonable
                    diligence would not have known, that such failure
                    existed.
                        ``(B) Penalty not to apply to failures corrected
                    within 30 days.--No penalty shall be assessed under
                    paragraph (1) with respect to any failure if--
                                ``(i) such failure was due to reasonable
                            cause and not to willful neglect, and
                                ``(ii) such failure is corrected during the
                            30-day period beginning on the 1st date that
                            the employer knew, or exercising reasonable
                            diligence would have known, that such failure
                            existed.
                        ``(C) Overall limitation for unintentional
                    failures.--In the case of failures which are due to
                    reasonable cause and not to willful neglect, the
                    penalty assessed under paragraph (1) for failures
                    during any 1-year period shall not exceed the amount
                    equal to the lesser of--
                                ``(i) 10 percent of the aggregate amount
                            paid or incurred by the employer (or
                            predecessor employer) during the preceding
                            taxable year for group health plans, or
                                ``(ii) $500,000.
                ``(3) Advance notification of failure prior to
            assessment.--Before a reasonable time prior to the assessment
            of any penalty under paragraph (1) with respect to any failure
            by an employer, the Secretary shall inform the employer in
            writing of such failure and shall provide the employer
            information regarding efforts and procedures which may be
            undertaken by the employer to correct such failure.
                ``(4) Actions to enforce assessments.--The Secretary may
            bring a civil action in any District Court of the United States
            to collect any civil penalty under this subsection.
                ``(5) Coordination with excise tax.--Under regulations
            prescribed in accordance with section 324 of the America's
            Affordable Health Choices Act of 2009, the Secretary and the
            Secretary of the Treasury shall coordinate the assessment of
            penalties under paragraph (1) in connection with failures to
            satisfy health coverage participation requirements with the
            imposition of excise taxes on such failures under section
            4980H(b) of the Internal Revenue Code of 1986 so as to avoid
            duplication of penalties with respect to such failures.
                ``(6) Deposit of penalty collected.--Any amount of penalty
            collected under this subsection shall be deposited as
            miscellaneous receipts in the Treasury of the United States.
        ``(g) Regulations.--The Secretary may promulgate such regulations
    as may be necessary or appropriate to carry out the provisions of this
    section, in accordance with section 324(a) of the America's Affordable
    Health Choices Act of 2009. The Secretary may promulgate any interim
    final rules as the Secretary determines are appropriate to carry out
    this section.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to periods beginning after December 31, 2012.

    SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

        (a) Assuring Coordination.--The officers consisting of the
    Secretary of Labor, the Secretary of the Treasury, the Secretary of
    Health and Human Services, and the Health Choices Commissioner shall
    ensure, through the execution of an interagency memorandum of
    understanding among such officers, that--
                (1) regulations, rulings, and interpretations issued by
            such officers relating to the same matter over which two or
            more of such officers have responsibility under subpart B of
            part 6 of subtitle B of title I of the Employee Retirement
            Income Security Act of 1974, section 4980H of the Internal
            Revenue Code of 1986, and section 2793 of the Public Health
            Service Act are administered so as to have the same effect at
            all times; and
                (2) coordination of policies relating to enforcing the same
            requirements through such officers in order to have a
            coordinated enforcement strategy that avoids duplication of
            enforcement efforts and assigns priorities in enforcement.
        (b) Multiemployer Plans.--In the case of a group health plan that
    is a multiemployer plan (as defined in section 3(37) of the Employee
    Retirement Income Security Act of 1974), the regulations prescribed in
    accordance with subsection (a) by the officers referred to in
    subsection (a) shall provide for the application of the health coverage
    participation requirements to the plan sponsor and contributing
    sponsors of such plan.

             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

                       PART 1--INDIVIDUAL RESPONSIBILITY

    SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

        (a) In General.--Subchapter A of chapter 1 of the Internal Revenue
    Code of 1986 is amended by adding at the end the following new part:

                     ``PART VIII--HEALTH CARE RELATED TAXES

        ``subpart a. tax on individuals without acceptable health care
                                   coverage.

    ``Subpart A--Tax on Individuals Without Acceptable Health Care Coverage

    ``Sec. 59B. Tax on individuals without acceptable health care coverage.

    ``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

        ``(a) Tax Imposed.--In the case of any individual who does not meet
    the requirements of subsection (d) at any time during the taxable year,
    there is hereby imposed a tax equal to 2.5 percent of the excess of--
                ``(1) the taxpayer's modified adjusted gross income for the
            taxable year, over
                ``(2) the amount of gross income specified in section
            6012(a)(1) with respect to the taxpayer.
        ``(b) Limitations.--
                ``(1) Tax limited to average premium.--
                        ``(A) In general.--The tax imposed under subsection
                    (a) with respect to any taxpayer for any taxable year
                    shall not exceed the applicable national average
                    premium for such taxable year.
                        ``(B) Applicable national average premium.--
                                ``(i) In general.--For purposes of
                            subparagraph (A), the `applicable national
                            average premium' means, with respect to any
                            taxable year, the average premium (as
                            determined by the Secretary, in coordination
                            with the Health Choices Commissioner) for self-
                            only coverage under a basic plan which is
                            offered in a Health Insurance Exchange for the
                            calendar year in which such taxable year
                            begins.
                                ``(ii) Failure to provide coverage for more
                            than one individual.--In the case of any
                            taxpayer who fails to meet the requirements of
                            subsection (e) with respect to more than one
                            individual during the taxable year, clause (i)
                            shall be applied by substituting `family
                            coverage' for `self-only coverage'.
                ``(2) Proration for part year failures.--The tax imposed
            under subsection (a) with respect to any taxpayer for any
            taxable year shall not exceed the amount which bears the same
            ratio to the amount of tax so imposed (determined without
            regard to this paragraph and after application of paragraph
            (1)) as--
                        ``(A) the aggregate periods during such taxable
                    year for which such individual failed to meet the
                    requirements of subsection (d), bears to
                        ``(B) the entire taxable year.
        ``(c) Exceptions.--
                ``(1) Dependents.--Subsection (a) shall not apply to any
            individual for any taxable year if a deduction is allowable
            under section 151 with respect to such individual to another
            taxpayer for any taxable year beginning in the same calendar
            year as such taxable year.
                ``(2) Nonresident aliens.--Subsection (a) shall not apply
            to any individual who is a nonresident alien.
                ``(3) Individuals residing outside united states.--Any
            qualified individual (as defined in section 911(d)) (and any
            qualifying child residing with such individual) shall be
            treated for purposes of this section as covered by acceptable
            coverage during the period described in subparagraph (A) or (B)
            of section 911(d)(1), whichever is applicable.
                ``(4) Individuals residing in possessions of the united
            states.--Any individual who is a bona fide resident of any
            possession of the United States (as determined under section
            937(a)) for any taxable year (and any qualifying child residing
            with such individual) shall be treated for purposes of this
            section as covered by acceptable coverage during such taxable
            year.
                ``(5) Religious conscience exemption.--
                        ``(A) In general.--Subsection (a) shall not apply
                    to any individual (and any qualifying child residing
                    with such individual) for any period if such individual
                    has in effect an exemption which certifies that such
                    individual is a member of a recognized religious sect
                    or division thereof described in section 1402(g)(1) and
                    an adherent of established tenets or teachings of such
                    sect or division as described in such section.
                        ``(B) Exemption.--An application for the exemption
                    described in subparagraph (A) shall be filed with the
                    Secretary at such time and in such form and manner as
                    the Secretary may prescribe. Any such exemption granted
                    by the Secretary shall be effective for such period as
                    the Secretary determines appropriate.
        ``(d) Acceptable Coverage Requirement.--
                ``(1) In general.--The requirements of this subsection are
            met with respect to any individual for any period if such
            individual (and each qualifying child of such individual) is
            covered by acceptable coverage at all times during such period.
                ``(2) Acceptable coverage.--For purposes of this section,
            the term `acceptable coverage' means any of the following:
                        ``(A) Qualified health benefits plan coverage.--
                    Coverage under a qualified health benefits plan (as
                    defined in section 100(c) of the America's Affordable
                    Health Choices Act of 2009).
                        ``(B) Grandfathered health insurance coverage;
                    coverage under grandfathered employment-based health
                    plan.--Coverage under a grandfathered health insurance
                    coverage (as defined in subsection (a) of section 102
                    of the America's Affordable Health Choices Act of 2009)
                    or under a current employment-based health plan (within
                    the meaning of subsection (b) of such section).
                        ``(C) Medicare.--Coverage under part A of title
                    XVIII of the Social Security Act.
                        ``(D) Medicaid.--Coverage for medical assistance
                    under title XIX of the Social Security Act.
                        ``(E) Members of the armed forces and dependents
                    (including tricare).--Coverage under chapter 55 of
                    title 10, United States Code, including similar
                    coverage furnished under section 1781 of title 38 of
                    such Code.
                        ``(F) VA.--Coverage under the veteran's health care
                    program under chapter 17 of title 38, United States
                    Code, but only if the coverage for the individual
                    involved is determined by the Secretary in coordination
                    with the Health Choices Commissioner to be not less
                    than the level specified by the Secretary of the
                    Treasury, in coordination with the Secretary of
                    Veteran's Affairs and the Health Choices Commissioner,
                    based on the individual's priority for services as
                    provided under section 1705(a) of such title.
                        ``(G) Other coverage.--Such other health benefits
                    coverage as the Secretary, in coordination with the
                    Health Choices Commissioner, recognizes for purposes of
                    this subsection.
        ``(e) Other Definitions and Special Rules.--
                ``(1) Qualifying child.--For purposes of this section, the
            term `qualifying child' has the meaning given such term by
            section 152(c). With respect to any period during which health
            coverage for a child must be provided by an individual pursuant
            to a child support order, such child shall be treated as a
            qualifying child of such individual (and not as a qualifying
            child of any other individual).
                ``(2) Basic plan.--For purposes of this section, the term
            `basic plan' has the meaning given such term under section
            100(c) of the America's Affordable Health Choices Act of 2009.
                ``(3) Health insurance exchange.--For purposes of this
            section, the term `Health Insurance Exchange' has the meaning
            given such term under section 100(c) of the America's
            Affordable Health Choices Act of 2009, including any State-
            based health insurance exchange approved for operation under
            section 208 of such Act.
                ``(4) Family coverage.--For purposes of this section, the
            term `family coverage' means any coverage other than self-only
            coverage.
                ``(5) Modified adjusted gross income.--For purposes of this
            section, the term `modified adjusted gross income' means
            adjusted gross income--
                        ``(A) determined without regard to section 911, and
                        ``(B) increased by the amount of interest received
                    or accrued by the taxpayer during the taxable year
                    which is exempt from tax.
                ``(6) Not treated as tax imposed by this chapter for
            certain purposes.--The tax imposed under this section shall not
            be treated as tax imposed by this chapter for purposes of
            determining the amount of any credit under this chapter or for
            purposes of section 55.
        ``(f) Regulations.--The Secretary shall prescribe such regulations
    or other guidance as may be necessary or appropriate to carry out the
    purposes of this section, including regulations or other guidance
    (developed in coordination with the Health Choices Commissioner) which
    provide--
                ``(1) exemption from the tax imposed under subsection (a)
            in cases of de minimis lapses of acceptable coverage, and
                ``(2) a process for applying for a waiver of the
            application of subsection (a) in cases of hardship.''.
        (b) Information Reporting.--
                (1) In general.--Subpart B of part III of subchapter A of
            chapter 61 of such Code is amended by inserting after section
            6050W the following new section:

    ``SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.

        ``(a) Requirement of Reporting.--Every person who provides
    acceptable coverage (as defined in section 59B(d)) to any individual
    during any calendar year shall, at such time as the Secretary may
    prescribe, make the return described in subsection (b) with respect to
    such individual.
        ``(b) Form and Manner of Returns.--A return is described in this
    subsection if such return--
                ``(1) is in such form as the Secretary may prescribe, and
                ``(2) contains--
                        ``(A) the name, address, and TIN of the primary
                    insured and the name of each other individual obtaining
                    coverage under the policy,
                        ``(B) the period for which each such individual was
                    provided with the coverage referred to in subsection
                    (a), and
                        ``(C) such other information as the Secretary may
                    require.
        ``(c) Statements to Be Furnished to Individuals With Respect to
    Whom Information Is Required.--Every person required to make a return
    under subsection (a) shall furnish to each primary insured whose name
    is required to be set forth in such return a written statement
    showing--
                ``(1) the name and address of the person required to make
            such return and the phone number of the information contact for
            such person, and
                ``(2) the information required to be shown on the return
            with respect to such individual.
    The written statement required under the preceding sentence shall be
    furnished on or before January 31 of the year following the calendar
    year for which the return under subsection (a) is required to be made.
        ``(d) Coverage Provided by Governmental Units.--In the case of
    coverage provided by any governmental unit or any agency or
    instrumentality thereof, the officer or employee who enters into the
    agreement to provide such coverage (or the person appropriately
    designated for purposes of this section) shall make the returns and
    statements required by this section.''.
                (2) Penalty for failure to file.--
                        (A) Return.--Subparagraph (B) of section 6724(d)(1)
                    of such Code is amended by striking ``or'' at the end
                    of clause (xxii), by striking ``and'' at the end of
                    clause (xxiii) and inserting ``or'', and by adding at
                    the end the following new clause:
                                ``(xxiv) section 6050X (relating to returns
                            relating to health insurance coverage), and''.
                        (B) Statement.--Paragraph (2) of section 6724(d) of
                    such Code is amended by striking ``or'' at the end of
                    subparagraph (EE), by striking the period at the end of
                    subparagraph (FF) and inserting ``, or'', and by
                    inserting after subparagraph (FF) the following new
                    subparagraph:
                        ``(GG) section 6050X (relating to returns relating
                    to health insurance coverage).''.
        (c) Return Requirement.--Subsection (a) of section 6012 of such
    Code is amended by inserting after paragraph (9) the following new
    paragraph:
                ``(10) Every individual to whom section 59B(a) applies and
            who fails to meet the requirements of section 59B(d) with
            respect to such individual or any qualifying child (as defined
            in section 152(c)) of such individual.''.
        (d) Clerical Amendments.--
                (1) The table of parts for subchapter A of chapter 1 of the
            Internal Revenue Code of 1986 is amended by adding at the end
            the following new item:

                   ``Part VIII. Health Care Related Taxes.''.

                (2) The table of sections for subpart B of part III of
            subchapter A of chapter 61 is amended by adding at the end the
            following new item:

    ``Sec. 6050X. Returns relating to health insurance coverage.''.
        (e) Section 15 Not to Apply.--The amendment made by subsection (a)
    shall not be treated as a change in a rate of tax for purposes of
    section 15 of the Internal Revenue Code of 1986.
        (f) Effective Date.--
                (1) In general.--The amendments made by this section shall
            apply to taxable years beginning after December 31, 2012.
                (2) Returns.--The amendments made by subsection (b) shall
            apply to calendar years beginning after December 31, 2012.

                        PART 2--EMPLOYER RESPONSIBILITY

    SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

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

    ``SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

        ``(a) Election of Employer Responsibility to Provide Health
    Coverage.--
                ``(1) In general.--Subsection (b) shall apply to any
            employer with respect to whom an election under paragraph (2)
            is in effect.
                ``(2) Time and manner.--An employer may make an election
            under this paragraph at such time and in such form and manner
            as the Secretary may prescribe.
                ``(3) Affiliated groups.--In the case of any employer which
            is part of a group of employers who are treated as a single
            employer under subsection (b), (c), (m), or (o) of section 414,
            the election under paragraph (2) shall be made by such person
            as the Secretary may provide. Any such election, once made,
            shall apply to all members of such group.
                ``(4) Separate elections.--Under regulations prescribed by
            the Secretary, separate elections may be made under paragraph
            (2) with respect to--
                        ``(A) separate lines of business, and
                        ``(B) full-time employees and employees who are not
                    full-time employees.
                ``(5) Termination of election in cases of substantial
            noncompliance.--The Secretary may terminate the election of any
            employer under paragraph (2) if the Secretary (in coordination
            with the Health Choices Commissioner) determines that such
            employer is in substantial noncompliance with the health
            coverage participation requirements.
        ``(b) Excise Tax With Respect to Failure to Meet Health Coverage
    Participation Requirements.--
                ``(1) In general.--In the case of any employer who fails
            (during any period with respect to which the election under
            subsection (a) is in effect) to satisfy the health coverage
            participation requirements with respect to any employee to whom
            such election applies, there is hereby imposed on each such
            failure with respect to each such employee a tax of $100 for
            each day in the period beginning on the date such failure first
            occurs and ending on the date such failure is corrected.
                ``(2) Limitations on amount of tax.--
                        ``(A) Tax not to apply where failure not discovered
                    exercising reasonable diligence.--No tax shall be
                    imposed by paragraph (1) on any failure during any
                    period for which it is established to the satisfaction
                    of the Secretary that the employer neither knew, nor
                    exercising reasonable diligence would have known, that
                    such failure existed.
                        ``(B) Tax not to apply to failures corrected within
                    30 days.--No tax shall be imposed by paragraph (1) on
                    any failure if--
                                ``(i) such failure was due to reasonable
                            cause and not to willful neglect, and
                                ``(ii) such failure is corrected during the
                            30-day period beginning on the 1st date that
                            the employer knew, or exercising reasonable
                            diligence would have known, that such failure
                            existed.
                        ``(C) Overall limitation for unintentional
                    failures.--In the case of failures which are due to
                    reasonable cause and not to willful neglect, the tax
                    imposed by subsection (a) for failures during the
                    taxable year of the employer shall not exceed the
                    amount equal to the lesser of--
                                ``(i) 10 percent of the aggregate amount
                            paid or incurred by the employer (or
                            predecessor employer) during the preceding
                            taxable year for employment-based health plans,
                            or
                                ``(ii) $500,000.
                        ``(D) Coordination with other enforcement
                    provisions.--The tax imposed under paragraph (1) with
                    respect to any failure shall be reduced (but not below
                    zero) by the amount of any civil penalty collected
                    under section 502(c)(11) of the Employee Retirement
                    Income Security Act of 1974 or section 2793(g) of the
                    Public Health Service Act with respect to such failure.
        ``(c) Health Coverage Participation Requirements.--For purposes of
    this section, the term `health coverage participation requirements'
    means the requirements of part I of subtitle B of title III of the
    America's Affordable Health Choices Act of 2009 (as in effect on the
    date of the enactment of this section).''.
        (b) Clerical Amendment.--The table of sections for chapter 43 of
    such Code is amended by adding at the end the following new item:

    ``Sec. 4980H. Election with respect to health coverage participation
                                requirements.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.

        (a) In General.--Section 3111 of the Internal Revenue Code of 1986
    is amended by redesignating subsection (c) as subsection (d) and by
    inserting after subsection (b) the following new subsection:
        ``(c) Employers Electing to Not Provide Health Benefits.--
                ``(1) In general.--In addition to other taxes, there is
            hereby imposed on every nonelecting employer an excise tax,
            with respect to having individuals in his employ, equal to 8
            percent of the wages (as defined in section 3121(a)) paid by
            him with respect to employment (as defined in section 3121(b)).
                ``(2) Special rules for small employers.--
                        ``(A) In general.--In the case of any employer who
                    is small employer for any calendar year, paragraph (1)
                    shall be applied by substituting the applicable
                    percentage determined in accordance with the following
                    table for `8 percent':

    ``If the annual payroll of such          The applicable percentage is:
     employer for the preceding calendar
     year:
      Does not exceed $250,000.............  0 percent
      Exceeds $250,000, but does not exceed  2 percent
       $300,000.
      Exceeds $300,000, but does not exceed  4 percent
       $350,000.
      Exceeds $350,000, but does not exceed  6 percent
       $400,000.

                        ``(B) Small employer.--For purposes of this
                    paragraph, the term `small employer' means any employer
                    for any calendar year if the annual payroll of such
                    employer for the preceding calendar year does not
                    exceed $400,000.
                        ``(C) Annual payroll.--For purposes of this
                    paragraph, the term `annual payroll' means, with
                    respect to any employer for any calendar year, the
                    aggregate wages (as defined in section 3121(a)) paid by
                    him with respect to employment (as defined in section
                    3121(b)) during such calendar year.
                ``(3) Nonelecting employer.--For purposes of paragraph (1),
            the term `nonelecting employer' means any employer for any
            period with respect to which such employer does not have an
            election under section 4980H(a) in effect.
                ``(4) Special rule for separate elections.--In the case of
            an employer who makes a separate election described in section
            4980H(a)(4) for any period, paragraph (1) shall be applied for
            such period by taking into account only the wages paid to
            employees who are not subject to such election.
                ``(5) Aggregation; predecessors.--For purposes of this
            subsection--
                        ``(A) all persons treated as a single employer
                    under subsection (b), (c), (m), or (o) of section 414
                    shall be treated as 1 employer, and
                        ``(B) any reference to any person shall be treated
                    as including a reference to any predecessor of such
                    person.''.
        (b) Definitions.--Section 3121 of such Code is amended by adding at
    the end the following new subsection:
        ``(aa) Special Rules for Tax on Employers Electing Not to Provide
    Health Benefits.--For purposes of section 3111(c)--
                ``(1) Paragraphs (1), (5), and (19) of subsection (b) shall
            not apply.
                ``(2) Paragraph (7) of subsection (b) shall apply by
            treating all services as not covered by the retirement systems
            referred to in subparagraphs (C) and (F) thereof.
                ``(3) Subsection (e) shall not apply and the term `State'
            shall include the District of Columbia.''.
        (c) Conforming Amendment.--Subsection (d) of section 3111 of such
    Code, as redesignated by this section, is amended by striking ``this
    section'' and inserting ``subsections (a) and (b)''.
        (d) Application to Railroads.--
                (1) In general.--Section 3221 of such Code is amended by
            redesignating subsection (c) as subsection (d) and by inserting
            after subsection (b) the following new subsection:
        ``(c) Employers Electing to Not Provide Health Benefits.--
                ``(1) In general.--In addition to other taxes, there is
            hereby imposed on every nonelecting employer an excise tax,
            with respect to having individuals in his employ, equal to 8
            percent of the compensation paid during any calendar year by
            such employer for services rendered to such employer.
                ``(2) Exception for small employers.--Rules similar to the
            rules of section 3111(c)(2) shall apply for purposes of this
            subsection.
                ``(3) Nonelecting employer.--For purposes of paragraph (1),
            the term `nonelecting employer' means any employer for any
            period with respect to which such employer does not have an
            election under section 4980H(a) in effect.
                ``(4) Special rule for separate elections.--In the case of
            an employer who makes a separate election described in section
            4980H(a)(4) for any period, subsection (a) shall be applied for
            such period by taking into account only the wages paid to
            employees who are not subject to such election.''.
                (2) Definitions.--Subsection (e) of section 3231 of such
            Code is amended by adding at the end the following new
            paragraph:
                ``(13) Special rules for tax on employers electing not to
            provide health benefits.--For purposes of section 3221(c)--
                        ``(A) Paragraph (1) shall be applied without regard
                    to the third sentence thereof.
                        ``(B) Paragraph (2) shall not apply.''.
                (3) Conforming amendment.--Subsection (d) of section 3221
            of such Code, as redesignated by this section, is amended by
            striking ``subsections (a) and (b), see section 3231(e)(2)''
            and inserting ``this section, see paragraphs (2) and (13)(B) of
            section 3231(e)''.
        (e) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    Subtitle B--Credit for Small Business Employee Health Coverage Expenses

    SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.

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

    ``SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.

        ``(a) In General.--For purposes of section 38, in the case of a
    qualified small employer, the small business employee health coverage
    credit determined under this section for the taxable year is an amount
    equal to the applicable percentage of the qualified employee health
    coverage expenses of such employer for such taxable year.
        ``(b) Applicable Percentage.--
                ``(1) In general.--For purposes of this section, the
            applicable percentage is 50 percent.
                ``(2) Phaseout based on average compensation of
            employees.--In the case of an employer whose average annual
            employee compensation for the taxable year exceeds $20,000, the
            percentage specified in paragraph (1) shall be reduced by a
            number of percentage points which bears the same ratio to 50 as
            such excess bears to $20,000.
        ``(c) Limitations.--
                ``(1) Phaseout based on employer size.--In the case of an
            employer who employs more than 10 qualified employees during
            the taxable year, the credit determined under subsection (a)
            shall be reduced by an amount which bears the same ratio to the
            amount of such credit (determined without regard to this
            paragraph and after the application of the other provisions of
            this section) as--
                        ``(A) the excess of--
                                ``(i) the number of qualified employees
                            employed by the employer during the taxable
                            year, over
                                ``(ii) 10, bears to
                        ``(B) 15.
                ``(2) Credit not allowed with respect to certain highly
            compensated employees.--No credit shall be allowed under
            subsection (a) with respect to qualified employee health
            coverage expenses paid or incurred with respect to any employee
            for any taxable year if the aggregate compensation paid by the
            employer to such employee during such taxable year exceeds
            $80,000.
        ``(d) Qualified Employee Health Coverage Expenses.--For purposes of
    this section--
                ``(1) In general.--The term `qualified employee health
            coverage expenses' means, with respect to any employer for any
            taxable year, the aggregate amount paid or incurred by such
            employer during such taxable year for coverage of any qualified
            employee of the employer (including any family coverage which
            covers such employee) under qualified health coverage.
                ``(2) Qualified health coverage.--The term `qualified
            health coverage' means acceptable coverage (as defined in
            section 59B(d)) which--
                        ``(A) is provided pursuant to an election under
                    section 4980H(a), and
                        ``(B) satisfies the requirements referred to in
                    section 4980H(c).
        ``(e) Other Definitions.--For purposes of this section--
                ``(1) Qualified small employer.--For purposes of this
            section, the term `qualified small employer' means any employer
            for any taxable year if--
                        ``(A) the number of qualified employees employed by
                    such employer during the taxable year does not exceed
                    25, and
                        ``(B) the average annual employee compensation of
                    such employer for such taxable year does not exceed the
                    sum of the dollar amounts in effect under subsection
                    (b)(2).
                ``(2) Qualified employee.--The term `qualified employee'
            means any employee of an employer for any taxable year of the
            employer if such employee received at least $5,000 of
            compensation from such employer for services performed in the
            trade or business of such employer during such taxable year.
                ``(3) Average annual employee compensation.--The term
            `average annual employee compensation' means, with respect to
            any employer for any taxable year, the average amount of
            compensation paid by such employer to qualified employees of
            such employer during such taxable year.
                ``(4) Compensation.--The term `compensation' has the
            meaning given such term in section 408(p)(6)(A).
                ``(5) Family coverage.--The term `family coverage' means
            any coverage other than self-only coverage.
        ``(f) Special Rules.--For purposes of this section--
                ``(1) Special rule for partnerships and self-employed.--In
            the case of a partnership (or a trade or business carried on by
            an individual) which has one or more qualified employees
            (determined without regard to this paragraph) with respect to
            whom the election under 4980H(a) applies, each partner (or, in
            the case of a trade or business carried on by an individual,
            such individual) shall be treated as an employee.
                ``(2) Aggregation rule.--All persons treated as a single
            employer under subsection (b), (c), (m), or (o) of section 414
            shall be treated as 1 employer.
                ``(3) Denial of double benefit.--Any deduction otherwise
            allowable with respect to amounts paid or incurred for health
            insurance coverage to which subsection (a) applies shall be
            reduced by the amount of the credit determined under this
            section.
                ``(4) Inflation adjustment.--In the case of any taxable
            year beginning after 2013, each of the dollar amounts in
            subsections (b)(2), (c)(2), and (e)(2) shall be increased by an
            amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) the cost of living adjustment determined
                    under section 1(f)(3) for the calendar year in which
                    the taxable year begins determined by substituting
                    `calendar year 2012' for `calendar year 1992' in
                    subparagraph (B) thereof.
            If any increase determined under this paragraph is not a
            multiple of $50, such increase shall be rounded to the next
            lowest multiple of $50.''.
        (b) Credit to Be Part of General Business Credit.--Subsection (b)
    of section 38 of such Code (relating to general business credit) is
    amended by striking ``plus'' at the end of paragraph (34), by striking
    the period at the end of paragraph (35) and inserting ``, plus'' , and
    by adding at the end the following new paragraph:
                ``(36) in the case of a qualified small employer (as
            defined in section 45R(e)), the small business employee health
            coverage credit determined under section 45R(a).''.
        (c) Clerical Amendment.--The table of sections for subpart D of
    part IV of subchapter A of chapter 1 of such Code is amended by
    inserting after the item relating to section 45Q the following new
    item:

    ``Sec. 45R. Small business employee health coverage credit.''.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2012.

        Subtitle C--Disclosures to Carry Out Health Insurance Exchange
                                   Subsidies

    SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

        (a) In General.--Subsection (l) of section 6103 of the Internal
    Revenue Code of 1986 is amended by adding at the end the following new
    paragraph:
                ``(21) Disclosure of return information to carry out health
            insurance exchange subsidies.--
                        ``(A) In general.--The Secretary, upon written
                    request from the Health Choices Commissioner or the
                    head of a State-based health insurance exchange
                    approved for operation under section 208 of the
                    America's Affordable Health Choices Act of 2009, shall
                    disclose to officers and employees of the Health
                    Choices Administration or such State-based health
                    insurance exchange, as the case may be, return
                    information of any taxpayer whose income is relevant in
                    determining any affordability credit described in
                    subtitle C of title II of the America's Affordable
                    Health Choices Act of 2009. Such return information
                    shall be limited to--
                                ``(i) taxpayer identity information with
                            respect to such taxpayer,
                                ``(ii) the filing status of such taxpayer,
                                ``(iii) the modified adjusted gross income
                            of such taxpayer (as defined in section
                            59B(e)(5)),
                                ``(iv) the number of dependents of the
                            taxpayer,
                                ``(v) such other information as is
                            prescribed by the Secretary by regulation as
                            might indicate whether the taxpayer is eligible
                            for such affordability credits (and the amount
                            thereof), and
                                ``(vi) the taxable year with respect to
                            which the preceding information relates or, if
                            applicable, the fact that such information is
                            not available.
                        ``(B) Restriction on use of disclosed
                    information.--Return information disclosed under
                    subparagraph (A) may be used by officers and employees
                    of the Health Choices Administration or such State-
                    based health insurance exchange, as the case may be,
                    only for the purposes of, and to the extent necessary
                    in, establishing and verifying the appropriate amount
                    of any affordability credit described in subtitle C of
                    title II of the America's Affordable Health Choices Act
                    of 2009 and providing for the repayment of any such
                    credit which was in excess of such appropriate
                    amount.''.
        (b) Procedures and Recordkeeping Related to Disclosures.--Paragraph
    (4) of section 6103(p) of such Code is amended--
                (1) by inserting ``, or any entity described in subsection
            (l)(21),'' after ``or (20)'' in the matter preceding
            subparagraph (A),
                (2) by inserting ``or any entity described in subsection
            (l)(21),'' after ``or (o)(1)(A),'' in subparagraph (F)(ii), and
                (3) by inserting ``or any entity described in subsection
            (l)(21),'' after ``or (20),'' both places it appears in the
            matter after subparagraph (F).
        (c) Unauthorized Disclosure or Inspection.--Paragraph (2) of
    section 7213(a) of such Code is amended by striking ``or (20)'' and
    inserting ``(20), or (21)''.

                      Subtitle D--Other Revenue Provisions

                           PART 1--GENERAL PROVISIONS

    SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

        (a) In General.--Part VIII of subchapter A of chapter 1 of the
    Internal Revenue Code of 1986, as added by this title, is amended by
    adding at the end the following new subpart:

               ``Subpart B--Surcharge on High Income Individuals

    ``Sec. 59C. Surcharge on high income individuals.

    ``SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

        ``(a) General Rule.--In the case of a taxpayer other than a
    corporation, there is hereby imposed (in addition to any other tax
    imposed by this subtitle) a tax equal to--
                ``(1) 1 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $350,000 but does not exceed
            $500,000,
                ``(2) 1.5 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $500,000 but does not exceed
            $1,000,000, and
                ``(3) 5.4 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $1,000,000.
        ``(b) Taxpayers Not Making a Joint Return.--In the case of any
    taxpayer other than a taxpayer making a joint return under section 6013
    or a surviving spouse (as defined in section 2(a)), subsection (a)
    shall be applied by substituting for each of the dollar amounts therein
    (after any increase determined under subsection (e)) a dollar amount
    equal to--
                ``(1) 50 percent of the dollar amount so in effect in the
            case of a married individual filing a separate return, and
                ``(2) 80 percent of the dollar amount so in effect in any
            other case.
        ``(c) Adjustments Based on Federal Health Reform Savings.--
                ``(1) In general.--Except as provided in paragraph (2), in
            the case of any taxable year beginning after December 31, 2012,
            subsection (a) shall be applied--
                        ``(A) by substituting `2 percent' for `1 percent',
                    and
                        ``(B) by substituting `3 percent' for `1.5
                    percent'.
                ``(2) Adjustments based on excess federal health reform
            savings.--
                        ``(A) Exception if federal health reform savings
                    significantly exceeds base amount.--If the excess
                    Federal health reform savings is more than
                    $150,000,000,000 but not more than $175,000,000,000,
                    paragraph (1) shall not apply.
                        ``(B) Further adjustment for additional federal
                    health reform savings.--If the excess Federal health
                    reform savings is more than $175,000,000,000,
                    paragraphs (1) and (2) of subsection (a) (and paragraph
                    (1) of this subsection) shall not apply to any taxable
                    year beginning after December 31, 2012.
                        ``(C) Excess federal health reform savings.--For
                    purposes of this subsection, the term `excess Federal
                    health reform savings' means the excess of--
                                ``(i) the Federal health reform savings,
                            over
                                ``(ii) $525,000,000,000.
                        ``(D) Federal health reform savings.--The term
                    `Federal health reform savings' means the sum of the
                    amounts described in subparagraphs (A) and (B) of
                    paragraph (3).
                ``(3) Determination of federal health reform savings.--Not
            later than December 1, 2012, the Director of the Office of
            Management and Budget shall--
                        ``(A) determine, on the basis of the study
                    conducted under paragraph (4), the aggregate reductions
                    in Federal expenditures which have been achieved as a
                    result of the provisions of, and amendments made by,
                    subdivision B of the America's Affordable Health
                    Choices Act of 2009 during the period beginning on
                    October 1, 2009, and ending with the latest date with
                    respect to which the Director has sufficient data to
                    make such determination, and
                        ``(B) estimate, on the basis of such study and the
                    determination under subparagraph (A), the aggregate
                    reductions in Federal expenditures which will be
                    achieved as a result of such provisions and amendments
                    during so much of the period beginning with fiscal year
                    2010 and ending with fiscal year 2019 as is not taken
                    into account under subparagraph (A).
                ``(4) Study of federal health reform savings.--The Director
            of the Office of Management and Budget shall conduct a study of
            the reductions in Federal expenditures during fiscal years 2010
            through 2019 which are attributable to the provisions of, and
            amendments made by, subdivision B of the America's Affordable
            Health Choices Act of 2009. The Director shall complete such
            study not later than December 1, 2012.
                ``(5) Reductions in federal expenditures determined without
            regard to program investments.--For purposes of paragraphs (3)
            and (4), reductions in Federal expenditures shall be determined
            without regard to section 1121 of the America's Affordable
            Health Choices Act of 2009 and other program investments under
            subdivision B thereof.
        ``(d) Modified Adjusted Gross Income.--For purposes of this
    section, the term `modified adjusted gross income' means adjusted gross
    income reduced by any deduction (not taken into account in determining
    adjusted gross income) allowed for investment interest (as defined in
    section 163(d)). In the case of an estate or trust, adjusted gross
    income shall be determined as provided in section 67(e).
        ``(e) Inflation Adjustments.--
                ``(1) In general.--In the case of taxable years beginning
            after 2011, the dollar amounts in subsection (a) shall be
            increased by an amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) the cost-of-living adjustment determined
                    under section 1(f)(3) for the calendar year in which
                    the taxable year begins, by substituting `calendar year
                    2010' for `calendar year 1992' in subparagraph (B)
                    thereof.
                ``(2) Rounding.--If any amount as adjusted under paragraph
            (1) is not a multiple of $5,000, such amount shall be rounded
            to the next lowest multiple of $5,000.
        ``(f) Special Rules.--
                ``(1) Nonresident alien.--In the case of a nonresident
            alien individual, only amounts taken into account in connection
            with the tax imposed under section 871(b) shall be taken into
            account under this section.
                ``(2) Citizens and residents living abroad.--The dollar
            amounts in effect under subsection (a) (after the application
            of subsections (b) and (e)) shall be decreased by the excess
            of--
                        ``(A) the amounts excluded from the taxpayer's
                    gross income under section 911, over
                        ``(B) the amounts of any deductions or exclusions
                    disallowed under section 911(d)(6) with respect to the
                    amounts described in subparagraph (A).
                ``(3) Charitable trusts.--Subsection (a) shall not apply to
            a trust all the unexpired interests in which are devoted to one
            or more of the purposes described in section 170(c)(2)(B).
                ``(4) Not treated as tax imposed by this chapter for
            certain purposes.--The tax imposed under this section shall not
            be treated as tax imposed by this chapter for purposes of
            determining the amount of any credit under this chapter or for
            purposes of section 55.''.
        (b) Clerical Amendment.--The table of subparts for part VIII of
    subchapter A of chapter 1 of such Code, as added by this title, is
    amended by inserting after the item relating to subpart A the following
    new item:

             ``subpart b. surcharge on high income individuals.''.

        (c) Section 15 Not to Apply.--The amendment made by subsection (a)
    shall not be treated as a change in a rate of tax for purposes of
    section 15 of the Internal Revenue Code of 1986.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2010.

    SEC. 442. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED
                  DRUG OR INSULIN.

        (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal
    Revenue Code of 1986 is amended by adding at the end the following:
    ``Such term shall include an amount paid for medicine or a drug only if
    such medicine or drug is a prescribed drug or is insulin.''.
        (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such
    Code is amended by adding at the end the following: ``Such term shall
    include an amount paid for medicine or a drug only if such medicine or
    drug is a prescribed drug or is insulin.''.
        (c) Health Flexible Spending Arrangements and Health Reimbursement
    Arrangements.--Section 106 of such Code is amended by adding at the end
    the following new subsection:
        ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs
    and Insulin.--For purposes of this section and section 105,
    reimbursement for expenses incurred for a medicine or a drug shall be
    treated as a reimbursement for medical expenses only if such medicine
    or drug is a prescribed drug or is insulin.''.
        (d) Effective Dates.--The amendment made by this section shall
    apply to expenses incurred after December 31, 2009.

    SEC. 443. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

        (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) of the
    Internal Revenue Code of 1986 are each amended by striking ``December
    31, 2010'' and inserting ``December 31, 2019''.
        (b) Transition.--Subsection (f) of section 864 of such Code is
    amended by striking paragraph (7).

                      PART 2--PREVENTION OF TAX AVOIDANCE

    SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE
                  PAYMENTS.

        (a) In General.--Section 894 of the Internal Revenue Code of 1986
    (relating to income affected by treaty) is amended by adding at the end
    the following new subsection:
        ``(d) Limitation on Treaty Benefits for Certain Deductible
    Payments.--
                ``(1) In general.--In the case of any deductible related-
            party payment, any withholding tax imposed under chapter 3 (and
            any tax imposed under subpart A or B of this part) with respect
            to such payment may not be reduced under any treaty of the
            United States unless any such withholding tax would be reduced
            under a treaty of the United States if such payment were made
            directly to the foreign parent corporation.
                ``(2) Deductible related-party payment.--For purposes of
            this subsection, the term `deductible related-party payment'
            means any payment made, directly or indirectly, by any person
            to any other person if the payment is allowable as a deduction
            under this chapter and both persons are members of the same
            foreign controlled group of entities.
                ``(3) Foreign controlled group of entities.--For purposes
            of this subsection--
                        ``(A) In general.--The term `foreign controlled
                    group of entities' means a controlled group of entities
                    the common parent of which is a foreign corporation.
                        ``(B) Controlled group of entities.--The term
                    `controlled group of entities' means a controlled group
                    of corporations as defined in section 1563(a)(1),
                    except that--
                                ``(i) `more than 50 percent' shall be
                            substituted for `at least 80 percent' each
                            place it appears therein, and
                                ``(ii) the determination shall be made
                            without regard to subsections (a)(4) and (b)(2)
                            of section 1563.
                    A partnership or any other entity (other than a
                    corporation) shall be treated as a member of a
                    controlled group of entities if such entity is
                    controlled (within the meaning of section 954(d)(3)) by
                    members of such group (including any entity treated as
                    a member of such group by reason of this sentence).
                ``(4) Foreign parent corporation.--For purposes of this
            subsection, the term `foreign parent corporation' means, with
            respect to any deductible related-party payment, the common
            parent of the foreign controlled group of entities referred to
            in paragraph (3)(A).
                ``(5) Regulations.--The Secretary may prescribe such
            regulations or other guidance as are necessary or appropriate
            to carry out the purposes of this subsection, including
            regulations or other guidance which provide for--
                        ``(A) the treatment of two or more persons as
                    members of a foreign controlled group of entities if
                    such persons would be the common parent of such group
                    if treated as one corporation, and
                        ``(B) the treatment of any member of a foreign
                    controlled group of entities as the common parent of
                    such group if such treatment is appropriate taking into
                    account the economic relationships among such
                    entities.''.
        (b) Effective Date.--The amendment made by this section shall apply
    to payments made after the date of the enactment of this Act.

    SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

        (a) In General.--Section 7701 of the Internal Revenue Code of 1986
    is amended by redesignating subsection (o) as subsection (p) and by
    inserting after subsection (n) the following new subsection:
        ``(o) Clarification of Economic Substance Doctrine.--
                ``(1) Application of doctrine.--In the case of any
            transaction to which the economic substance doctrine is
            relevant, such transaction shall be treated as having economic
            substance only if--
                        ``(A) the transaction changes in a meaningful way
                    (apart from Federal income tax effects) the taxpayer's
                    economic position, and
                        ``(B) the taxpayer has a substantial purpose (apart
                    from Federal income tax effects) for entering into such
                    transaction.
                ``(2) Special rule where taxpayer relies on profit
            potential.--
                        ``(A) In general.--The potential for profit of a
                    transaction shall be taken into account in determining
                    whether the requirements of subparagraphs (A) and (B)
                    of paragraph (1) are met with respect to the
                    transaction only if the present value of the reasonably
                    expected pre-tax profit from the transaction is
                    substantial in relation to the present value of the
                    expected net tax benefits that would be allowed if the
                    transaction were respected.
                        ``(B) Treatment of fees and foreign taxes.--Fees
                    and other transaction expenses and foreign taxes shall
                    be taken into account as expenses in determining pre-
                    tax profit under subparagraph (A).
                ``(3) State and local tax benefits.--For purposes of
            paragraph (1), any State or local income tax effect which is
            related to a Federal income tax effect shall be treated in the
            same manner as a Federal income tax effect.
                ``(4) Financial accounting benefits.--For purposes of
            paragraph (1)(B), achieving a financial accounting benefit
            shall not be taken into account as a purpose for entering into
            a transaction if the origin of such financial accounting
            benefit is a reduction of Federal income tax.
                ``(5) Definitions and special rules.--For purposes of this
            subsection--
                        ``(A) Economic substance doctrine.--The term
                    `economic substance doctrine' means the common law
                    doctrine under which tax benefits under subtitle A with
                    respect to a transaction are not allowable if the
                    transaction does not have economic substance or lacks a
                    business purpose.
                        ``(B) Exception for personal transactions of
                    individuals.--In the case of an individual, paragraph
                    (1) shall apply only to transactions entered into in
                    connection with a trade or business or an activity
                    engaged in for the production of income.
                        ``(C) Other common law doctrines not affected.--
                    Except as specifically provided in this subsection, the
                    provisions of this subsection shall not be construed as
                    altering or supplanting any other rule of law, and the
                    requirements of this subsection shall be construed as
                    being in addition to any such other rule of law.
                        ``(D) Determination of application of doctrine not
                    affected.--The determination of whether the economic
                    substance doctrine is relevant to a transaction (or
                    series of transactions) shall be made in the same
                    manner as if this subsection had never been enacted.
                ``(6) Regulations.--The Secretary shall prescribe such
            regulations as may be necessary or appropriate to carry out the
            purposes of this subsection.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to transactions entered into after the date of the enactment of
    this Act.

    SEC. 453. PENALTIES FOR UNDERPAYMENTS.

        (a) Penalty for Underpayments Attributable to Transactions Lacking
    Economic Substance.--
                (1) In general.--Subsection (b) of section 6662 of the
            Internal Revenue Code of 1986 is amended by inserting after
            paragraph (5) the following new paragraph:
                ``(6) Any disallowance of claimed tax benefits by reason of
            a transaction lacking economic substance (within the meaning of
            section 7701(o)) or failing to meet the requirements of any
            similar rule of law.''.
                (2) Increased penalty for nondisclosed transactions.--
            Section 6662 of such Code is amended by adding at the end the
            following new subsection:
        ``(i) Increase in Penalty in Case of Nondisclosed Noneconomic
    Substance Transactions.--
                ``(1) In general.--In the case of any portion of an
            underpayment which is attributable to one or more nondisclosed
            noneconomic substance transactions, subsection (a) shall be
            applied with respect to such portion by substituting `40
            percent' for `20 percent'.
                ``(2) Nondisclosed noneconomic substance transactions.--For
            purposes of this subsection, the term `nondisclosed noneconomic
            substance transaction' means any portion of a transaction
            described in subsection (b)(6) with respect to which the
            relevant facts affecting the tax treatment are not adequately
            disclosed in the return nor in a statement attached to the
            return.
                ``(3) Special rule for amended returns.--Except as provided
            in regulations, in no event shall any amendment or supplement
            to a return of tax be taken into account for purposes of this
            subsection if the amendment or supplement is filed after the
            earlier of the date the taxpayer is first contacted by the
            Secretary regarding the examination of the return or such other
            date as is specified by the Secretary.''.
                (3) Conforming amendment.--Subparagraph (B) of section
            6662A(e)(2) of such Code is amended--
                        (A) by striking ``section 6662(h)'' and inserting
                    ``subsections (h) or (i) of section 6662'', and
                        (B) by striking ``gross valuation misstatement
                    penalty'' in the heading and inserting ``certain
                    increased underpayment penalties''.
        (b) Reasonable Cause Exception Not Applicable to Noneconomic
    Substance Transactions, Tax Shelters, and Certain Large or Publicly
    Traded Persons.--Subsection (c) of section 6664 of such Code is
    amended--
                (1) by redesignating paragraphs (2) and (3) as paragraphs
            (3) and (4), respectively,
                (2) by striking ``paragraph (2)'' in paragraph (4)(A), as
            so redesignated, and inserting ``paragraph (3)'', and
                (3) by inserting after paragraph (1) the following new
            paragraph:
                ``(2) Exception.--Paragraph (1) shall not apply to--
                        ``(A) to any portion of an underpayment which is
                    attributable to one or more tax shelters (as defined in
                    section 6662(d)(2)(C)) or transactions described in
                    section 6662(b)(6), and
                        ``(B) to any taxpayer if such taxpayer is a
                    specified person (as defined in section
                    6662(d)(2)(D)(ii)).''.
        (c) Application of Penalty for Erroneous Claim for Refund or Credit
    to Noneconomic Substance Transactions.--Section 6676 of such Code is
    amended by redesignating subsection (c) as subsection (d) and inserting
    after subsection (b) the following new subsection:
        ``(c) Noneconomic Substance Transactions Treated as Lacking
    Reasonable Basis.--For purposes of this section, any excessive amount
    which is attributable to any transaction described in section
    6662(b)(6) shall not be treated as having a reasonable basis.''.
        (d) Special Understatement Reduction Rule for Certain Large or
    Publicly Traded Persons.--
                (1) In general.--Paragraph (2) of section 6662(d) of such
            Code is amended by adding at the end the following new
            subparagraph:
                        ``(D) Special reduction rule for certain large or
                    publicly traded persons.--
                                ``(i) In general.--In the case of any
                            specified person--
                                        ``(I) subparagraph (B) shall not
                                    apply, and
                                        ``(II) the amount of the
                                    understatement under subparagraph (A)
                                    shall be reduced by that portion of the
                                    understatement which is attributable to
                                    any item with respect to which the
                                    taxpayer has a reasonable belief that
                                    the tax treatment of such item by the
                                    taxpayer is more likely than not the
                                    proper tax treatment of such item.
                                ``(ii) Specified person.--For purposes of
                            this subparagraph, the term `specified person'
                            means--
                                        ``(I) any person required to file
                                    periodic or other reports under section
                                    13 of the Securities Exchange Act of
                                    1934, and
                                        ``(II) any corporation with gross
                                    receipts in excess of $100,000,000 for
                                    the taxable year involved.
                            All persons treated as a single employer under
                            section 52(a) shall be treated as one person
                            for purposes of subclause (II).''.
                (2) Conforming amendment.--Subparagraph (C) of section
            6662(d)(2) of such Code is amended by striking ``Subparagraph
            (B)'' and inserting ``Subparagraphs (B) and (D)(i)(II)''.
        (e) Effective Date.--The amendments made by this section shall
    apply to transactions entered into after the date of the enactment of
    this Act.

                       PART 3--PARITY IN HEALTH BENEFITS

    SEC. 461. CERTAIN HEALTH RELATED BENEFITS APPLICABLE TO SPOUSES AND
                  DEPENDENTS EXTENDED TO ELIGIBLE BENEFICIARIES.

        (a) Application of Accident and Health Plans to Eligible
    Beneficiaries.--
                (1) Exclusion of contributions.--Section 106 of the
            Internal Revenue Code of 1986, as amended by section 442,
            (relating to contributions by employer to accident and health
            plans) is amended by adding at the end the following new
            subsection:
        ``(g) Coverage Provided for Eligible Beneficiaries of Employees.--
                ``(1) In general.--Subsection (a) shall apply with respect
            to any eligible beneficiary of the employee.
                ``(2) Eligible beneficiary.--For purposes of this
            subsection, the term `eligible beneficiary' means any
            individual who is eligible to receive benefits or coverage
            under an accident or health plan.''.
                (2) Exclusion of amounts expended for medical care.--The
            first sentence of section 105(b) of such Code (relating to
            amounts expended for medical care) is amended--
                        (A) by striking ``and his dependents'' and
                    inserting ``his dependents'', and
                        (B) by inserting before the period the following:
                    ``and any eligible beneficiary (within the meaning of
                    section 106(f)) with respect to the taxpayer''.
                (3) Payroll taxes.--
                        (A) Section 3121(a)(2) of such Code is amended--
                                (i) by striking ``or any of his
                            dependents'' in the matter preceding
                            subparagraph (A) and inserting ``, any of his
                            dependents, or any eligible beneficiary (within
                            the meaning of section 106(g)) with respect to
                            the employee'',
                                (ii) by striking ``or any of his
                            dependents,'' in subparagraph (A) and inserting
                            ``, any of his dependents, or any eligible
                            beneficiary (within the meaning of section
                            106(g)) with respect to the employee,'', and
                                (iii) by striking ``and their dependents''
                            both places it appears and inserting ``and such
                            employees' dependents and eligible
                            beneficiaries (within the meaning of section
                            106(g))''.
                        (B) Section 3231(e)(1) of such Code is amended--
                                (i) by striking ``or any of his
                            dependents'' and inserting ``, any of his
                            dependents, or any eligible beneficiary (within
                            the meaning of section 106(g)) with respect to
                            the employee,'', and
                                (ii) by striking ``and their dependents''
                            both places it appears and inserting ``and such
                            employees' dependents and eligible
                            beneficiaries (within the meaning of section
                            106(g))''.
                        (C) Section 3306(b)(2) of such Code is amended--
                                (i) by striking ``or any of his
                            dependents'' in the matter preceding
                            subparagraph (A) and inserting ``, any of his
                            dependents, or any eligible beneficiary (within
                            the meaning of section 106(g)) with respect to
                            the employee,'',
                                (ii) by striking ``or any of his
                            dependents'' in subparagraph (A) and inserting
                            ``, any of his dependents, or any eligible
                            beneficiary (within the meaning of section
                            106(g)) with respect to the employee'', and
                                (iii) by striking ``and their dependents''
                            both places it appears and inserting ``and such
                            employees' dependents and eligible
                            beneficiaries (within the meaning of section
                            106(g))''.
                        (D) Section 3401(a) of such Code is amended by
                    striking ``or'' at the end of paragraph (22), by
                    striking the period at the end of paragraph (23) and
                    inserting ``; or'', and by inserting after paragraph
                    (23) the following new paragraph:
                ``(24) for any payment made to or for the benefit of an
            employee or any eligible beneficiary (within the meaning of
            section 106(g)) if at the time of such payment it is reasonable
            to believe that the employee will be able to exclude such
            payment from income under section 106 or under section 105 by
            reference in section 105(b) to section 106(g).''.
        (b) Expansion of Dependency for Purposes of Deduction for Health
    Insurance Costs of Self-employed Individuals.--
                (1) In general.--Paragraph (1) of section 162(l) of the
            Internal Revenue Code of 1986 (relating to special rules for
            health insurance costs of self-employed individuals) is amended
            to read as follows:
                ``(1) Allowance of deduction.--In the case of a taxpayer
            who is an employee within the meaning of section 401(c)(1),
            there shall be allowed as a deduction under this section an
            amount equal to the amount paid during the taxable year for
            insurance which constitutes medical care for--
                        ``(A) the taxpayer,
                        ``(B) the taxpayer's spouse,
                        ``(C) the taxpayer's dependents, and
                        ``(D) any individual who--
                                ``(i) satisfies the age requirements of
                            section 152(c)(3)(A),
                                ``(ii) bears a relationship to the taxpayer
                            described in section 152(d)(2)(H), and
                                ``(iii) meets the requirements of section
                            152(d)(1)(C), and
                        ``(E) one individual who--
                                ``(i) does not satisfy the age requirements
                            of section 152(c)(3)(A),
                                ``(ii) bears a relationship to the taxpayer
                            described in section 152(d)(2)(H),
                                ``(iii) meets the requirements of section
                            152(d)(1)(D), and
                                ``(iv) is not the spouse of the taxpayer
                            and does not bear any relationship to the
                            taxpayer described in subparagraphs (A) through
                            (G) of section 152(d)(2).''.
                (2) Conforming amendment.--Subparagraph (B) of section
            162(l)(2) of such Code is amended by inserting ``, any
            dependent, or individual described in subparagraph (D) or (E)
            of paragraph (1) with respect to'' after ``spouse''.
        (c) Extension to Eligible Beneficiaries of Sick and Accident
    Benefits Provided to Members of a Voluntary Employees' Beneficiary
    Association and Their Dependents.--Section 501(c)(9) of the Internal
    Revenue Code of 1986 (relating to list of exempt organizations) is
    amended by adding at the end the following new sentence: ``For purposes
    of providing for the payment of sick and accident benefits to members
    of such an association and their dependents, the term `dependents'
    shall include any individual who is an eligible beneficiary (within the
    meaning of section 106(f)), as determined under the terms of a medical
    benefit, health insurance, or other program under which members and
    their dependents are entitled to sick and accident benefits.''.
        (d) Flexible Spending Arrangements and Health Reimbursement
    Arrangements.--The Secretary of Treasury shall issue guidance of
    general applicability providing that medical expenses that otherwise
    qualify--
                (1) for reimbursement from a flexible spending arrangement
            under regulations in effect on the date of the enactment of
            this Act may be reimbursed from an employee's flexible spending
            arrangement, notwithstanding the fact that such expenses are
            attributable to any individual who is not the employee's spouse
            or dependent (within the meaning of section 105(b) of the
            Internal Revenue Code of 1986) but is an eligible beneficiary
            (within the meaning of section 106(f) of such Code) under the
            flexible spending arrangement with respect to the employee, and
                (2) for reimbursement from a health reimbursement
            arrangement under regulations in effect on the date of the
            enactment of this Act may be reimbursed from an employee's
            health reimbursement arrangement, notwithstanding the fact that
            such expenses are attributable to an individual who is not a
            spouse or dependent (within the meaning of section 105(b) of
            such Code) but is an eligible beneficiary (within the meaning
            of section 106(f) of such Code) under the health reimbursement
            arrangement with respect to the employee.
        (e) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2009.

               SUBDIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

    SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION.

        The table of contents for this subdivision is as follows:

    Sec. 1001. Table of contents of subdivision.
                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                         Part 1--Market Basket Updates

    Sec. 1101. Skilled nursing facility payment update.
    Sec. 1102. Inpatient rehabilitation facility payment update.
    Sec. 1103. Incorporating productivity improvements into market basket
                                updates that do not already incorporate
                                such improvements.
                    Part 2--Other Medicare Part A Provisions

    Sec. 1111. Payments to skilled nursing facilities.
    Sec. 1112. Medicare DSH report and payment adjustments in response to
                                coverage expansion.
    Sec. 1113. Extension of hospice regulation moratorium.
                    Subtitle B--Provisions Related to Part B

                          Part 1--Physicians' Services

    Sec. 1121. Sustainable growth rate reform.
    Sec. 1122. Misvalued codes under the physician fee schedule.
    Sec. 1123. Payments for efficient areas.
    Sec. 1124. Modifications to the Physician Quality Reporting Initiative
                                (PQRI).
    Sec. 1125. Adjustment to Medicare payment localities.
                         Part 2--Market Basket Updates

    Sec. 1131. Incorporating productivity improvements into market basket
                                updates that do not already incorporate
                                such improvements.
                            Part 3--Other Provisions

    Sec. 1141. Rental and purchase of power-driven wheelchairs.
    Sec. 1142. Extension of payment rule for brachytherapy.
    Sec. 1143. Home infusion therapy report to congress.
    Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost
                                data and other data.
    Sec. 1145. Treatment of certain cancer hospitals.
    Sec. 1146. Medicare Improvement Fund.
    Sec. 1147. Payment for imaging services.
    Sec. 1148. Durable medical equipment program improvements.
    Sec. 1149. MedPAC study and report on bone mass measurement.
            Subtitle C--Provisions Related to Medicare Parts A and B

    Sec. 1151. Reducing potentially preventable hospital readmissions.
    Sec. 1152. Post acute care services payment reform plan and bundling
                                pilot program.
    Sec. 1153. Home health payment update for 2010.
    Sec. 1154. Payment adjustments for home health care.
    Sec. 1155. Incorporating productivity improvements into market basket
                                update for home health services.
    Sec. 1156. Limitation on Medicare exceptions to the prohibition on
                                certain physician referrals made to
                                hospitals.
    Sec. 1157. Institute of Medicine study of geographic adjustment factors
                                under Medicare.
    Sec. 1158. Revision of medicare payment systems to address geographic
                                inequities.
    Sec. 1159. Institute of Medicine study of geographic variation in
                                health care spending and promoting high-
                                value health care.
                     Subtitle D--Medicare Advantage Reforms

                       Part 1--Payment and Administration

    Sec. 1161. Phase-in of payment based on fee-for-service costs.
    Sec. 1162. Quality bonus payments.
    Sec. 1163. Extension of Secretarial coding intensity adjustment
                                authority.
    Sec. 1164. Simplification of annual beneficiary election periods.
    Sec. 1165. Extension of reasonable cost contracts.
    Sec. 1166. Limitation of waiver authority for employer group plans.
    Sec. 1167. Improving risk adjustment for payments.
    Sec. 1168. Elimination of MA Regional Plan Stabilization Fund.
                 Part 2--Beneficiary Protections and Anti-Fraud

    Sec. 1171. Limitation on cost-sharing for individual health services.
    Sec. 1172. Continuous open enrollment for enrollees in plans with
                                enrollment suspension.
    Sec. 1173. Information for beneficiaries on MA plan administrative
                                costs.
    Sec. 1174. Strengthening audit authority.
    Sec. 1175. Authority to deny plan bids.
                    Part 3--Treatment of Special Needs Plans

    Sec. 1176. Limitation on enrollment outside open enrollment period of
                                individuals into chronic care specialized
                                MA plans for special needs individuals.
    Sec. 1177. Extension of authority of special needs plans to restrict
                                enrollment.
                  Subtitle E--Improvements to Medicare Part D

    Sec. 1181. Elimination of coverage gap.
    Sec. 1182. Discounts for certain part D drugs in original coverage gap.
    Sec. 1183. Repeal of provision relating to submission of claims by
                                pharmacies located in or contracting with
                                long-term care facilities.
    Sec. 1184. Including costs incurred by AIDS drug assistance programs
                                and Indian Health Service in providing
                                prescription drugs toward the annual out-
                                of-pocket threshold under part D.
    Sec. 1185. Permitting mid-year changes in enrollment for formulary
                                changes that adversely impact an enrollee.
                 Subtitle F--Medicare Rural Access Protections

    Sec. 1191. Telehealth expansion and enhancements.
    Sec. 1192. Extension of outpatient hold harmless provision.
    Sec. 1193. Extension of section 508 hospital reclassifications.
    Sec. 1194. Extension of geographic floor for work.
    Sec. 1195. Extension of payment for technical component of certain
                                physician pathology services.
    Sec. 1196. Extension of ambulance add-ons.
                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

      Subtitle A--Improving and Simplifying Financial Assistance for Low
                         Income Medicare Beneficiaries

    Sec. 1201. Improving assets tests for Medicare Savings Program and low-
                                income subsidy program.
    Sec. 1202. Elimination of part D cost-sharing for certain non-
                                institutionalized full-benefit dual
                                eligible individuals.
    Sec. 1203. Eliminating barriers to enrollment.
    Sec. 1204. Enhanced oversight relating to reimbursements for
                                retroactive low income subsidy enrollment.
    Sec. 1205. Intelligent assignment in enrollment.
    Sec. 1206. Special enrollment period and automatic enrollment process
                                for certain subsidy eligible individuals.
    Sec. 1207. Application of MA premiums prior to rebate in calculation of
                                low income subsidy benchmark.
                    Subtitle B--Reducing Health Disparities

    Sec. 1221. Ensuring effective communication in Medicare.
    Sec. 1222. Demonstration to promote access for Medicare beneficiaries
                                with limited English proficiency by
                                providing reimbursement for culturally and
                                linguistically appropriate services.
    Sec. 1223. IOM report on impact of language access services.
    Sec. 1224. Definitions.
                     Subtitle C--Miscellaneous Improvements

    Sec. 1231. Extension of therapy caps exceptions process.
    Sec. 1232. Extended months of coverage of immunosuppressive drugs for
                                kidney transplant patients and other renal
                                dialysis provisions.
    Sec. 1233. Advance care planning consultation.
    Sec. 1234. Part B special enrollment period and waiver of limited
                                enrollment penalty for TRICARE
                                beneficiaries.
    Sec. 1235. Exception for use of more recent tax year in case of gains
                                from sale of primary residence in computing
                                part B income-related premium.
    Sec. 1236. Demonstration program on use of patient decisions aids.
        TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
                                COORDINATED CARE

    Sec. 1301. Accountable Care Organization pilot program.
    Sec. 1302. Medical home pilot program.
    Sec. 1303. Payment incentive for selected primary care services.
    Sec. 1304. Increased reimbursement rate for certified nurse-midwives.
    Sec. 1305. Coverage and waiver of cost-sharing for preventive services.
    Sec. 1306. Waiver of deductible for colorectal cancer screening tests
                                regardless of coding, subsequent diagnosis,
                                or ancillary tissue removal.
    Sec. 1307. Excluding clinical social worker services from coverage
                                under the medicare skilled nursing facility
                                prospective payment system and consolidated
                                payment.
    Sec. 1308. Coverage of marriage and family therapist services and
                                mental health counselor services.
    Sec. 1309. Extension of physician fee schedule mental health add-on.
    Sec. 1310. Expanding access to vaccines.
    Sec. 1311. Expansion of Medicare-Covered Preventive Services at
                                Federally Qualified Health Centers.
                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    Sec. 1401. Comparative effectiveness research.
                     Subtitle B--Nursing Home Transparency

       Part 1--Improving Transparency of Information on Skilled Nursing
                       Facilities and Nursing Facilities

    Sec. 1411. Required disclosure of ownership and additional disclosable
                                parties information.
    Sec. 1412. Accountability requirements.
    Sec. 1413. Nursing home compare Medicare website.
    Sec. 1414. Reporting of expenditures.
    Sec. 1415. Standardized complaint form.
    Sec. 1416. Ensuring staffing accountability.
                         Part 2--Targeting Enforcement

    Sec. 1421. Civil money penalties.
    Sec. 1422. National independent monitor pilot program.
    Sec. 1423. Notification of facility closure.
                        Part 3--Improving Staff Training

    Sec. 1431. Dementia and abuse prevention training.
    Sec. 1432. Study and report on training required for certified nurse
                                aides and supervisory staff.
                        Subtitle C--Quality Measurements

    Sec. 1441. Establishment of national priorities for quality
                                improvement.
    Sec. 1442. Development of new quality measures; GAO evaluation of data
                                collection process for quality measurement.
    Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of
                                quality measures.
    Sec. 1444. Application of quality measures.
    Sec. 1445. Consensus-based entity funding.
               Subtitle D--Physician Payments Sunshine Provision

    Sec. 1451. Reports on financial relationships between manufacturers and
                                distributors of covered drugs, devices,
                                biologicals, or medical supplies under
                                Medicare, Medicaid, or CHIP and physicians
                                and other health care entities and between
                                physicians and other health care entities.
       Subtitle E--Public Reporting on Health Care-Associated Infections

    Sec. 1461. Requirement for public reporting by hospitals and ambulatory
                                surgical centers on health care-associated
                                infections.
                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

    Sec. 1501. Distribution of unused residency positions.
    Sec. 1502. Increasing training in nonprovider settings.
    Sec. 1503. Rules for counting resident time for didactic and scholarly
                                activities and other activities.
    Sec. 1504. Preservation of resident cap positions from closed
                                hospitals.
    Sec. 1505. Improving accountability for approved medical residency
                                training.
                          TITLE VI--PROGRAM INTEGRITY

         Subtitle A--Increased Funding to Fight Waste, Fraud, and Abuse

    Sec. 1601. Increased funding and flexibility to fight fraud and abuse.
               Subtitle B--Enhanced Penalties for Fraud and Abuse

    Sec. 1611. Enhanced penalties for false statements on provider or
                                supplier enrollment applications.
    Sec. 1612. Enhanced penalties for submission of false statements
                                material to a false claim.
    Sec. 1613. Enhanced penalties for delaying inspections.
    Sec. 1614. Enhanced hospice program safeguards.
    Sec. 1615. Enhanced penalties for individuals excluded from program
                                participation.
    Sec. 1616. Enhanced penalties for provision of false information by
                                Medicare Advantage and part D plans.
    Sec. 1617. Enhanced penalties for Medicare Advantage and part D
                                marketing violations.
    Sec. 1618. Enhanced penalties for obstruction of program audits.
    Sec. 1619. Exclusion of certain individuals and entities from
                                participation in Medicare and State health
                                care programs.
             Subtitle C--Enhanced Program and Provider Protections

    Sec. 1631. Enhanced CMS program protection authority.
    Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure
                                requirements relating to previous
                                affiliations.
    Sec. 1633. Required inclusion of payment modifier for certain
                                evaluation and management services.
    Sec. 1634. Evaluations and reports required under Medicare Integrity
                                Program.
    Sec. 1635. Require providers and suppliers to adopt programs to reduce
                                waste, fraud, and abuse.
    Sec. 1636. Maximum period for submission of Medicare claims reduced to
                                not more than 12 months.
    Sec. 1637. Physicians who order durable medical equipment or home
                                health services required to be Medicare
                                enrolled physicians or eligible
                                professionals.
    Sec. 1638. Requirement for physicians to provide documentation on
                                referrals to programs at high risk of waste
                                and abuse.
    Sec. 1639. Face to face encounter with patient required before
                                physicians may certify eligibility for home
                                health services or durable medical
                                equipment under Medicare.
    Sec. 1640. Extension of testimonial subpoena authority to program
                                exclusion investigations.
    Sec. 1641. Required repayments of Medicare and Medicaid overpayments.
    Sec. 1642. Expanded application of hardship waivers for OIG exclusions
                                to beneficiaries of any Federal health care
                                program.
    Sec. 1643. Access to certain information on renal dialysis facilities.
    Sec. 1644. Billing agents, clearinghouses, or other alternate payees
                                required to register under Medicare.
    Sec. 1645. Conforming civil monetary penalties to False Claims Act
                                amendments.
     Subtitle D--Access to Information Needed to Prevent Fraud, Waste, and
                                     Abuse

    Sec. 1651. Access to Information Necessary to Identify Fraud, Waste,
                                and Abuse.
    Sec. 1652. Elimination of duplication between the Healthcare Integrity
                                and Protection Data Bank and the National
                                Practitioner Data Bank.
    Sec. 1653. Compliance with HIPAA privacy and security standards.
                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

    Sec. 1701. Eligibility for individuals with income below 133\1/3\
                                percent of the Federal poverty level.
    Sec. 1702.  Requirements and special rules for certain Medicaid
                                eligible individuals.
    Sec. 1703. CHIP and Medicaid maintenance of effort.
    Sec. 1704. Reduction in Medicaid DSH.
    Sec. 1705. Expanded outstationing.
                             Subtitle B--Prevention

    Sec. 1711. Required coverage of preventive services.
    Sec. 1712. Tobacco cessation.
    Sec. 1713. Optional coverage of nurse home visitation services.
    Sec. 1714. State eligibility option for family planning services.
                               Subtitle C--Access

    Sec. 1721. Payments to primary care practitioners.
    Sec. 1722. Medical home pilot program.
    Sec. 1723. Translation or interpretation services.
    Sec. 1724. Optional coverage for freestanding birth center services.
    Sec. 1725. Inclusion of public health clinics under the vaccines for
                                children program.
                              Subtitle D--Coverage

    Sec. 1731. Optional medicaid coverage of low-income HIV-infected
                                individuals.
    Sec. 1732. Extending transitional Medicaid Assistance (TMA).
    Sec. 1733. Requirement of 12-month continuous coverage under certain
                                CHIP programs.
                             Subtitle E--Financing

    Sec. 1741. Payments to pharmacists.
    Sec. 1742. Prescription drug rebates.
    Sec. 1743. Extension of prescription drug discounts to enrollees of
                                medicaid managed care organizations.
    Sec. 1744. Payments for graduate medical education.
                      Subtitle F--Waste, Fraud, and Abuse

    Sec. 1751. Health-care acquired conditions.
    Sec. 1752. Evaluations and reports required under Medicaid Integrity
                                Program.
    Sec. 1753. Require providers and suppliers to adopt programs to reduce
                                waste, fraud, and abuse.
    Sec. 1754. Overpayments.
    Sec. 1755. Managed Care Organizations.
    Sec. 1756. Termination of provider participation under Medicaid and
                                CHIP if terminated under Medicare or other
                                State plan or child health plan.
    Sec. 1757.  Medicaid and CHIP exclusion from participation relating to
                                certain ownership, control, and management
                                affiliations.
    Sec. 1758.  Requirement to report expanded set of data elements under
                                MMIS to detect fraud and abuse.
    Sec. 1759. Billing agents, clearinghouses, or other alternate payees
                                required to register under Medicaid.
    Sec. 1760. Denial of payments for litigation-related misconduct.
                  Subtitle G--Puerto Rico and the Territories

    Sec. 1771. Puerto Rico and territories.
                           Subtitle H--Miscellaneous

    Sec. 1781. Technical corrections.
    Sec. 1782. Extension of QI program.
                     TITLE VIII--REVENUE-RELATED PROVISIONS

    Sec. 1801. Disclosures to facilitate identification of individuals
                                likely to be ineligible for the low-income
                                assistance under the Medicare prescription
                                drug program to assist Social Security
                                Administration's outreach to eligible
                                individuals.
    Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for
                                Trust Fund.
                       TITLE IX--MISCELLANEOUS PROVISIONS

    Sec. 1901. Repeal of trigger provision.
    Sec. 1902. Repeal of comparative cost adjustment (CCA) program.
    Sec. 1903. Extension of gainsharing demonstration.
    Sec. 1904. Grants to States for quality home visitation programs for
                                families with young children and families
                                expecting children.
    Sec. 1905. Improved coordination and protection for dual eligibles.
    Sec. 1906. Assessment of Medicare cost-intensive diseases and
                                conditions.

                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                         PART 1--MARKET BASKET UPDATES

    SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE.

        (a) In General.--Section 1888(e)(4)(E)(ii) of the Social Security
    Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
                (1) in subclause (III), by striking ``and'' at the end;
                (2) by redesignating subclause (IV) as subclause (VI); and
                (3) by inserting after subclause (III) the following new
            subclauses:
                                        ``(IV) for each of fiscal years
                                    2004 through 2009, the rate computed
                                    for the previous fiscal year increased
                                    by the skilled nursing facility market
                                    basket percentage change for the fiscal
                                    year involved;
                                        ``(V) for fiscal year 2010, the
                                    rate computed for the previous fiscal
                                    year; and''.
        (b) Delayed Effective Date.--Section 1888(e)(4)(E)(ii)(V) of the
    Social Security Act, as inserted by subsection (a)(3), shall not apply
    to payment for days before January 1, 2010.

    SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.

        (a) In General.--Section 1886(j)(3)(C) of the Social Security Act
    (42 U.S.C. 1395ww(j)(3)(C)) is amended by striking ``and 2009'' and
    inserting ``through 2010''.
        (b) Delayed Effective Date.--The amendment made by subsection (a)
    shall not apply to payment units occurring before January 1, 2010.

    SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATES THAT DO NOT ALREADY INCORPORATE SUCH
                  IMPROVEMENTS.

        (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social
    Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
                (1) in clause (iii)--
                        (A) by striking ``(iii) For purposes of this
                    subparagraph,'' and inserting ``(iii)(I) For purposes
                    of this subparagraph, subject to the productivity
                    adjustment described in subclause (II),''; and
                        (B) by adding at the end the following new
                    subclause:
        ``(II) The productivity adjustment described in this subclause,
    with respect to an increase or change for a fiscal year or year or cost
    reporting period, or other annual period, is a productivity offset
    equal to the percentage change in the 10-year moving average of annual
    economy-wide private nonfarm business multi-factor productivity (as
    recently published before the promulgation of such increase for the
    year or period involved). Except as otherwise provided, any reference
    to the increase described in this clause shall be a reference to the
    percentage increase described in subclause (I) minus the percentage
    change under this subclause.'';
                (2) in the first sentence of clause (viii)(I), by inserting
            ``(but not below zero)'' after ``shall be reduced''; and
                (3) in the first sentence of clause (ix)(I)--
                        (A) by inserting ``(determined without regard to
                    clause (iii)(II)'' after ``clause (i)'' the second time
                    it appears; and
                        (B) by inserting ``(but not below zero)'' after
                    ``reduced''.
        (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of such Act
    (42 U.S.C. 1395yy(e)(5))(B) is amended by inserting ``subject to the
    productivity adjustment described in section 1886(b)(3)(B)(iii)(II)''
    after ``as calculated by the Secretary''.
        (c) Long Term Care Hospitals.--Section 1886(m) of the Social
    Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the
    following new paragraph:
                ``(3) Productivity adjustment.--In implementing the system
            described in paragraph (1) for discharges occurring during the
            rate year ending in 2010 or any subsequent rate year for a
            hospital, to the extent that an annual percentage increase
            factor applies to a base rate for such discharges for the
            hospital, such factor shall be subject to the productivity
            adjustment described in subsection (b)(3)(B)(iii)(II).''.
        (d) Inpatient Rehabilitation Facilities.--The second sentence of
    section 1886(j)(3)(C) of the Social Security Act (42 U.S.C.
    1395ww(j)(3)(C)) is amended by inserting ``(subject to the productivity
    adjustment described in subsection (b)(3)(B)(iii)(II))'' after
    ``appropriate percentage increase''.
        (e) Psychiatric Hospitals.--Section 1886 of the Social Security Act
    (42 U.S.C. 1395ww) is amended by adding at the end the following new
    subsection:
        ``(o) Prospective Payment for Psychiatric Hospitals.--
                ``(1) Reference to establishment and implementation of
            system.--For provisions related to the establishment and
            implementation of a prospective payment system for payments
            under this title for inpatient hospital services furnished by
            psychiatric hospitals (as described in clause (i) of subsection
            (d)(1)(B) and psychiatric units (as described in the matter
            following clause (v) of such subsection), see section 124 of
            the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
            Act of 1999.
                ``(2) Productivity adjustment.--In implementing the system
            described in paragraph (1) for discharges occurring during the
            rate year ending in 2011 or any subsequent rate year for a
            psychiatric hospital or unit described in such paragraph, to
            the extent that an annual percentage increase factor applies to
            a base rate for such discharges for the hospital or unit,
            respectively, such factor shall be subject to the productivity
            adjustment described in subsection (b)(3)(B)(iii)(II).''.
        (f) Hospice Care.--Subclause (VII) of section 1814(i)(1)(C)(ii) of
    the Social Security Act (42 U.S.C. 1395f(i)(1)(C)(ii)) is amended by
    inserting after ``the market basket percentage increase'' the
    following: ``(which is subject to the productivity adjustment described
    in section 1886(b)(3)(B)(iii)(II))''.
        (g) Effective Date.--The amendments made by subsections (a), (b),
    (d), and (f) shall apply to annual increases effected for fiscal years
    beginning with fiscal year 2010.

                    PART 2--OTHER MEDICARE PART A PROVISIONS

    SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.

        (a) Change in Recalibration Factor.--
                (1) Analysis.--The Secretary of Health and Human Services
            shall conduct, using calendar year 2006 claims data, an initial
            analysis comparing total payments under title XVIII of the
            Social Security Act for skilled nursing facility services under
            the RUG-53 and under the RUG-44 classification systems.
                (2) Adjustment in recalibration factor.--Based on the
            initial analysis under paragraph (1), the Secretary shall
            adjust the case mix indexes under section 1888(e)(4)(G)(i) of
            the Social Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for
            fiscal year 2010 by the appropriate recalibration factor as
            proposed in the proposed rule for Medicare skilled nursing
            facilities issued by such Secretary on May 12, 2009 (74 Federal
            Register 22214 et seq.).
        (b) Change in Payment for Nontherapy Ancillary (NTA) Services and
    Therapy Services.--
                (1) Changes under current snf classification system.--
                        (A) In general.--Subject to subparagraph (B), the
                    Secretary of Health and Human Services shall, under the
                    system for payment of skilled nursing facility services
                    under section 1888(e) of the Social Security Act (42
                    U.S.C. 1395yy(e)), increase payment by 10 percent for
                    non-therapy ancillary services (as specified by the
                    Secretary in the notice issued on November 27, 1998 (63
                    Federal Register 65561 et seq.)) and shall decrease
                    payment for the therapy case mix component of such
                    rates by 5.5 percent.
                        (B) Effective date.--The changes in payment
                    described in subparagraph (A) shall apply for days on
                    or after January 1, 2010, and until the Secretary
                    implements an alternative case mix classification
                    system for payment of skilled nursing facility services
                    under section 1888(e) of the Social Security Act (42
                    U.S.C. 1395yy(e)).
                        (C) Implementation.--Notwithstanding any other
                    provision of law, the Secretary may implement by
                    program instruction or otherwise the provisions of this
                    paragraph.
                (2) Changes under a future snf case mix classification
            system.--
                        (A) Analysis.--
                                (i) In general.--The Secretary of Health
                            and Human Services shall analyze payments for
                            non-therapy ancillary services under a future
                            skilled nursing facility classification system
                            to ensure the accuracy of payment for non-
                            therapy ancillary services. Such analysis shall
                            consider use of appropriate predictors which
                            may include age, physical and mental status,
                            ability to perform activities of daily living,
                            prior nursing home stay, diagnoses, broad RUG
                            category, and a proxy for length of stay.
                                (ii) Application.--Such analysis shall be
                            conducted in a manner such that the future
                            skilled nursing facility classification system
                            is implemented to apply to services furnished
                            during a fiscal year beginning with fiscal year
                            2011.
                        (B) Consultation.--In conducting the analysis under
                    subparagraph (A), the Secretary shall consult with
                    interested parties, including the Medicare Payment
                    Advisory Commission and other interested stakeholders,
                    to identify appropriate predictors of nontherapy
                    ancillary costs.
                        (C) Rulemaking.--The Secretary shall include the
                    result of the analysis under subparagraph (A) in the
                    fiscal year 2011 rulemaking cycle for purposes of
                    implementation beginning for such fiscal year.
                        (D) Implementation.--Subject to subparagraph (E)
                    and consistent with subparagraph (A)(ii), the Secretary
                    shall implement changes to payments for non-therapy
                    ancillary services (which shall include a separate rate
                    component for non-therapy ancillary services and may
                    include use of a model that predicts payment amounts
                    applicable for non-therapy ancillary services) under
                    such future skilled nursing facility services
                    classification system as the Secretary determines
                    appropriate based on the analysis conducted pursuant to
                    subparagraph (A).
                        (E) Budget neutrality.--The Secretary shall
                    implement changes described in subparagraph (D) in a
                    manner such that the estimated expenditures under such
                    future skilled nursing facility services classification
                    system for a fiscal year beginning with fiscal year
                    2011 with such changes would be equal to the estimated
                    expenditures that would otherwise occur under title
                    XVIII of the Social Security Act under such future
                    skilled nursing facility services classification system
                    for such year without such changes.
        (c) Outlier Policy for NTA and Therapy.--Section 1888(e) of the
    Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at the
    end the following new paragraph:
                ``(13) Outliers for nta and therapy.--
                        ``(A) In general.--With respect to outliers because
                    of unusual variations in the type or amount of
                    medically necessary care, beginning with October 1,
                    2010, the Secretary--
                                ``(i) shall provide for an addition or
                            adjustment to the payment amount otherwise made
                            under this section with respect to non-therapy
                            ancillary services in the case of such
                            outliers; and
                                ``(ii) may provide for such an addition or
                            adjustment to the payment amount otherwise made
                            under this section with respect to therapy
                            services in the case of such outliers.
                        ``(B) Outliers based on aggregate costs.--Outlier
                    adjustments or additional payments described in
                    subparagraph (A) shall be based on aggregate costs
                    during a stay in a skilled nursing facility and not on
                    the number of days in such stay.
                        ``(C) Budget neutrality.--The Secretary shall
                    reduce estimated payments that would otherwise be made
                    under the prospective payment system under this
                    subsection with respect to a fiscal year by 2 percent.
                    The total amount of the additional payments or payment
                    adjustments for outliers made under this paragraph with
                    respect to a fiscal year may not exceed 2 percent of
                    the total payments projected or estimated to be made
                    based on the prospective payment system under this
                    subsection for the fiscal year.''.
        (d) Conforming Amendments.--Section 1888(e)(8) of such Act (42
    U.S.C. 1395yy(e)(8)) is amended--
                (1) in subparagraph (A)--
                        (A) by striking ``and'' before ``adjustments''; and
                        (B) by inserting ``, and adjustment under section
                    1111(b) of the America's Affordable Health Choices Act
                    of 2009'' before the semicolon at the end;
                (2) in subparagraph (B), by striking ``and'';
                (3) in subparagraph (C), by striking the period and
            inserting ``; and''; and
                (4) by adding at the end the following new subparagraph:
                        ``(D) the establishment of outliers under paragraph
                    (13).''.

    SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUSTMENTS IN RESPONSE TO
                  COVERAGE EXPANSION.

        (a) DSH Report.--
                (1) In general.--Not later than January 1, 2016, the
            Secretary of Health and Human Services shall submit to Congress
            a report on Medicare DSH taking into account the impact of the
            health care reforms carried out under subdivision A in reducing
            the number of uninsured individuals. The report shall include
            recommendations relating to the following:
                        (A) The appropriate amount, targeting, and
                    distribution of Medicare DSH to compensate for higher
                    Medicare costs associated with serving low-income
                    beneficiaries (taking into account variations in the
                    empirical justification for Medicare DSH attributable
                    to hospital characteristics, including bed size),
                    consistent with the original intent of Medicare DSH.
                        (B) The appropriate amount, targeting, and
                    distribution of Medicare DSH to hospitals given their
                    continued uncompensated care costs, to the extent such
                    costs remain.
                (2) Coordination with medicaid dsh report.--The Secretary
            shall coordinate the report under this subsection with the
            report on Medicaid DSH under section 1704(a).
        (b) Payment Adjustments in Response to Coverage Expansion.--
                (1) In general.--If there is a significant decrease in the
            national rate of uninsurance as a result of this division (as
            determined under paragraph (2)(A)), then the Secretary of
            Health and Human Services shall, beginning in fiscal year 2017,
            implement the following adjustments to Medicare DSH:
                        (A) In lieu of the amount of Medicare DSH payment
                    that would otherwise be made under section
                    1886(d)(5)(F) of the Social Security Act, the amount of
                    Medicare DSH payment shall be an amount based on the
                    recommendations of the report under subsection
                    (a)(1)(A) and shall take into account variations in the
                    empirical justification for Medicare DSH attributable
                    to hospital characteristics, including bed size.
                        (B) Subject to paragraph (3), make an additional
                    payment to a hospital by an amount that is estimated
                    based on the amount of uncompensated care provided by
                    the hospital based on criteria for uncompensated care
                    as determined by the Secretary, which shall exclude bad
                    debt.
                (2) Significant decrease in national rate of uninsurance as
            a result of this division.--For purposes of this subsection--
                        (A) In general.--There is a ``significant decrease
                    in the national rate of uninsurance as a result of this
                    division'' if there is a decrease in the national rate
                    of uninsurance (as defined in subparagraph (B)) from
                    2012 to 2014 that exceeds 8 percentage points.
                        (B) National rate of uninsurance defined.--The term
                    ``national rate of uninsurance'' means, for a year,
                    such rate for the under-65 population for the year as
                    determined and published by the Bureau of the Census in
                    its Current Population Survey in or about September of
                    the succeeding year.
                (3) Uncompensated care increase.--
                        (A) Computation of dsh savings.--For each fiscal
                    year (beginning with fiscal year 2017), the Secretary
                    shall estimate the aggregate reduction in the amount of
                    Medicare DSH payment that would be expected to result
                    from the adjustment under paragraph (1)(A).
                        (B) Structure of payment increase.--The Secretary
                    shall compute the additional payment to a hospital as
                    described in paragraph (1)(B) for a fiscal year in
                    accordance with a formula established by the Secretary
                    that provides that--
                                (i) the estimated aggregate amount of such
                            increase for the fiscal year does not exceed 50
                            percent of the aggregate reduction in Medicare
                            DSH estimated by the Secretary for such fiscal
                            year; and
                                (ii) hospitals with higher levels of
                            uncompensated care receive a greater increase.
        (c) Medicare DSH.--In this section, the term ``Medicare DSH'' means
    adjustments in payments under section 1886(d)(5)(F) of the Social
    Security Act (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital
    services furnished by disproportionate share hospitals.

    SEC. 1113. EXTENSION OF HOSPICE REGULATION MORATORIUM.

        Section 4301(a) of division B of the American Recovery and
    Reinvestment Act of 2009 (Public Law 111-5) is amended--
                (1) by striking ``October 1, 2009'' and inserting ``October
            1, 2010''; and
                (2) by striking ``for fiscal year 2009'' and inserting
            ``for fiscal years 2009 and 2010''.

                    Subtitle B--Provisions Related to Part B

                          PART 1--PHYSICIANS' SERVICES

    SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

        (a) Transitional Update for 2010.--Section 1848(d) of the Social
    Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the end the
    following new paragraph:
                ``(10) Update for 2010.--The update to the single
            conversion factor established in paragraph (1)(C) for 2010
            shall be the percentage increase in the MEI (as defined in
            section 1842(i)(3)) for that year.''.
        (b) Rebasing SGR Using 2009; Limitation on Cumulative Adjustment
    Period.--Section 1848(d)(4) of such Act (42 U.S.C. 1395w-4(d)(4)) is
    amended--
                (1) in subparagraph (B), by striking ``subparagraph (D)''
            and inserting ``subparagraphs (D) and (G)''; and
                (2) by adding at the end the following new subparagraph:
                        ``(G) Rebasing using 2009 for future update
                    adjustments.--In determining the update adjustment
                    factor under subparagraph (B) for 2011 and subsequent
                    years--
                                ``(i) the allowed expenditures for 2009
                            shall be equal to the amount of the actual
                            expenditures for physicians' services during
                            2009; and
                                ``(ii) the reference in subparagraph
                            (B)(ii)(I) to `April 1, 1996' shall be treated
                            as a reference to `January 1, 2009 (or, if
                            later, the first day of the fifth year before
                            the year involved)'.''.
        (c) Limitation on Physicians' Services Included in Target Growth
    Rate Computation to Services Covered Under Physician Fee Schedule.--
    Effective for services furnished on or after January 1, 2009, section
    1848(f)(4)(A) of such Act is amended by striking ``(such as clinical''
    and all that follows through ``in a physician's office'' and inserting
    ``for which payment under this part is made under the fee schedule
    under this section, for services for practitioners described in section
    1842(b)(18)(C) on a basis related to such fee schedule, or for services
    described in section 1861(p) (other than such services when furnished
    in the facility of a provider of services)''.
        (d) Establishment of Separate Target Growth Rates for Categories of
    Services.--
                (1) Establishment of service categories.--Subsection (j) of
            section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
            amended by adding at the end the following new paragraph:
                ``(5) Service categories.--For services furnished on or
            after January 1, 2009, each of the following categories of
            physicians' services (as defined in paragraph (3)) shall be
            treated as a separate `service category':
                        ``(A) Evaluation and management services that are
                    procedure codes (for services covered under this title)
                    for--
                                ``(i) services in the category designated
                            Evaluation and Management in the Health Care
                            Common Procedure Coding System (established by
                            the Secretary under subsection (c)(5) as of
                            December 31, 2009, and as subsequently modified
                            by the Secretary); and
                                ``(ii) preventive services (as defined in
                            section 1861(iii)) for which payment is made
                            under this section.
                        ``(B) All other services not described in
                    subparagraph (A).
            Service categories established under this paragraph shall apply
            without regard to the specialty of the physician furnishing the
            service.''.
                (2) Establishment of separate conversion factors for each
            service category.--Subsection (d)(1) of section 1848 of the
            Social Security Act (42 U.S.C. 1395w-4) is amended--
                        (A) in subparagraph (A)--
                                (i) by designating the sentence beginning
                            ``The conversion factor'' as clause (i) with
                            the heading ``Application of single conversion
                            factor.--'' and with appropriate indentation;
                                (ii) by striking ``The conversion factor''
                            and inserting ``Subject to clause (ii), the
                            conversion factor''; and
                                (iii) by adding at the end the following
                            new clause:
                                ``(ii) Application of multiple conversion
                            factors beginning with 2011.--
                                        ``(I) In general.--In applying
                                    clause (i) for years beginning with
                                    2011, separate conversion factors shall
                                    be established for each service
                                    category of physicians' services (as
                                    defined in subsection (j)(5)) and any
                                    reference in this section to a
                                    conversion factor for such years shall
                                    be deemed to be a reference to the
                                    conversion factor for each of such
                                    categories.
                                        ``(II) Initial conversion
                                    factors.--Such factors for 2011 shall
                                    be based upon the single conversion
                                    factor for the previous year multiplied
                                    by the update established under
                                    paragraph (11) for such category for
                                    2011.
                                        ``(III) Updating of conversion
                                    factors.--Such factor for a service
                                    category for a subsequent year shall be
                                    based upon the conversion factor for
                                    such category for the previous year and
                                    adjusted by the update established for
                                    such category under paragraph (11) for
                                    the year involved.''; and
                        (B) in subparagraph (D), by striking ``other
                    physicians' services'' and inserting ``for physicians'
                    services described in the service category described in
                    subsection (j)(5)(B)''.
                (3) Establishing updates for conversion factors for service
            categories.--Section 1848(d) of the Social Security Act (42
            U.S.C. 1395w-4(d)), as amended by subsection (a), is amended--
                        (A) in paragraph (4)(C)(iii), by striking ``The
                    allowed'' and inserting ``Subject to paragraph (11)(B),
                    the allowed''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(11) Updates for service categories beginning with
            2011.--
                        ``(A) In general.--In applying paragraph (4) for a
                    year beginning with 2011, the following rules apply:
                                ``(i) Application of separate update
                            adjustments for each service category.--
                            Pursuant to paragraph (1)(A)(ii)(I), the update
                            shall be made to the conversion factor for each
                            service category (as defined in subsection
                            (j)(5)) based upon an update adjustment factor
                            for the respective category and year and the
                            update adjustment factor shall be computed, for
                            a year, separately for each service category.
                                ``(ii) Computation of allowed and actual
                            expenditures based on service categories.--In
                            computing the prior year adjustment component
                            and the cumulative adjustment component under
                            clauses (i) and (ii) of paragraph (4)(B), the
                            following rules apply:
                                        ``(I) Application based on service
                                    categories.--The allowed expenditures
                                    and actual expenditures shall be the
                                    allowed and actual expenditures for the
                                    service category, as determined under
                                    subparagraph (B).
                                        ``(II) Application of category
                                    specific target growth rate.--The
                                    growth rate applied under clause
                                    (ii)(II) of such paragraph shall be the
                                    target growth rate for the service
                                    category involved under subsection
                                    (f)(5).
                        ``(B) Determination of allowed expenditures.--In
                    applying paragraph (4) for a year beginning with 2010,
                    notwithstanding subparagraph (C)(iii) of such
                    paragraph, the allowed expenditures for a service
                    category for a year is an amount computed by the
                    Secretary as follows:
                                ``(i) For 2010.--For 2010:
                                        ``(I) Total 2009 actual
                                    expenditures for all services included
                                    in sgr computation for each service
                                    category.--Compute total actual
                                    expenditures for physicians' services
                                    (as defined in subsection (f)(4)(A))
                                    for 2009 for each service category.
                                        ``(II) Increase by growth rate to
                                    obtain 2010 allowed expenditures for
                                    service category.--Compute allowed
                                    expenditures for the service category
                                    for 2010 by increasing the allowed
                                    expenditures for the service category
                                    for 2009 computed under subclause (I)
                                    by the target growth rate for such
                                    service category under subsection (f)
                                    for 2010.
                                ``(ii) For subsequent years.--For a
                            subsequent year, take the amount of allowed
                            expenditures for such category for the
                            preceding year (under clause (i) or this
                            clause) and increase it by the target growth
                            rate determined under subsection (f) for such
                            category and year.''.
                (4) Application of separate target growth rates for each
            category.--
                        (A) In general.--Section 1848(f) of the Social
                    Security Act (42 U.S.C. 1395w-4(f)) is amended by
                    adding at the end the following new paragraph:
                ``(5) Application of separate target growth rates for each
            service category beginning with 2010.--The target growth rate
            for a year beginning with 2010 shall be computed and applied
            separately under this subsection for each service category (as
            defined in subsection (j)(5)) and shall be computed using the
            same method for computing the target growth rate except that
            the factor described in paragraph (2)(C) for--
                        ``(A) the service category described in subsection
                    (j)(5)(A) shall be increased by 0.02; and
                        ``(B) the service category described in subsection
                    (j)(5)(B) shall be increased by 0.01.''.
                        (B) Use of target growth rates.--Section 1848 of
                    such Act is further amended--
                                (i) in subsection (d)--
                                        (I) in paragraph (1)(E)(ii), by
                                    inserting ``or target'' after
                                    ``sustainable''; and
                                        (II) in paragraph (4)(B)(ii)(II),
                                    by inserting ``or target'' after
                                    ``sustainable''; and
                                (ii) in the heading of subsection (f), by
                            inserting ``and Target Growth Rate'' after
                            ``Sustainable Growth Rate'';
                                (iii) in subsection (f)(1)--
                                        (I) by striking ``and'' at the end
                                    of subparagraph (A);
                                        (II) in subparagraph (B), by
                                    inserting ``before 2010'' after ``each
                                    succeeding year'' and by striking the
                                    period at the end and inserting ``;
                                    and''; and
                                        (III) by adding at the end the
                                    following new subparagraph:
                        ``(C) November 1 of each succeeding year the target
                    growth rate for such succeeding year and each of the 2
                    preceding years.''; and
                                (iv) in subsection (f)(2), in the matter
                            before subparagraph (A), by inserting after
                            ``beginning with 2000'' the following: ``and
                            ending with 2009''.
        (e) Application to Accountable Care Organization Pilot Program.--In
    applying the target growth rate under subsections (d) and (f) of
    section 1848 of the Social Security Act to services furnished by a
    practitioner to beneficiaries who are attributable to an accountable
    care organization under the pilot program provided under section 1866D
    of such Act, the Secretary of Health and Human Services shall develop,
    not later than January 1, 2012, for application beginning with 2012, a
    method that--
                (1) allows each such organization to have its own
            expenditure targets and updates for such practitioners, with
            respect to beneficiaries who are attributable to that
            organization, that are consistent with the methodologies
            described in such subsection (f); and
                (2) provides that the target growth rate applicable to
            other physicians shall not apply to such physicians to the
            extent that the physicians' services are furnished through the
            accountable care organization.
    In applying paragraph (1), the Secretary of Health and Human Services
    may apply the difference in the update under such paragraph on a claim-
    by-claim or lump sum basis and such a payment shall be taken into
    account under the pilot program.

    SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

        (a) In General.--Section 1848(c)(2) of the Social Security Act (42
    U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new
    subparagraphs:
                        ``(K) Potentially misvalued codes.--
                                ``(i) In general.--The Secretary shall--
                                        ``(I) periodically identify
                                    services as being potentially misvalued
                                    using criteria specified in clause
                                    (ii); and
                                        ``(II) review and make appropriate
                                    adjustments to the relative values
                                    established under this paragraph for
                                    services identified as being
                                    potentially misvalued under subclause
                                    (I).
                                ``(ii) Identification of potentially
                            misvalued codes.--For purposes of identifying
                            potentially misvalued services pursuant to
                            clause (i)(I), the Secretary shall examine (as
                            the Secretary determines to be appropriate)
                            codes (and families of codes as appropriate)
                            for which there has been the fastest growth;
                            codes (and families of codes as appropriate)
                            that have experienced substantial changes in
                            practice expenses; codes for new technologies
                            or services within an appropriate period (such
                            as three years) after the relative values are
                            initially established for such codes; multiple
                            codes that are frequently billed in conjunction
                            with furnishing a single service; codes with
                            low relative values, particularly those that
                            are often billed multiple times for a single
                            treatment; codes which have not been subject to
                            review since the implementation of the RBRVS
                            (the so-called `Harvard-valued codes'); and
                            such other codes determined to be appropriate
                            by the Secretary.
                                ``(iii) Review and adjustments.--
                                        ``(I) The Secretary may use
                                    existing processes to receive
                                    recommendations on the review and
                                    appropriate adjustment of potentially
                                    misvalued services described clause
                                    (i)(II).
                                        ``(II) The Secretary may conduct
                                    surveys, other data collection
                                    activities, studies, or other analyses
                                    as the Secretary determines to be
                                    appropriate to facilitate the review
                                    and appropriate adjustment described in
                                    clause (i)(II).
                                        ``(III) The Secretary may use
                                    analytic contractors to identify and
                                    analyze services identified under
                                    clause (i)(I), conduct surveys or
                                    collect data, and make recommendations
                                    on the review and appropriate
                                    adjustment of services described in
                                    clause (i)(II).
                                        ``(IV) The Secretary may coordinate
                                    the review and appropriate adjustment
                                    described in clause (i)(II) with the
                                    periodic review described in
                                    subparagraph (B).
                                        ``(V) As part of the review and
                                    adjustment described in clause (i)(II),
                                    including with respect to codes with
                                    low relative values described in clause
                                    (ii), the Secretary may make
                                    appropriate coding revisions (including
                                    using existing processes for
                                    consideration of coding changes) which
                                    may include consolidation of individual
                                    services into bundled codes for payment
                                    under the fee schedule under subsection
                                    (b).
                                        ``(VI) The provisions of
                                    subparagraph (B)(ii)(II) shall apply to
                                    adjustments to relative value units
                                    made pursuant to this subparagraph in
                                    the same manner as such provisions
                                    apply to adjustments under subparagraph
                                    (B)(ii)(II).
                        ``(L) Validating relative value units.--
                                ``(i) In general.--The Secretary shall
                            establish a process to validate relative value
                            units under the fee schedule under subsection
                            (b).
                                ``(ii) Components and elements of work.--
                            The process described in clause (i) may include
                            validation of work elements (such as time,
                            mental effort and professional judgment,
                            technical skill and physical effort, and stress
                            due to risk) involved with furnishing a service
                            and may include validation of the pre, post,
                            and intra-service components of work.
                                ``(iii) Scope of codes.--The validation of
                            work relative value units shall include a
                            sampling of codes for services that is the same
                            as the codes listed under subparagraph (K)(ii)
                                ``(iv) Methods.--The Secretary may conduct
                            the validation under this subparagraph using
                            methods described in subclauses (I) through (V)
                            of subparagraph (K)(iii) as the Secretary
                            determines to be appropriate.
                                ``(v) Adjustments.--The Secretary shall
                            make appropriate adjustments to the work
                            relative value units under the fee schedule
                            under subsection (b). The provisions of
                            subparagraph (B)(ii)(II) shall apply to
                            adjustments to relative value units made
                            pursuant to this subparagraph in the same
                            manner as such provisions apply to adjustments
                            under subparagraph (B)(ii)(II).''.
        (b) Implementation.--
                (1) Funding.--For purposes of carrying out the provisions
            of subparagraphs (K) and (L) of 1848(c)(2) of the Social
            Security Act, as added by subsection (a), in addition to funds
            otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services for the Center for Medicare &
            Medicaid Services Program Management Account $20,000,000 for
            fiscal year 2010 and each subsequent fiscal year. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                (2) Administration.--
                        (A) Chapter 35 of title 44, United States Code and
                    the provisions of the Federal Advisory Committee Act (5
                    U.S.C. App.) shall not apply to this section or the
                    amendment made by this section.
                        (B) Notwithstanding any other provision of law, the
                    Secretary may implement subparagraphs (K) and (L) of
                    1848(c)(2) of the Social Security Act, as added by
                    subsection (a), by program instruction or otherwise.
                        (C) Section 4505(d) of the Balanced Budget Act of
                    1997 is repealed.
                        (D) Except for provisions related to
                    confidentiality of information, the provisions of the
                    Federal Acquisition Regulation shall not apply to this
                    section or the amendment made by this section.
                (3) Focusing cms resources on potentially overvalued
            codes.--Section 1868(a) of the Social Security Act (42
            1395ee(a)) is repealed.

    SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

        Section 1833 of the Social Security Act (42 U.S.C. 1395l) is
    amended by adding at the end the following new subsection:
        ``(x) Incentive Payments for Efficient Areas.--
                ``(1) In general.--In the case of services furnished under
            the physician fee schedule under section 1848 on or after
            January 1, 2011, and before January 1, 2013, by a supplier that
            is paid under such fee schedule in an efficient area (as
            identified under paragraph (2)), in addition to the amount of
            payment that would otherwise be made for such services under
            this part, there also shall be paid (on a monthly or quarterly
            basis) an amount equal to 5 percent of the payment amount for
            the services under this part.
                ``(2) Identification of efficient areas.--
                        ``(A) In general.--Based upon available data, the
                    Secretary shall identify those counties or equivalent
                    areas in the United States in the lowest fifth
                    percentile of utilization based on per capita spending
                    under this part and part A for services provided in the
                    most recent year for which data are available as of the
                    date of the enactment of this subsection, as
                    standardized to eliminate the effect of geographic
                    adjustments in payment rates.
                        ``(B) Identification of counties where service is
                    furnished..--For purposes of paying the additional
                    amount specified in paragraph (1), if the Secretary
                    uses the 5-digit postal ZIP Code where the service is
                    furnished, the dominant county of the postal ZIP Code
                    (as determined by the United States Postal Service, or
                    otherwise) shall be used to determine whether the
                    postal ZIP Code is in a county described in
                    subparagraph (A).
                        ``(C) Limitation on review.--There shall be no
                    administrative or judicial review under section 1869,
                    1878, or otherwise, respecting--
                                ``(i) the identification of a county or
                            other area under subparagraph (A); or
                                ``(ii) the assignment of a postal ZIP Code
                            to a county or other area under subparagraph
                            (B).
                        ``(D) Publication of list of counties; posting on
                    website.--With respect to a year for which a county or
                    area is identified under this paragraph, the Secretary
                    shall identify such counties or areas as part of the
                    proposed and final rule to implement the physician fee
                    schedule under section 1848 for the applicable year.
                    The Secretary shall post the list of counties
                    identified under this paragraph on the Internet website
                    of the Centers for Medicare & Medicaid Services.''.

    SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY REPORTING INITIATIVE
                  (PQRI).

        (a) Feedback.--Section 1848(m)(5) of the Social Security Act (42
    U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new
    subparagraph:
                        ``(H) Feedback.--The Secretary shall provide timely
                    feedback to eligible professionals on the performance
                    of the eligible professional with respect to
                    satisfactorily submitting data on quality measures
                    under this subsection.''.
        (b) Appeals.--Such section is further amended--
                (1) in subparagraph (E), by striking ``There shall be'' and
            inserting ``Subject to subparagraph (I), there shall be''; and
                (2) by adding at the end the following new subparagraph:
                        ``(I) Informal appeals process.--Notwithstanding
                    subparagraph (E), by not later than January 1, 2011,
                    the Secretary shall establish and have in place an
                    informal process for eligible professionals to appeal
                    the determination that an eligible professional did not
                    satisfactorily submit data on quality measures under
                    this subsection.''.
        (c) Integration of Physician Quality Reporting and EHR Reporting.--
    Section 1848(m) of such Act is amended by adding at the end the
    following new paragraph:
                ``(7) Integration of physician quality reporting and ehr
            reporting.--Not later than January 1, 2012, the Secretary shall
            develop a plan to integrate clinical reporting on quality
            measures under this subsection with reporting requirements
            under subsection (o) relating to the meaningful use of
            electronic health records. Such integration shall consist of
            the following:
                        ``(A) The development of measures, the reporting of
                    which would both demonstrate--
                                ``(i) meaningful use of an electronic
                            health record for purposes of subsection (o);
                            and
                                ``(ii) clinical quality of care furnished
                            to an individual.
                        ``(B) The collection of health data to identify
                    deficiencies in the quality and coordination of care
                    for individuals eligible for benefits under this part.
                        ``(C) Such other activities as specified by the
                    Secretary.''.
        (d) Extension of Incentive Payments.--Section 1848(m)(1) of such
    Act (42 U.S.C. 1395w-4(m)(1)) is amended--
                (1) in subparagraph (A), by striking ``2010'' and inserting
            ``2012''; and
                (2) in subparagraph (B)(ii), by striking ``2009 and 2010''
            and inserting ``for each of the years 2009 through 2012''.

    SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

        (a) In General.--Section 1848(e) of the Social Security Act (42
    U.S.C.1395w-4(e)) is amended by adding at the end the following new
    paragraph:
                ``(6) Transition to use of msas as fee schedule areas in
            california.--
                        ``(A) In general.--
                                ``(i) Revision.--Subject to clause (ii) and
                            notwithstanding the previous provisions of this
                            subsection, for services furnished on or after
                            January 1, 2011, the Secretary shall revise the
                            fee schedule areas used for payment under this
                            section applicable to the State of California
                            using the Metropolitan Statistical Area (MSA)
                            iterative Geographic Adjustment Factor
                            methodology as follows:
                                        ``(I) The Secretary shall configure
                                    the physician fee schedule areas using
                                    the Core-Based Statistical Areas-
                                    Metropolitan Statistical Areas (each in
                                    this paragraph referred to as an
                                    `MSA'), as defined by the Director of
                                    the Office of Management and Budget, as
                                    the basis for the fee schedule areas.
                                    The Secretary shall employ an iterative
                                    process to transition fee schedule
                                    areas. First, the Secretary shall list
                                    all MSAs within the State by Geographic
                                    Adjustment Factor described in
                                    paragraph (2) (in this paragraph
                                    referred to as a `GAF') in descending
                                    order. In the first iteration, the
                                    Secretary shall compare the GAF of the
                                    highest cost MSA in the State to the
                                    weighted-average GAF of the group of
                                    remaining MSAs in the State. If the
                                    ratio of the GAF of the highest cost
                                    MSA to the weighted-average GAF of the
                                    rest of State is 1.05 or greater then
                                    the highest cost MSA becomes a separate
                                    fee schedule area.
                                        ``(II) In the next iteration, the
                                    Secretary shall compare the MSA of the
                                    second-highest GAF to the weighted-
                                    average GAF of the group of remaining
                                    MSAs. If the ratio of the second-
                                    highest MSA's GAF to the weighted-
                                    average of the remaining lower cost
                                    MSAs is 1.05 or greater, the second-
                                    highest MSA becomes a separate fee
                                    schedule area. The iterative process
                                    continues until the ratio of the GAF of
                                    the highest-cost remaining MSA to the
                                    weighted-average of the remaining
                                    lower-cost MSAs is less than 1.05, and
                                    the remaining group of lower cost MSAs
                                    form a single fee schedule area, If two
                                    MSAs have identical GAFs, they shall be
                                    combined in the iterative comparison.
                                ``(ii) Transition.--For services furnished
                            on or after January 1, 2011, and before January
                            1, 2016, in the State of California, after
                            calculating the work, practice expense, and
                            malpractice geographic indices described in
                            clauses (i), (ii), and (iii) of paragraph
                            (1)(A) that would otherwise apply through
                            application of this paragraph, the Secretary
                            shall increase any such index to the county-
                            based fee schedule area value on December 31,
                            2009, if such index would otherwise be less
                            than the value on January 1, 2010.
                        ``(B) Subsequent revisions.--
                                ``(i) Periodic review and adjustments in
                            fee schedule areas.--Subsequent to the process
                            outlined in paragraph (1)(C), not less often
                            than every three years, the Secretary shall
                            review and update the California Rest-of-State
                            fee schedule area using MSAs as defined by the
                            Director of the Office of Management and Budget
                            and the iterative methodology described in
                            subparagraph (A)(i).
                                ``(ii) Link with geographic index data
                            revision.--The revision described in clause (i)
                            shall be made effective concurrently with the
                            application of the periodic review of the
                            adjustment factors required under paragraph
                            (1)(C) for California for 2012 and subsequent
                            periods. Upon request, the Secretary shall make
                            available to the public any county-level or MSA
                            derived data used to calculate the geographic
                            practice cost index.
                        ``(C) References to fee schedule areas.--Effective
                    for services furnished on or after January 1, 2010, for
                    the State of California, any reference in this section
                    to a fee schedule area shall be deemed a reference to
                    an MSA in the State.''.
        (b) Conforming Amendment to Definition of Fee Schedule Area.--
    Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w(j)(2))
    is amended by striking ``The term'' and inserting ``Except as provided
    in subsection (e)(6)(C), the term''.

                         PART 2--MARKET BASKET UPDATES

    SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATES THAT DO NOT ALREADY INCORPORATE SUCH
                  IMPROVEMENTS.

        (a) Outpatient Hospitals.--
                (1) In general.--The first sentence of section
            1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C.
            1395l(t)(3)(C)(iv)) is amended--
                        (A) by inserting ``(which is subject to the
                    productivity adjustment described in subclause (II) of
                    such section)'' after ``1886(b)(3)(B)(iii)''; and
                        (B) by inserting ``(but not below 0)'' after
                    ``reduced''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall apply to increase factors for services furnished in years
            beginning with 2010.
        (b) Ambulance Services.--Section 1834(l)(3)(B) of such Act (42
    U.S.C. 1395m(l)(3)(B))) is amended by inserting before the period at
    the end the following: ``and, in the case of years beginning with 2010,
    subject to the productivity adjustment described in section
    1886(b)(3)(B)(iii)(II)''.
        (c) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of
    such Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
                (1) by redesignating clause (v) as clause (vi); and
                (2) by inserting after clause (iv) the following new
            clause:
        ``(v) In implementing the system described in clause (i), for
    services furnished during 2010 or any subsequent year, to the extent
    that an annual percentage change factor applies, such factor shall be
    subject to the productivity adjustment described in section
    1886(b)(3)(B)(iii)(II).''.
        (d) Laboratory Services.--Section 1833(h)(2)(A) of such Act (42
    U.S.C. 1395l(h)(2)(A)) is amended--
                (1) in clause (i), by striking ``for each of the years 2009
            through 2013'' and inserting ``for 2009''; and
                (2) clause (ii)--
                        (A) by striking ``and'' at the end of subclause
                    (III);
                        (B) by striking the period at the end of subclause
                    (IV) and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subclause:
                ``(V) the annual adjustment in the fee schedules determined
            under clause (i) for years beginning with 2010 shall be subject
            to the productivity adjustment described in section
            1886(b)(3)(B)(iii)(II).''.
        (e) Certain Durable Medical Equipment.--Section 1834(a)(14) of such
    Act (42 U.S.C. 1395m(a)(14)) is amended--
                (1) in subparagraph (K), by inserting before the semicolon
            at the end the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)'';
                (2) in subparagraph (L)(i), by inserting after ``June
            2013,'' the following: ``subject to the productivity adjustment
            described in section 1886(b)(3)(B)(iii)(II),'';
                (3) in subparagraph (L)(ii), by inserting after ``June
            2013'' the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)''; and
                (4) in subparagraph (M), by inserting before the period at
            the end the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)''.

                            PART 3--OTHER PROVISIONS

    SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.

        (a) In General.--Section 1834(a)(7)(A)(iii) of the Social Security
    Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is amended--
                (1) in the heading, by inserting ``certain complex
            rehabilitative'' after ``option for''; and
                (2) by striking ``power-driven wheelchair'' and inserting
            ``complex rehabilitative power-driven wheelchair recognized by
            the Secretary as classified within group 3 or higher''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect on January 1, 2011, and shall apply to power-driven
    wheelchairs furnished on or after such date. Such amendments shall not
    apply to contracts entered into under section 1847 of the Social
    Security Act (42 U.S.C. 1395w-3) pursuant to a bid submitted under such
    section before October 1, 2010, under subsection (a)(1)(B)(i)(I) of
    such section.

    SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.

         Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C.
    1395l(t)(16)(C)), as amended by section 142 of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 110-
    275), is amended by striking, the first place it appears, ``January 1,
    2010'' and inserting ``January 1, 2012''.

    SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.

        Not later than 12 months after the date of enactment of this Act,
    the Medicare Payment Advisory Commission shall submit to Congress a
    report on the following:
                (1) The scope of coverage for home infusion therapy in the
            fee-for-service Medicare program under title XVIII of the
            Social Security Act, Medicare Advantage under part C of such
            title, the veteran's health care program under chapter 17 of
            title 38, United States Code, and among private payers,
            including an analysis of the scope of services provided by home
            infusion therapy providers to their patients in such programs.
                (2) The benefits and costs of providing such coverage under
            the Medicare program, including a calculation of the potential
            savings achieved through avoided or shortened hospital and
            nursing home stays as a result of Medicare coverage of home
            infusion therapy.
                (3) An assessment of sources of data on the costs of home
            infusion therapy that might be used to construct payment
            mechanisms in the Medicare program.
                (4) Recommendations, if any, on the structure of a payment
            system under the Medicare program for home infusion therapy,
            including an analysis of the payment methodologies used under
            Medicare Advantage plans and private health plans for the
            provision of home infusion therapy and their applicability to
            the Medicare program.

    SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS (ASCS) TO SUBMIT COST
                  DATA AND OTHER DATA.

        (a) Cost Reporting.--
                (1) In general.--Section 1833(i) of the Social Security Act
            (42 U.S.C. 1395l(i)) is amended by adding at the end the
            following new paragraph:
        ``(8) The Secretary shall require, as a condition of the agreement
    described in section 1832(a)(2)(F)(i), the submission of such cost
    report as the Secretary may specify, taking into account the
    requirements for such reports under section 1815 in the case of a
    hospital.''.
                (2) Development of cost report.--Not later than 3 years
            after the date of the enactment of this Act, the Secretary of
            Health and Human Services shall develop a cost report form for
            use under section 1833(i)(8) of the Social Security Act, as
            added by paragraph (1).
                (3) Audit requirement.--The Secretary shall provide for
            periodic auditing of cost reports submitted under section
            1833(i)(8) of the Social Security Act, as added by paragraph
            (1).
                (4) Effective date.--The amendment made by paragraph (1)
            shall apply to agreements applicable to cost reporting periods
            beginning 18 months after the date the Secretary develops the
            cost report form under paragraph (2).
        (b) Additional Data on Quality.--
                (1) In general.--Section 1833(i)(7) of such Act (42 U.S.C.
            1395l(i)(7)) is amended--
                        (A) in subparagraph (B), by inserting ``subject to
                    subparagraph (C),'' after ``may otherwise provide,'';
                    and
                        (B) by adding at the end the following new
                    subparagraph:
        ``(C) Under subparagraph (B) the Secretary shall require the
    reporting of such additional data relating to quality of services
    furnished in an ambulatory surgical facility, including data on health
    care associated infections, as the Secretary may specify.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall to reporting for years beginning with 2012.

    SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

    SEC. 1146. MEDICARE IMPROVEMENT FUND.

        Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C.
    1395iii(b)(1)(A)) is amended to read as follows:
                        ``(A) the period beginning with fiscal year 2011
                    and ending with fiscal year 2019, $8,000,000,000;
                    and''.

    SEC. 1147. PAYMENT FOR IMAGING SERVICES.

        (a) Adjustment in Practice Expense to Reflect Higher Presumed
    Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w)
    is amended--
                (1) in subsection (b)(4)--
                        (A) in subparagraph (B), by striking ``subparagraph
                    (A)'' and inserting ``this paragraph''; and
                        (B) by adding at the end the following new
                    subparagraph:
                        ``(C) Adjustment in practice expense to reflect
                    higher presumed utilization.--In computing the number
                    of practice expense relative value units under
                    subsection (c)(2)(C)(ii) with respect to advanced
                    diagnostic imaging services (as defined in section
                    1834(e)(1)(B)) , the Secretary shall adjust such number
                    of units so it reflects a 75 percent (rather than 50
                    percent) presumed rate of utilization of imaging
                    equipment.''; and
                (2) in subsection (c)(2)(B)(v)(II), by inserting ``and
            other provisions'' after ``OPD payment cap''.
        (b) Adjustment in Technical Component ``discount'' on Single-
    session Imaging to Consecutive Body Parts.--Section 1848(b)(4) of such
    Act is further amended by adding at the end the following new
    subparagraph:
                        ``(D) Adjustment in technical component discount on
                    single-session imaging involving consecutive body
                    parts.--The Secretary shall increase the reduction in
                    expenditures attributable to the multiple procedure
                    payment reduction applicable to the technical component
                    for imaging under the final rule published by the
                    Secretary in the Federal Register on November 21, 2005
                    (part 405 of title 42, Code of Federal Regulations)
                    from 25 percent to 50 percent.''.
        (c) Effective Date.--Except as otherwise provided, this section,
    and the amendments made by this section, shall apply to services
    furnished on or after January 1, 2011.

    SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.

        (a) Waiver of Surety Bond Requirement.--Section 1834(a)(16) of the
    Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by adding at
    the end the following: ``The requirement for a surety bond described in
    subparagraph (B) shall not apply in the case of a pharmacy (i) that has
    been enrolled under section 1866(j) as a supplier of durable medical
    equipment, prosthetics, orthotics, and supplies and has been issued
    (which may include renewal of) a provider number (as described in the
    first sentence of this paragraph) for at least 5 years, and (ii) for
    which a final adverse action (as defined in section 424.57(a) of title
    42, Code of Federal Regulations) has never been imposed.''.
        (b) Ensuring Supply of Oxygen Equipment .--
                (1) In general.--Section 1834(a)(5)(F) of the Social
            Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                        (A) in clause (ii), by striking ``After the'' and
                    inserting ``Except as provided in clause (iii), after
                    the''; and
                        (B) by adding at the end the following new clause:
                                ``(iii) Continuation of supply.--In the
                            case of a supplier furnishing such equipment to
                            an individual under this subsection as of the
                            27th month of the 36 months described in clause
                            (i), the supplier furnishing such equipment as
                            of such month shall continue to furnish such
                            equipment to such individual (either directly
                            or though arrangements with other suppliers of
                            such equipment) during any subsequent period of
                            medical need for the remainder of the
                            reasonable useful lifetime of the equipment, as
                            determined by the Secretary, regardless of the
                            location of the individual, unless another
                            supplier has accepted responsibility for
                            continuing to furnish such equipment during the
                            remainder of such period.''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall take effect as of the date of the enactment of this Act
            and shall apply to the furnishing of equipment to individuals
            for whom the 27th month of a continuous period of use of oxygen
            equipment described in section 1834(a)(5)(F) of the Social
            Security Act occurs on or after July 1, 2010.
        (c) Treatment of Current Accreditation Applications.--Section
    1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is amended--
                (1) in clause (i)--
                        (A) by striking ``clause (ii)'' and inserting
                    ``clauses (ii) and (iii)''; and
                        (B) by striking ``and'' at the end;
                (2) by striking the period at the end of clause (ii)(II)
            and by inserting ``; and'';
                (3) by inserting after clause (ii) the following new
            clause:
                                ``(iii) the requirement for accreditation
                            described in clause (i) shall not apply for
                            purposes of supplying diabetic testing
                            supplies, canes, and crutches in the case of a
                            pharmacy that is enrolled under section 1866(j)
                            as a supplier of durable medical equipment,
                            prosthetics, orthotics, and supplies.''; and
                (4) by adding after and below clause (iii) the following:
                    ``Any supplier that has submitted an application for
                    accreditation before August 1, 2009, shall be deemed as
                    meeting applicable standards and accreditation
                    requirement under this subparagraph until such time as
                    the independent accreditation organization takes action
                    on the supplier's application.''.
        (d) Restoring 36-month Oxygen Rental Period in Case of Supplier
    Bankruptcy for Certain Individuals.--Section 1834(a)(5)(F) of such Act
    (42 U.S.C. 1395m(a)(5)(F)), as amended by subsection (b), is further
    amended by adding at the end the following new clause:
                                ``(iv) Exception for bankruptcy.--If a
                            supplier who furnishes oxygen and oxygen
                            equipment to an individual is declared bankrupt
                            and its assets are liquidated and at the time
                            of such declaration and liquidation more than
                            24 months of rental payments have been made,
                            such individual may begin a new 36-month rental
                            period under this subparagraph with another
                            supplier of oxygen.''.

    SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.

        (a) In General.--The Medicare Payment Advisory Commission shall
    conduct a study regarding bone mass measurement, including computed
    tomography, duel-energy x-ray absorptriometry, and vertebral fracture
    assessment. The study shall focus on the following:
                (1) An assessment of the adequacy of Medicare payment rates
            for such services, taking into account costs of acquiring the
            necessary equipment, professional work time, and practice
            expense costs.
                (2) The impact of Medicare payment changes since 2006 on
            beneficiary access to bone mass measurement benefits in general
            and in rural and minority communities specifically.
                (3) A review of the clinically appropriate and recommended
            use among Medicare beneficiaries and how usage rates among such
            beneficiaries compares to such recommendations.
                (4) In conjunction with the findings under (3),
            recommendations, if necessary, regarding methods for reaching
            appropriate use of bone mass measurement studies among Medicare
            beneficiaries.
        (b) Report.--The Commission shall submit a report to the Congress,
    not later than 9 months after the date of the enactment of this Act,
    containing a description of the results of the study conducted under
    subsection (a) and the conclusions and recommendations, if any,
    regarding each of the issues described in paragraphs (1), (2) (3) and
    (4) of such subsection.

            Subtitle C--Provisions Related to Medicare Parts A and B

    SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.

        (a) Hospitals.--
                (1) In general.--Section 1886 of the Social Security Act
            (42 U.S.C. 1395ww), as amended by section 1103(a), is amended
            by adding at the end the following new subsection:
        ``(p) Adjustment to Hospital Payments for Excess Readmissions.--
                ``(1) In general.--With respect to payment for discharges
            from an applicable hospital (as defined in paragraph (5)(C))
            occurring during a fiscal year beginning on or after October 1,
            2011, in order to account for excess readmissions in the
            hospital, the Secretary shall reduce the payments that would
            otherwise be made to such hospital under subsection (d) (or
            section 1814(b)(3), as the case may be) for such a discharge by
            an amount equal to the product of--
                        ``(A) the base operating DRG payment amount (as
                    defined in paragraph (2)) for the discharge; and
                        ``(B) the adjustment factor (described in paragraph
                    (3)(A)) for the hospital for the fiscal year.
                ``(2) Base operating drg payment amount.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), for purposes of this subsection, the
                    term `base operating DRG payment amount' means, with
                    respect to a hospital for a fiscal year, the payment
                    amount that would otherwise be made under subsection
                    (d) for a discharge if this subsection did not apply,
                    reduced by any portion of such amount that is
                    attributable to payments under subparagraphs (B) and
                    (F) of paragraph (5).
                        ``(B) Adjustments.--For purposes of subparagraph
                    (A), in the case of a hospital that is paid under
                    section 1814(b)(3), the term `base operating DRG
                    payment amount' means the payment amount under such
                    section.
                ``(3) Adjustment factor.--
                        ``(A) In general.--For purposes of paragraph (1),
                    the adjustment factor under this paragraph for an
                    applicable hospital for a fiscal year is equal to the
                    greater of--
                                ``(i) the ratio described in subparagraph
                            (B) for the hospital for the applicable period
                            (as defined in paragraph (5)(D)) for such
                            fiscal year; or
                                ``(ii) the floor adjustment factor
                            specified in subparagraph (C).
                        ``(B) Ratio.--The ratio described in this
                    subparagraph for a hospital for an applicable period is
                    equal to 1 minus the ratio of--
                                ``(i) the aggregate payments for excess
                            readmissions (as defined in paragraph (4)(A))
                            with respect to an applicable hospital for the
                            applicable period; and
                                ``(ii) the aggregate payments for all
                            discharges (as defined in paragraph (4)(B))
                            with respect to such applicable hospital for
                            such applicable period.
                        ``(C) Floor adjustment factor.--For purposes of
                    subparagraph (A), the floor adjustment factor specified
                    in this subparagraph for--
                                ``(i) fiscal year 2012 is 0.99;
                                ``(ii) fiscal year 2013 is 0.98;
                                ``(iii) fiscal year 2014 is 0.97; or
                                ``(iv) a subsequent fiscal year is 0.95.
                ``(4) Aggregate payments, excess readmission ratio
            defined.--For purposes of this subsection:
                        ``(A) Aggregate payments for excess readmissions.--
                    The term `aggregate payments for excess readmissions'
                    means, for a hospital for a fiscal year, the sum, for
                    applicable conditions (as defined in paragraph (5)(A)),
                    of the product, for each applicable condition, of--
                                ``(i) the base operating DRG payment amount
                            for such hospital for such fiscal year for such
                            condition;
                                ``(ii) the number of admissions for such
                            condition for such hospital for such fiscal
                            year; and
                                ``(iii) the excess readmissions ratio (as
                            defined in subparagraph (C)) for such hospital
                            for the applicable period for such fiscal year
                            minus 1.
                        ``(B) Aggregate payments for all discharges.--The
                    term `aggregate payments for all discharges' means, for
                    a hospital for a fiscal year, the sum of the base
                    operating DRG payment amounts for all discharges for
                    all conditions from such hospital for such fiscal year.
                        ``(C) Excess readmission ratio.--
                                ``(i) In general.--Subject to clauses (ii)
                            and (iii), the term `excess readmissions ratio'
                            means, with respect to an applicable condition
                            for a hospital for an applicable period, the
                            ratio (but not less than 1.0) of--
                                        ``(I) the risk adjusted
                                    readmissions based on actual
                                    readmissions, as determined consistent
                                    with a readmission measure methodology
                                    that has been endorsed under paragraph
                                    (5)(A)(ii)(I), for an applicable
                                    hospital for such condition with
                                    respect to the applicable period; to
                                        ``(II) the risk adjusted expected
                                    readmissions (as determined consistent
                                    with such a methodology) for such
                                    hospital for such condition with
                                    respect to such applicable period.
                                ``(ii) Exclusion of certain readmissions.--
                            For purposes of clause (i), with respect to a
                            hospital, excess readmissions shall not include
                            readmissions for an applicable condition for
                            which there are fewer than a minimum number (as
                            determined by the Secretary) of discharges for
                            such applicable condition for the applicable
                            period and such hospital.
                                ``(iii) Adjustment.--In order to promote a
                            reduction over time in the overall rate of
                            readmissions for applicable conditions, the
                            Secretary may provide, beginning with
                            discharges for fiscal year 2014, for the
                            determination of the excess readmissions ratio
                            under subparagraph (C) to be based on a ranking
                            of hospitals by readmission ratios (from lower
                            to higher readmission ratios) normalized to a
                            benchmark that is lower than the 50th
                            percentile.
                ``(5) Definitions.--For purposes of this subsection:
                        ``(A) Applicable condition.--The term `applicable
                    condition' means, subject to subparagraph (B), a
                    condition or procedure selected by the Secretary among
                    conditions and procedures for which--
                                ``(i) readmissions (as defined in
                            subparagraph (E)) that represent conditions or
                            procedures that are high volume or high
                            expenditures under this title (or other
                            criteria specified by the Secretary); and
                                ``(ii) measures of such readmissions--
                                        ``(I) have been endorsed by the
                                    entity with a contract under section
                                    1890(a); and
                                        ``(II) such endorsed measures have
                                    appropriate exclusions for readmissions
                                    that are unrelated to the prior
                                    discharge (such as a planned
                                    readmission or transfer to another
                                    applicable hospital).
                        ``(B) Expansion of applicable conditions.--
                    Beginning with fiscal year 2013, the Secretary shall
                    expand the applicable conditions beyond the 3
                    conditions for which measures have been endorsed as
                    described in subparagraph (A)(ii)(I) as of the date of
                    the enactment of this subsection to the additional 4
                    conditions that have been so identified by the Medicare
                    Payment Advisory Commission in its report to Congress
                    in June 2007 and to other conditions and procedures
                    which may include an all-condition measure of
                    readmissions, as determined appropriate by the
                    Secretary. In expanding such applicable conditions, the
                    Secretary shall seek the endorsement described in
                    subparagraph (A)(ii)(I) but may apply such measures
                    without such an endorsement.
                        ``(C) Applicable hospital.--The term `applicable
                    hospital' means a subsection (d) hospital or a hospital
                    that is paid under section 1814(b)(3).
                        ``(D) Applicable period.--The term `applicable
                    period' means, with respect to a fiscal year, such
                    period as the Secretary shall specify for purposes of
                    determining excess readmissions.
                        ``(E) Readmission.--The term `readmission' means,
                    in the case of an individual who is discharged from an
                    applicable hospital, the admission of the individual to
                    the same or another applicable hospital within a time
                    period specified by the Secretary from the date of such
                    discharge. Insofar as the discharge relates to an
                    applicable condition for which there is an endorsed
                    measure described in subparagraph (A)(ii)(I), such time
                    period (such as 30 days) shall be consistent with the
                    time period specified for such measure.
                ``(6) Limitations on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise of--
                        ``(A) the determination of base operating DRG
                    payment amounts;
                        ``(B) the methodology for determining the
                    adjustment factor under paragraph (3), including excess
                    readmissions ratio under paragraph (4)(C), aggregate
                    payments for excess readmissions under paragraph
                    (4)(A), and aggregate payments for all discharges under
                    paragraph (4)(B), and applicable periods and applicable
                    conditions under paragraph (5);
                        ``(C) the measures of readmissions as described in
                    paragraph (5)(A)(ii); and
                        ``(D) the determination of a targeted hospital
                    under paragraph (8)(B)(i), the increase in payment
                    under paragraph (8)(B)(ii), the aggregate cap under
                    paragraph (8)(C)(i), the hospital-specific limit under
                    paragraph (8)(C)(ii), and the form of payment made by
                    the Secretary under paragraph (8)(D).
                ``(7) Monitoring inappropriate changes in admissions
            practices.--The Secretary shall monitor the activities of
            applicable hospitals to determine if such hospitals have taken
            steps to avoid patients at risk in order to reduce the
            likelihood of increasing readmissions for applicable
            conditions. If the Secretary determines that such a hospital
            has taken such a step, after notice to the hospital and
            opportunity for the hospital to undertake action to alleviate
            such steps, the Secretary may impose an appropriate sanction.
                ``(8) Assistance to certain hospitals.--
                        ``(A) In general.--For purposes of providing funds
                    to applicable hospitals to take steps described in
                    subparagraph (E) to address factors that may impact
                    readmissions of individuals who are discharged from
                    such a hospital, for fiscal years beginning on or after
                    October 1, 2011, the Secretary shall make a payment
                    adjustment for a hospital described in subparagraph
                    (B), with respect to each such fiscal year, by a
                    percent estimated by the Secretary to be consistent
                    with subparagraph (C).
                        ``(B) Targeted hospitals.--Subparagraph (A) shall
                    apply to an applicable hospital that--
                                ``(i) received (or, in the case of an
                            1814(b)(3) hospital, otherwise would have been
                            eligible to receive) $10,000,000 or more in
                            disproportionate share payments using the
                            latest available data as estimated by the
                            Secretary; and
                                ``(ii) provides assurances satisfactory to
                            the Secretary that the increase in payment
                            under this paragraph shall be used for purposes
                            described in subparagraph (E).
                        ``(C) Caps.--
                                ``(i) Aggregate cap.--The aggregate amount
                            of the payment adjustment under this paragraph
                            for a fiscal year shall not exceed 5 percent of
                            the estimated difference in the spending that
                            would occur for such fiscal year with and
                            without application of the adjustment factor
                            described in paragraph (3) and applied pursuant
                            to paragraph (1).
                                ``(ii) Hospital-specific limit.--The
                            aggregate amount of the payment adjustment for
                            a hospital under this paragraph shall not
                            exceed the estimated difference in spending
                            that would occur for such fiscal year for such
                            hospital with and without application of the
                            adjustment factor described in paragraph (3)
                            and applied pursuant to paragraph (1).
                        ``(D) Form of payment.--The Secretary may make the
                    additional payments under this paragraph on a lump sum
                    basis, a periodic basis, a claim by claim basis, or
                    otherwise.
                        ``(E) Use of additional payment.--Funding under
                    this paragraph shall be used by targeted hospitals for
                    transitional care activities designed to address the
                    patient noncompliance issues that result in higher than
                    normal readmission rates, such as one or more of the
                    following:
                                ``(i) Providing care coordination services
                            to assist in transitions from the targeted
                            hospital to other settings.
                                ``(ii) Hiring translators and interpreters.
                                ``(iii) Increasing services offered by
                            discharge planners.
                                ``(iv) Ensuring that individuals receive a
                            summary of care and medication orders upon
                            discharge.
                                ``(v) Developing a quality improvement plan
                            to assess and remedy preventable readmission
                            rates.
                                ``(vi) Assigning discharged individuals to
                            a medical home.
                                ``(vii) Doing other activities as
                            determined appropriate by the Secretary.
                        ``(F) GAO report on use of funds.--Not later than 3
                    years after the date on which funds are first made
                    available under this paragraph, the Comptroller General
                    of the United States shall submit to Congress a report
                    on the use of such funds.
                        ``(G) Disproportionate share hospital payment.--In
                    this paragraph, the term `disproportionate share
                    hospital payment' means an additional payment amount
                    under subsection (d)(5)(F).''.
        (b) Application to Critical Access Hospitals.--Section 1814(l) of
    the Social Security Act (42 U.S.C. 1395f(l)) is amended--
                (1) in paragraph (5)--
                        (A) by striking ``and'' at the end of subparagraph
                    (C);
                        (B) by striking the period at the end of
                    subparagraph (D) and inserting ``; and'';
                        (C) by inserting at the end the following new
                    subparagraph:
                ``(E) the methodology for determining the adjustment factor
            under paragraph (5), including the determination of aggregate
            payments for actual and expected readmissions, applicable
            periods, applicable conditions and measures of readmissions.'';
            and
                        (D) by redesignating such paragraph as paragraph
                    (6); and
                (2) by inserting after paragraph (4) the following new
            paragraph:
        ``(5) The adjustment factor described in section 1886(p)(3) shall
    apply to payments with respect to a critical access hospital with
    respect to a cost reporting period beginning in fiscal year 2012 and
    each subsequent fiscal year (after application of paragraph (4) of this
    subsection) in a manner similar to the manner in which such section
    applies with respect to a fiscal year to an applicable hospital as
    described in section 1886(p)(2).''.
        (c) Post Acute Care Providers.--
                (1) Interim policy.--
                        (A) In general.--With respect to a readmission to
                    an applicable hospital or a critical access hospital
                    (as described in section 1814(l) of the Social Security
                    Act) from a post acute care provider (as defined in
                    paragraph (3)) and such a readmission is not governed
                    by section 412.531 of title 42, Code of Federal
                    Regulations, if the claim submitted by such a post-
                    acute care provider under title XVIII of the Social
                    Security Act indicates that the individual was
                    readmitted to a hospital from such a post-acute care
                    provider or admitted from home and under the care of a
                    home health agency within 30 days of an initial
                    discharge from an applicable hospital or critical
                    access hospital, the payment under such title on such
                    claim shall be the applicable percent specified in
                    subparagraph (B) of the payment that would otherwise be
                    made under the respective payment system under such
                    title for such post-acute care provider if this
                    subsection did not apply.
                        (B) Applicable percent defined.--For purposes of
                    subparagraph (A), the applicable percent is--
                                (i) for fiscal or rate year 2012 is 0.996;
                                (ii) for fiscal or rate year 2013 is 0.993;
                            and
                                (iii) for fiscal or rate year 2014 is 0.99.
                        (C) Effective date.--Subparagraph (1) shall apply
                    to discharges or services furnished (as the case may be
                    with respect to the applicable post acute care
                    provider) on or after the first day of the fiscal year
                    or rate year, beginning on or after October 1, 2011,
                    with respect to the applicable post acute care
                    provider.
                (2) Development and application of performance measures.--
                        (A) In general.--The Secretary of Health and Human
                    Services shall develop appropriate measures of
                    readmission rates for post acute care providers. The
                    Secretary shall seek endorsement of such measures by
                    the entity with a contract under section 1890(a) of the
                    Social Security Act but may adopt and apply such
                    measures under this paragraph without such an
                    endorsement. The Secretary shall expand such measures
                    in a manner similar to the manner in which applicable
                    conditions are expanded under paragraph (5)(B) of
                    section 1886(p) of the Social Security Act, as added by
                    subsection (a).
                        (B) Implementation.--The Secretary shall apply, on
                    or after October 1, 2014, with respect to post acute
                    care providers, policies similar to the policies
                    applied with respect to applicable hospitals and
                    critical access hospitals under the amendments made by
                    subsection (a). The provisions of paragraph (1) shall
                    apply with respect to any period on or after October 1,
                    2014, and before such application date described in the
                    previous sentence in the same manner as such provisions
                    apply with respect to fiscal or rate year 2014.
                        (C) Monitoring and penalties.--The provisions of
                    paragraph (7) of such section 1886(p) shall apply to
                    providers under this paragraph in the same manner as
                    they apply to hospitals under such section.
                (3) Definitions.--For purposes of this subsection:
                        (A) Post acute care provider.--The term ``post
                    acute care provider'' means--
                                (i) a skilled nursing facility (as defined
                            in section 1819(a) of the Social Security Act);
                                (ii) an inpatient rehabilitation facility
                            (described in section 1886(h)(1)(A) of such
                            Act);
                                (iii) a home health agency (as defined in
                            section 1861(o) of such Act); and
                                (iv) a long term care hospital (as defined
                            in section 1861(ccc) of such Act).
                        (B) Other terms .--The terms ``applicable
                    condition'', ``applicable hospital'', and
                    ``readmission'' have the meanings given such terms in
                    section 1886(p)(5) of the Social Security Act, as added
                    by subsection (a)(1).
        (d) Physicians.--
                (1) Study.--The Secretary of Health and Human Services
            shall conduct a study to determine how the readmissions policy
            described in the previous subsections could be applied to
            physicians.
                (2) Considerations.--In conducting the study, the Secretary
            shall consider approaches such as--
                        (A) creating a new code (or codes) and payment
                    amount (or amounts) under the fee schedule in section
                    1848 of the Social Security Act (in a budget neutral
                    manner) for services furnished by an appropriate
                    physician who sees an individual within the first week
                    after discharge from a hospital or critical access
                    hospital;
                        (B) developing measures of rates of readmission for
                    individuals treated by physicians;
                        (C) applying a payment reduction for physicians who
                    treat the patient during the initial admission that
                    results in a readmission; and
                        (D) methods for attributing payments or payment
                    reductions to the appropriate physician or physicians.
                (3) Report.--The Secretary shall issue a public report on
            such study not later than the date that is one year after the
            date of the enactment of this Act.
        (e) Funding.--For purposes of carrying out the provisions of this
    section, in addition to funds otherwise available, out of any funds in
    the Treasury not otherwise appropriated, there are appropriated to the
    Secretary of Health and Human Services for the Center for Medicare &
    Medicaid Services Program Management Account $25,000,000 for each
    fiscal year beginning with 2010. Amounts appropriated under this
    subsection for a fiscal year shall be available until expended.

    SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING
                  PILOT PROGRAM.

        (a) Plan.--
                (1) In general.--The Secretary of Health and Human Services
            (in this section referred to as the ``Secretary'') shall
            develop a detailed plan to reform payment for post acute care
            (PAC) services under the Medicare program under title XVIII of
            the Social Security Act (in this section referred to as the
            ``Medicare program)''. The goals of such payment reform are
            to--
                        (A) improve the coordination, quality, and
                    efficiency of such services; and
                        (B) improve outcomes for individuals such as
                    reducing the need for readmission to hospitals from
                    providers of such services.
                (2) Bundling post acute services.--The plan described in
            paragraph (1) shall include detailed specifications for a
            bundled payment for post acute services (in this section
            referred to as the ``post acute care bundle''), and may include
            other approaches determined appropriate by the Secretary.
                (3) Post acute services.--For purposes of this section, the
            term ``post acute services'' means services for which payment
            may be made under the Medicare program that are furnished by
            skilled nursing facilities, inpatient rehabilitation
            facilities, long term care hospitals, hospital based outpatient
            rehabilitation facilities and home health agencies to an
            individual after discharge of such individual from a hospital,
            and such other services determined appropriate by the
            Secretary.
        (b) Details.--The plan described in subsection (a)(1) shall include
    consideration of the following issues:
                (1) The nature of payments under a post acute care bundle,
            including the type of provider or entity to whom payment should
            be made, the scope of activities and services included in the
            bundle, whether payment for physicians' services should be
            included in the bundle, and the period covered by the bundle.
                (2) Whether the payment should be consolidated with the
            payment under the inpatient prospective system under section
            1886 of the Social Security Act (in this section referred to as
            MS-DRGs) or a separate payment should be established for such
            bundle, and if a separate payment is established, whether it
            should be made only upon use of post acute care services or for
            every discharge.
                (3) Whether the bundle should be applied across all
            categories of providers of inpatient services (including
            critical access hospitals) and post acute care services or
            whether it should be limited to certain categories of
            providers, services, or discharges, such as high volume or high
            cost MS-DRGs.
                (4) The extent to which payment rates could be established
            to achieve offsets for efficiencies that could be expected to
            be achieved with a bundle payment, whether such rates should be
            established on a national basis or for different geographic
            areas, should vary according to discharge, case mix, outliers,
            and geographic differences in wages or other appropriate
            adjustments, and how to update such rates.
                (5) The nature of protections needed for individuals under
            a system of bundled payments to ensure that individuals receive
            quality care, are furnished the level and amount of services
            needed as determined by an appropriate assessment instrument,
            are offered choice of provider, and the extent to which
            transitional care services would improve quality of care for
            individuals and the functioning of a bundled post-acute system.
                (6) The nature of relationships that may be required
            between hospitals and providers of post acute care services to
            facilitate bundled payments, including the application of
            gainsharing, anti-referral, anti-kickback, and anti-trust laws.
                (7) Quality measures that would be appropriate for
            reporting by hospitals and post acute providers (such as
            measures that assess changes in functional status and quality
            measures appropriate for each type of post acute services
            provider including how the reporting of such quality measures
            could be coordinated with other reporting of such quality
            measures by such providers otherwise required).
                (8) How cost-sharing for a post acute care bundle should be
            treated relative to current rules for cost-sharing for
            inpatient hospital, home health, skilled nursing facility, and
            other services.
                (9) How other programmatic issues should be treated in a
            post acute care bundle, including rules specific to various
            types of post-acute providers such as the post-acute transfer
            policy, three-day hospital stay to qualify for services
            furnished by skilled nursing facilities, and the coordination
            of payments and care under the Medicare program and the
            Medicaid program.
                (10) Such other issues as the Secretary deems appropriate.
        (c) Consultations and Analysis.--
                (1) Consultation with stakeholders.--In developing the plan
            under subsection (a)(1), the Secretary shall consult with
            relevant stakeholders and shall consider experience with such
            research studies and demonstrations that the Secretary
            determines appropriate.
                (2) Analysis and data collection.--In developing such plan,
            the Secretary shall--
                        (A) analyze the issues described in subsection (b)
                    and other issues that the Secretary determines
                    appropriate;
                        (B) analyze the impacts (including geographic
                    impacts) of post acute service reform approaches,
                    including bundling of such services on individuals,
                    hospitals, post acute care providers, and physicians;
                        (C) use existing data (such as data submitted on
                    claims) and collect such data as the Secretary
                    determines are appropriate to develop such plan
                    required in this section; and
                        (D) if patient functional status measures are
                    appropriate for the analysis, to the extent practical,
                    build upon the CARE tool being developed pursuant to
                    section 5008 of the Deficit Reduction Act of 2005.
        (d) Administration.--
                (1) Funding.--For purposes of carrying out the provisions
            of this section, in addition to funds otherwise available, out
            of any funds in the Treasury not otherwise appropriated, there
            are appropriated to the Secretary for the Center for Medicare &
            Medicaid Services Program Management Account $15,000,000 for
            each of the fiscal years 2010 through 2012. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                (2) Expedited data collection.--Chapter 35 of title 44,
            United States Code shall not apply to this section.
        (e) Public Reports.--
                (1) Interim reports.--The Secretary shall issue interim
            public reports on a periodic basis on the plan described in
            subsection (a)(1), the issues described in subsection (b), and
            impact analyses as the Secretary determines appropriate.
                (2) Final report.--Not later than the date that is 3 years
            after the date of the enactment of this Act, the Secretary
            shall issue a final public report on such plan, including
            analysis of issues described in subsection (b) and impact
            analyses.
        (f) Conversion of Acute Care Episode Demonstration to Pilot Program
    and Expansion to Include Post Acute Services.--
                (1) In general.--Part E of title XVIII of the Social
            Security Act is amended by inserting after section 1866C the
            following new section:

     ``conversion of acute care episode demonstration to pilot program and
                    expansion to include post acute services

        ``Sec. 1866D.  (a) Conversion and Expansion.--
                ``(1) In general.--By not later than January 1, 2011, the
            Secretary shall, for the purpose of promoting the use of
            bundled payments to promote efficient and high quality delivery
            of care--
                        ``(A) convert the acute care episode demonstration
                    program conducted under section 1866C to a pilot
                    program; and
                        ``(B) subject to subsection (c), expand such
                    program as so converted to include post acute services
                    and such other services the Secretary determines to be
                    appropriate, which may include transitional services.
                ``(2) Bundled payment structures.--
                        ``(A) In general.--In carrying out paragraph (1),
                    the Secretary may apply bundled payments with respect
                    to--
                                ``(i) hospitals and physicians;
                                ``(ii) hospitals and post-acute care
                            providers;
                                ``(iii) hospitals, physicians, and post-
                            acute care providers; or
                                ``(iv) combinations of post-acute
                            providers.
                        ``(B) Further application.--
                                ``(i) In general.--In carrying out
                            paragraph (1), the Secretary shall apply
                            bundled payments in a manner so as to include
                            collaborative care networks and continuing care
                            hospitals.
                                ``(ii) Collaborative care network
                            defined.--For purposes of this subparagraph,
                            the term `collaborative care network' means a
                            consortium of health care providers that
                            provides a comprehensive range of coordinated
                            and integrated health care services to low-
                            income patient populations (including the
                            uninsured) which may include coordinated and
                            comprehensive care by safety net providers to
                            reduce any unnecessary use of items and
                            services furnished in emergency departments,
                            manage chronic conditions, improve quality and
                            efficiency of care, increase preventive
                            services, and promote adherence to post-acute
                            and follow-up care plans.
                                ``(iii) Continuing care hospital defined.--
                            For purposes of this subparagraph, the term
                            `continuing care hospital' means an entity that
                            has demonstrated the ability to meet patient
                            care and patient safety standards and that
                            provides under common management the medical
                            and rehabilitation services provided in
                            inpatient rehabilitation hospitals and units
                            (as defined in section 1886(d)(1)(B)(ii)),
                            long-term care hospitals (as defined in section
                            1886(d)(1)(B)(iv)(I)), and skilled nursing
                            facilities (as defined in section 1819(a)) that
                            are located in a hospital described in section
                            1886(d).
        ``(b) Scope.--The pilot program under subsection (a) may include
    additional geographic areas and additional conditions which account for
    significant program spending, as defined by the Secretary. Nothing in
    this subsection shall be construed as limiting the number of hospital
    and physician groups or the number of hospital and post-acute provider
    groups that may participate in the pilot program.
        ``(c) Limitation.--The Secretary shall only expand the pilot
    program under subsection (a) if the Secretary finds that--
                ``(1) the demonstration program under section 1866C and
            pilot program under this section maintain or increase the
            quality of care received by individuals enrolled under this
            title; and
                ``(2) such demonstration program and pilot program reduce
            program expenditures and, based on the certification under
            subsection (d), that the expansion of such pilot program would
            result in estimated spending that would be less than what
            spending would otherwise be in the absence of this section.
        ``(d) Certification.--For purposes of subsection (c), the Chief
    Actuary of the Centers for Medicare & Medicaid Services shall certify
    whether expansion of the pilot program under this section would result
    in estimated spending that would be less than what spending would
    otherwise be in the absence of this section.
        ``(e) Voluntary Participation.--Nothing in this paragraph shall be
    construed as requiring the participation of an entity in the pilot
    program under this section.
        ``(f) Evaluation on Cost and Quality of Care.--The Secretary shall
    conduct an evaluation of the pilot program under subsection (a) to
    study the effect of such program on costs and quality of care. The
    findings of such evaluation shall be included in the final report
    required under section 1152(e)(2) of America's Affordable Health
    Choices Act of 2009.
        ``(g) Study of Additional Bundling and Episode-based Payment for
    Physicians' Services.--
                ``(1) In general.--The Secretary shall provide for a study
            of and development of a plan for testing additional ways to
            increase bundling of payments for physicians in connection with
            an episode of care, such as in connection with outpatient
            hospital services or services rendered in physicians' offices,
            other than those provided under the pilot program.
                ``(2) Application.--The Secretary may implement such a plan
            through a demonstration program.''.
                (2) Conforming amendment.--Section 1866C(b) of the Social
            Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking
            ``The Secretary'' and inserting ``Subject to section 1866D, the
            Secretary''.

    SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.

        Section 1895(b)(3)(B)(ii) of the Social Security Act (42 U.S.C.
    1395fff(b)(3)(B)(ii)) is amended--
                (1) in subclause (IV), by striking ``and'';
                (2) by redesignating subclause (V) as subclause (VII); and
                (3) by inserting after subclause (IV) the following new
            subclauses:
                                        ``(V) 2007, 2008, and 2009, subject
                                    to clause (v), the home health market
                                    basket percentage increase;
                                        ``(VI) 2010, subject to clause (v),
                                    0 percent; and''.

    SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

        (a) Acceleration of Adjustment for Case Mix Changes.--Section
    1895(b)(3)(B) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B))
    is amended--
                (1) in clause (iv), by striking ``Insofar as'' and
            inserting ``Subject to clause (vi), insofar as''; and
                (2) by adding at the end the following new clause:
                                ``(vi) Special rule for case mix changes
                            for 2011.--
                                        ``(I) In general.--With respect to
                                    the case mix adjustments established in
                                    section 484.220(a) of title 42, Code of
                                    Federal Regulations, the Secretary
                                    shall apply, in 2010, the adjustment
                                    established in paragraph (3) of such
                                    section for 2011, in addition to
                                    applying the adjustment established in
                                    paragraph (2) for 2010.
                                        ``(II) Construction.--Nothing in
                                    this clause shall be construed as
                                    limiting the amount of adjustment for
                                    case mix for 2010 or 2011 if more
                                    recent data indicate an appropriate
                                    adjustment that is greater than the
                                    amount established in the section
                                    described in subclause (I).''.
        (b) Rebasing Home Health Prospective Payment Amount.--Section
    1895(b)(3)(A) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A))
    is amended--
                (1) in clause (i)--
                        (A) in subclause (III), by inserting ``and before
                    2011'' after ``after the period described in subclause
                    (II)''; and
                        (B) by inserting after subclause (III) the
                    following new subclauses:
                                        ``(IV) Subject to clause (iii)(I),
                                    for 2011, such amount (or amounts)
                                    shall be adjusted by a uniform
                                    percentage determined to be appropriate
                                    by the Secretary based on analysis of
                                    factors such as changes in the average
                                    number and types of visits in an
                                    episode, the change in intensity of
                                    visits in an episode, growth in cost
                                    per episode, and other factors that the
                                    Secretary considers to be relevant.
                                        ``(V) Subject to clause (iii)(II),
                                    for a year after 2011, such a amount
                                    (or amounts) shall be equal to the
                                    amount (or amounts) determined under
                                    this clause for the previous year,
                                    updated under subparagraph (B).''; and
                (2) by adding at the end the following new clause:
                                ``(iii) Special rule in case of inability
                            to effect timely rebasing.--
                                        ``(I) Application of proxy amount
                                    for 2011.--If the Secretary is not able
                                    to compute the amount (or amounts)
                                    under clause (i)(IV) so as to permit,
                                    on a timely basis, the application of
                                    such clause for 2011, the Secretary
                                    shall substitute for such amount (or
                                    amounts) 95 percent of the amount (or
                                    amounts) that would otherwise be
                                    specified under clause (i)(III) if it
                                    applied for 2011.
                                        ``(II) Adjustment for subsequent
                                    years based on data.--If the Secretary
                                    applies subclause (I), the Secretary
                                    before July 1, 2011, shall compare the
                                    amount (or amounts) applied under such
                                    subclause with the amount (or amounts)
                                    that should have been applied under
                                    clause (i)(IV). The Secretary shall
                                    decrease or increase the prospective
                                    payment amount (or amounts) under
                                    clause (i)(V) for 2012 (or, at the
                                    Secretary's discretion, over a period
                                    of several years beginning with 2012)
                                    by the amount (if any) by which the
                                    amount (or amounts) applied under
                                    subclause (I) is greater or less,
                                    respectively, than the amount (or
                                    amounts) that should have been applied
                                    under clause (i)(IV).''.

    SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATE FOR HOME HEALTH SERVICES.

        (a) In General.--Section 1895(b)(3)(B) of the Social Security Act
    (42 U.S.C. 1395fff(b)(3)(B)) is amended--
                (1) in clause (iii), by inserting ``(including being
            subject to the productivity adjustment described in section
            1886(b)(3)(B)(iii)(II))'' after ``in the same manner''; and
                (2) in clause (v)(I), by inserting ``(but not below 0)''
            after ``reduced''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to home health market basket percentage increases for years
    beginning with 2010.

    SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE PROHIBITION ON
                  CERTAIN PHYSICIAN REFERRALS MADE TO HOSPITALS.

        (a) In General.--Section 1877 of the Social Security Act (42 U.S.C.
    1395nn) is amended--
                (1) in subsection (d)(2)--
                        (A) in subparagraph (A), by striking ``and'' at the
                    end;
                        (B) in subparagraph (B), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(C) in the case where the entity is a hospital,
                    the hospital meets the requirements of paragraph
                    (3)(D).'';
                (2) in subsection (d)(3)--
                        (A) in subparagraph (B), by striking ``and'' at the
                    end;
                        (B) in subparagraph (C), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(D) the hospital meets the requirements described
                    in subsection (i)(1).'';
                (3) by amending subsection (f) to read as follows:
        ``(f) Reporting and Disclosure Requirements.--
                ``(1) In general.--Each entity providing covered items or
            services for which payment may be made under this title shall
            provide the Secretary with the information concerning the
            entity's ownership, investment, and compensation arrangements,
            including--
                        ``(A) the covered items and services provided by
                    the entity, and
                        ``(B) the names and unique physician identification
                    numbers of all physicians with an ownership or
                    investment interest (as described in subsection
                    (a)(2)(A)), or with a compensation arrangement (as
                    described in subsection (a)(2)(B)), in the entity, or
                    whose immediate relatives have such an ownership or
                    investment interest or who have such a compensation
                    relationship with the entity.
            Such information shall be provided in such form, manner, and at
            such times as the Secretary shall specify. The requirement of
            this subsection shall not apply to designated health services
            provided outside the United States or to entities which the
            Secretary determines provide services for which payment may be
            made under this title very infrequently.
                ``(2) Requirements for hospitals with physician ownership
            or investment.--In the case of a hospital that meets the
            requirements described in subsection (i)(1), the hospital
            shall--
                        ``(A) submit to the Secretary an initial report,
                    and periodic updates at a frequency determined by the
                    Secretary, containing a detailed description of the
                    identity of each physician owner and physician investor
                    and any other owners or investors of the hospital;
                        ``(B) require that any referring physician owner or
                    investor discloses to the individual being referred, by
                    a time that permits the individual to make a meaningful
                    decision regarding the receipt of services, as
                    determined by the Secretary, the ownership or
                    investment interest, as applicable, of such referring
                    physician in the hospital; and
                        ``(C) disclose the fact that the hospital is
                    partially or wholly owned by one or more physicians or
                    has one or more physician investors--
                                ``(i) on any public website for the
                            hospital; and
                                ``(ii) in any public advertising for the
                            hospital.
            The information to be reported or disclosed under this
            paragraph shall be provided in such form, manner, and at such
            times as the Secretary shall specify. The requirements of this
            paragraph shall not apply to designated health services
            furnished outside the United States or to entities which the
            Secretary determines provide services for which payment may be
            made under this title very infrequently.
                ``(3) Publication of information.--The Secretary shall
            publish, and periodically update, the information submitted by
            hospitals under paragraph (2)(A) on the public Internet website
            of the Centers for Medicare & Medicaid Services.'';
                (4) by amending subsection (g)(5) to read as follows:
                ``(5) Failure to report or disclose information.--
                        ``(A) Reporting.--Any person who is required, but
                    fails, to meet a reporting requirement of paragraphs
                    (1) and (2)(A) of subsection (f) is subject to a civil
                    money penalty of not more than $10,000 for each day for
                    which reporting is required to have been made.
                        ``(B) Disclosure.--Any physician who is required,
                    but fails, to meet a disclosure requirement of
                    subsection (f)(2)(B) or a hospital that is required,
                    but fails, to meet a disclosure requirement of
                    subsection (f)(2)(C) is subject to a civil money
                    penalty of not more than $10,000 for each case in which
                    disclosure is required to have been made.
                        ``(C) Application.--The provisions of section 1128A
                    (other than the first sentence of subsection (a) and
                    other than subsection (b)) shall apply to a civil money
                    penalty under subparagraphs (A) and (B) in the same
                    manner as such provisions apply to a penalty or
                    proceeding under section 1128A(a).''; and
                (5) by adding at the end the following new subsection:
        ``(i) Requirements to Qualify for Rural Provider and Hospital
    Ownership Exceptions to Self-referral Prohibition.--
                ``(1) Requirements described.--For purposes of subsection
            (d)(3)(D), the requirements described in this paragraph are as
            follows:
                        ``(A) Provider agreement.--The hospital had--
                                ``(i) physician ownership or investment on
                            January 1, 2009; and
                                ``(ii) a provider agreement under section
                            1866 in effect on such date.
                        ``(B) Prohibition on physician ownership or
                    investment.--The percentage of the total value of the
                    ownership or investment interests held in the hospital,
                    or in an entity whose assets include the hospital, by
                    physician owners or investors in the aggregate does not
                    exceed such percentage as of the date of enactment of
                    this subsection.
                        ``(C) Prohibition on expansion of facility
                    capacity.--Except as provided in paragraph (2), the
                    number of operating rooms, procedure rooms, or beds of
                    the hospital at any time on or after the date of the
                    enactment of this subsection are no greater than the
                    number of operating rooms, procedure rooms, or beds,
                    respectively, as of such date.
                        ``(D) Ensuring bona fide ownership and
                    investment.--
                                ``(i) Any ownership or investment interests
                            that the hospital offers to a physician are not
                            offered on more favorable terms than the terms
                            offered to a person who is not in a position to
                            refer patients or otherwise generate business
                            for the hospital.
                                ``(ii) The hospital (or any investors in
                            the hospital) does not directly or indirectly
                            provide loans or financing for any physician
                            owner or investor in the hospital.
                                ``(iii) The hospital (or any investors in
                            the hospital) does not directly or indirectly
                            guarantee a loan, make a payment toward a loan,
                            or otherwise subsidize a loan, for any
                            physician owner or investor or group of
                            physician owners or investors that is related
                            to acquiring any ownership or investment
                            interest in the hospital.
                                ``(iv) Ownership or investment returns are
                            distributed to each owner or investor in the
                            hospital in an amount that is directly
                            proportional to the ownership or investment
                            interest of such owner or investor in the
                            hospital.
                                ``(v) The investment interest of the owner
                            or investor is directly proportional to the
                            owner's or investor's capital contributions
                            made at the time the ownership or investment
                            interest is obtained.
                                ``(vi) Physician owners and investors do
                            not receive, directly or indirectly, any
                            guaranteed receipt of or right to purchase
                            other business interests related to the
                            hospital, including the purchase or lease of
                            any property under the control of other owners
                            or investors in the hospital or located near
                            the premises of the hospital.
                                ``(vii) The hospital does not offer a
                            physician owner or investor the opportunity to
                            purchase or lease any property under the
                            control of the hospital or any other owner or
                            investor in the hospital on more favorable
                            terms than the terms offered to a person that
                            is not a physician owner or investor.
                                ``(viii) The hospital does not condition
                            any physician ownership or investment interests
                            either directly or indirectly on the physician
                            owner or investor making or influencing
                            referrals to the hospital or otherwise
                            generating business for the hospital.
                        ``(E) Patient safety.--In the case of a hospital
                    that does not offer emergency services, the hospital
                    has the capacity to--
                                ``(i) provide assessment and initial
                            treatment for medical emergencies; and
                                ``(ii) if the hospital lacks additional
                            capabilities required to treat the emergency
                            involved, refer and transfer the patient with
                            the medical emergency to a hospital with the
                            required capability.
                        ``(F) Limitation on application to certain
                    converted facilities.--The hospital was not converted
                    from an ambulatory surgical center to a hospital on or
                    after the date of enactment of this subsection.
                ``(2) Exception to prohibition on expansion of facility
            capacity.--
                        ``(A) Process.--
                                ``(i) Establishment.--The Secretary shall
                            establish and implement a process under which a
                            hospital may apply for an exception from the
                            requirement under paragraph (1)(C).
                                ``(ii) Opportunity for community input.--
                            The process under clause (i) shall provide
                            persons and entities in the community in which
                            the hospital applying for an exception is
                            located with the opportunity to provide input
                            with respect to the application.
                                ``(iii) Timing for implementation.--The
                            Secretary shall implement the process under
                            clause (i) on the date that is one month after
                            the promulgation of regulations described in
                            clause (iv).
                                ``(iv) Regulations.--Not later than the
                            first day of the month beginning 18 months
                            after the date of the enactment of this
                            subsection, the Secretary shall promulgate
                            regulations to carry out the process under
                            clause (i). The Secretary may issue such
                            regulations as interim final regulations.
                        ``(B) Frequency.--The process described in
                    subparagraph (A) shall permit a hospital to apply for
                    an exception up to once every 2 years.
                        ``(C) Permitted increase.--
                                ``(i) In general.--Subject to clause (ii)
                            and subparagraph (D), a hospital granted an
                            exception under the process described in
                            subparagraph (A) may increase the number of
                            operating rooms, procedure rooms, or beds of
                            the hospital above the baseline number of
                            operating rooms, procedure rooms, or beds,
                            respectively, of the hospital (or, if the
                            hospital has been granted a previous exception
                            under this paragraph, above the number of
                            operating rooms, procedure rooms, or beds,
                            respectively, of the hospital after the
                            application of the most recent increase under
                            such an exception).
                                ``(ii) 100 percent increase limitation.--
                            The Secretary shall not permit an increase in
                            the number of operating rooms, procedure rooms,
                            or beds of a hospital under clause (i) to the
                            extent such increase would result in the number
                            of operating rooms, procedure rooms, or beds of
                            the hospital exceeding 200 percent of the
                            baseline number of operating rooms, procedure
                            rooms, or beds of the hospital.
                                ``(iii) Baseline number of operating rooms,
                            procedure rooms, or beds.--In this paragraph,
                            the term `baseline number of operating rooms,
                            procedure rooms, or beds' means the number of
                            operating rooms, procedure rooms, or beds of a
                            hospital as of the date of enactment of this
                            subsection.
                        ``(D) Increase limited to facilities on the main
                    campus of the hospital.--Any increase in the number of
                    operating rooms, procedure rooms, or beds of a hospital
                    pursuant to this paragraph may only occur in facilities
                    on the main campus of the hospital.
                        ``(E) Conditions for approval of an increase in
                    facility capacity.--The Secretary may grant an
                    exception under the process described in subparagraph
                    (A) only to a hospital--
                                ``(i) that is located in a county in which
                            the percentage increase in the population
                            during the most recent 5-year period for which
                            data are available is estimated to be at least
                            150 percent of the percentage increase in the
                            population growth of the State in which the
                            hospital is located during that period, as
                            estimated by Bureau of the Census and available
                            to the Secretary;
                                ``(ii) whose annual percent of total
                            inpatient admissions that represent inpatient
                            admissions under the program under title XIX is
                            estimated to be equal to or greater than the
                            average percent with respect to such admissions
                            for all hospitals located in the county in
                            which the hospital is located;
                                ``(iii) that does not discriminate against
                            beneficiaries of Federal health care programs
                            and does not permit physicians practicing at
                            the hospital to discriminate against such
                            beneficiaries;
                                ``(iv) that is located in a State in which
                            the average bed capacity in the State is
                            estimated to be less than the national average
                            bed capacity;
                                ``(v) that has an average bed occupancy
                            rate that is estimated to be greater than the
                            average bed occupancy rate in the State in
                            which the hospital is located; and
                                ``(vi) that meets other conditions as
                            determined by the Secretary.
                        ``(F) Procedure rooms.--In this subsection, the
                    term `procedure rooms' includes rooms in which
                    catheterizations, angiographies, angiograms, and
                    endoscopies are furnished, but such term shall not
                    include emergency rooms or departments (except for
                    rooms in which catheterizations, angiographies,
                    angiograms, and endoscopies are furnished).
                        ``(G) Publication of final decisions.--Not later
                    than 120 days after receiving a complete application
                    under this paragraph, the Secretary shall publish on
                    the public Internet website of the Centers for Medicare
                    & Medicaid Services the final decision with respect to
                    such application.
                        ``(H) Limitation on review.--There shall be no
                    administrative or judicial review under section 1869,
                    section 1878, or otherwise of the exception process
                    under this paragraph, including the establishment of
                    such process, and any determination made under such
                    process.
                ``(3) Physician owner or investor defined.--For purposes of
            this subsection and subsection (f)(2), the term `physician
            owner or investor' means a physician (or an immediate family
            member of such physician) with a direct or an indirect
            ownership or investment interest in the hospital.
                ``(4) Patient safety requirement.--In the case of a
            hospital to which the requirements of paragraph (1) apply,
            insofar as the hospital admits a patient and does not have any
            physician available on the premises 24 hours per day, 7 days
            per week, before admitting the patient--
                        ``(A) the hospital shall disclose such fact to the
                    patient; and
                        ``(B) following such disclosure, the hospital shall
                    receive from the patient a signed acknowledgment that
                    the patient understands such fact.
                ``(5) Clarification.--Nothing in this subsection shall be
            construed as preventing the Secretary from terminating a
            hospital's provider agreement if the hospital is not in
            compliance with regulations pursuant to section 1866.''.
        (b) Verifying Compliance.--The Secretary of Health and Human
    Services shall establish policies and procedures to verify compliance
    with the requirements described in subsections (i)(1) and (i)(4) of
    section 1877 of the Social Security Act, as added by subsection (a)(5).
    The Secretary may use unannounced site reviews of hospitals and audits
    to verify compliance with such requirements.
        (c) Implementation.--
                (1) Funding.--For purposes of carrying out the amendments
            made by subsection (a) and the provisions of subsection (b), in
            addition to funds otherwise available, out of any funds in the
            Treasury not otherwise appropriated there are appropriated to
            the Secretary of Health and Human Services for the Centers for
            Medicare & Medicaid Services Program Management Account
            $5,000,000 for each fiscal year beginning with fiscal year
            2010. Amounts appropriated under this paragraph for a fiscal
            year shall be available until expended.
                (2) Administration.--Chapter 35 of title 44, United States
            Code, shall not apply to the amendments made by subsection (a)
            and the provisions of subsection (b).

    SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC ADJUSTMENT FACTORS
                  UNDER MEDICARE.

        (a) In General.--The Secretary of Health and Human Services shall
    enter into a contract with the Institute of Medicine of the National
    Academy of Science to conduct a comprehensive empirical study, and
    provide recommendations as appropriate, on the accuracy of the
    geographic adjustment factors established under sections 1848(e) and
    1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395w-4(e),
    11395ww(d)(3)).
        (b) Matters Included.--Such study shall include an evaluation and
    assessment of the following with respect to such adjustment factors:
                (1) Empirical validity of the adjustment factors.
                (2) Methodology used to determine the adjustment factors.
                (3) Measures used for the adjustment factors, taking into
            account--
                        (A) timeliness of data and frequency of revisions
                    to such data;
                        (B) sources of data and the degree to which such
                    data are representative of costs; and
                        (C) operational costs of providers who participate
                    in Medicare.
        (c) Evaluation.--Such study shall, within the context of the United
    States health care marketplace, evaluate and consider the following:
                (1) The effect of the adjustment factors on the level and
            distribution of the health care workforce and resources,
            including--
                        (A) recruitment and retention that takes into
                    account workforce mobility between urban and rural
                    areas;
                        (B) ability of hospitals and other facilities to
                    maintain an adequate and skilled workforce; and
                        (C) patient access to providers and needed medical
                    technologies.
                (2) The effect of the adjustment factors on population
            health and quality of care.
                (3) The effect of the adjustment factors on the ability of
            providers to furnish efficient, high value care.
        (d) Report.--The contract under subsection (a) shall provide for
    the Institute of Medicine to submit, not later than one year after the
    date of the enactment of this Act, to the Secretary and the Congress a
    report containing results and recommendations of the study conducted
    under this section.
        (e) Funding.--There are authorized to be appropriated to carry out
    this section such sums as may be necessary.

    SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO ADDRESS GEOGRAPHIC
                  INEQUITIES.

        (a) Revision of Medicare Payment Systems.--Taking into account the
    recommendations described in the report under section 1157, and
    notwithstanding the geographic adjustments that would otherwise apply
    under section 1848(e) and section 1886(d)(3)(E) of the Social Security
    Act ((42 U.S.C. 1395w-4, 1395ww(d)), the Secretary of Health and Human
    Services shall include in proposed rules applicable to the rulemaking
    cycle for payment systems for physicians' services and inpatient
    hospital services under sections 1848 and section 1886(d) of such Act,
    respectively, proposals (as the Secretary determines to be appropriate)
    to revise the geographic adjustment factors used in such systems. Such
    proposals' rules shall be contained in the next rulemaking cycle
    following the submission to the Secretary of the report described in
    section 1157.
        (b) Payment Adjustments.--
                (1) Funding for improvements.--The Secretary shall use
            funds as provided under subsection (c) in making changes to the
            geographic adjustment factors pursuant to subsection (a). In
            making such changes to such geographic adjustment factors, the
            Secretary shall ensure that the estimated increased
            expenditures resulting from such changes does not exceed the
            amounts provided under subsection (c).
                (2) Ensuring fairness.--In carrying out this subsection,
            the Secretary shall not reduce the geographic adjustment below
            the factor that applied for such payment system in the payment
            year before such changes.
        (c) Funding.--Amounts in the Medicare Improvement Fund under
    section 1898, as amended by section 1146, shall be available to the
    Secretary to make changes to the geographic adjustments factors as
    described in subsections (a) and (b) with respect to services furnished
    before January 1, 2014.   No more than one-half of such amounts shall
    be available with respect to services furnished in any one payment
    year.

    SEC. 1159. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC VARIATION IN
                  HEALTH CARE SPENDING AND PROMOTING HIGH-VALUE HEALTH
                  CARE.

        (a) In General.--The Secretary of Health and Human Services shall
    enter into an agreement with the Institutes of Medicine of the National
    Academies (referred to in this section as the ``Institute'') to conduct
    a study on geographic variation in per capita health care spending
    among both the Medicare and privately insured populations. Such study
    shall include each of the following:
                (1) An evaluation of the extent and range of such variation
            using various units of geographic measurement.
                (2) The extent to which geographic variation can be
            attributed to differences in input prices, practice patterns,
            access to medical services, supply of medical services, socio-
            economic factors, and provider organizational models.
                (3) The extent to which variations in spending are
            correlated with patient access to care, distribution of health
            care resources, and consensus-based measures of health care
            quality.
                (4) The extent to which variation can be attributed to
            physician and practitioner discretion in making treatment
            decisions, and the degree to which discretionary treatment
            decisions are made that could be characterized as different
            from the best available medical evidence.
                (5) An assessment of the degree to which variation cannot
            be explained by empirical evidence.
                (6) Other factors the Institute deems appropriate.
        (b) Recommendations.--Taking into account the findings under
    subsection (a), the Institute shall recommend strategies for addressing
    variation in per capita spending by promoting high-value care (as
    defined in subsection (e)). In making such recommendations, the
    Institute shall consider each of the following:
                (1) Measurement and reporting on quality and population
            health.
                (2) Reducing fragmented and duplicative care.
                (3) Promoting the practice of evidence-based medicine.
                (4) Empowering patients to make value-based care decisions.
                (5) Leveraging the use of health information technology.
                (6) The role of financial and other incentives.
                (7) Other topics the Institute deems appropriate.
        (c) Specific Considerations.--In making the recommendations under
    subsection (b), the Institute shall specifically address whether
    payment systems under title XVIII of the Social Security Act for
    physicians and hospitals should be further modified to incentivize
    high-value care. In so doing, the Institute shall consider the adoption
    of a value index based on a composite of appropriate measures of
    quality and cost that would adjust provider payments on a regional or
    provider-level basis. If the Institute finds that application of such a
    value index would significantly incentivize providers to furnish high-
    value care, it shall make specific recommendations on how such an index
    would be designed and implemented. In so doing, it should identify
    specific measures of quality and cost appropriate for use in such an
    index, and include a thorough analysis (including on a geographic
    basis) of how payments and spending under such title would be affected
    by such an index.
        (d) Report.-- Not later than three years after the date of the
    enactment of this Act, the Institute shall submit to Congress a report
    containing findings and recommendations of the study conducted under
    this section.
        (e) High-value Care Defined.--For purposes of this section, the
    term ``high-value care'' means the efficient delivery of high quality,
    evidence-based, patient-centered care.
        (f) Authorization of Appropriations.--There is authorized to be
    appropriated such sums as are necessary to carry out this section. Such
    sums are authorized to remain available until expended.

                     Subtitle D--Medicare Advantage Reforms

                       PART 1--PAYMENT AND ADMINISTRATION

    SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-SERVICE COSTS.

        Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is
    amended--
                (1) in subsection (j)(1)(A)--
                        (A) by striking ``beginning with 2007'' and
                    inserting ``for 2007, 2008, 2009, and 2010''; and
                        (B) by inserting after ``(k)(1)'' the following:
                    ``, or, beginning with 2011, \1/12\ of the blended
                    benchmark amount determined under subsection (n)(1)'';
                    and
                (2) by adding at the end the following new subsection:
        ``(n) Determination of Blended Benchmark Amount.--
                ``(1) In general.--For purposes of subsection (j), subject
            to paragraphs (3) and (4), the term `blended benchmark amount'
            means for an area--
                        ``(A) for 2011 the sum of--
                                ``(i) \2/3\ of the applicable amount (as
                            defined in subsection (k)) for the area and
                            year; and
                                ``(ii) \1/3\ of the amount specified in
                            paragraph (2) for the area and year;
                        ``(B) for 2012 the sum of--
                                ``(i) \1/3\ of the applicable amount for
                            the area and year; and
                                ``(ii) \2/3\ of the amount specified in
                            paragraph (2) for the area and year; and
                        ``(C) for a subsequent year the amount specified in
                    paragraph (2) for the area and year.
                ``(2) Specified amount.--The amount specified in this
            paragraph for an area and year is the amount specified in
            subsection (c)(1)(D)(i) for the area and year adjusted (in a
            manner specified by the Secretary) to take into account the
            phase-out in the indirect costs of medical education from
            capitation rates described in subsection (k)(4).
                ``(3) Fee-for-service payment floor.--In no case shall the
            blended benchmark amount for an area and year be less than the
            amount specified in paragraph (2).
                ``(4) Exception for pace plans.--This subsection shall not
            apply to payments to a PACE program under section 1894.''.

    SEC. 1162. QUALITY BONUS PAYMENTS.

        (a) In General.--Section 1853 of the Social Security Act (42 U.S.C.
    1395w-23), as amended by section 1161, is amended--
                (1) in subsection (j), by inserting ``subject to subsection
            (o),'' after ``For purposes of this part,''; and
                (2) by adding at the end the following new subsection:
        ``(o) Quality Based Payment Adjustment.--
                ``(1) In general.--In the case of a qualifying plan in a
            qualifying county with respect to a year beginning with 2011,
            the blended benchmark amount under subsection (n)(1) shall be
            increased--
                        ``(A) for 2011, by 2.6 percent;
                        ``(B) for 2012, by 5.3 percent; and
                        ``(C) for a subsequent year, by 8.0 percent.
                ``(2) Qualifying plan and qualifying county defined.--For
            purposes of this subsection:
                        ``(A) Qualifying plan.--The term `qualifying plan'
                    means, for a year and subject to paragraph (4), a plan
                    that, in a preceding year specified by the Secretary,
                    had a quality ranking (based on the quality ranking
                    system established by the Centers for Medicare &
                    Medicaid Services for Medicare Advantage plans) of 4
                    stars or higher.
                        ``(B) Qualifying county.--The term `qualifying
                    county' means, for a year, a county--
                                ``(i) that ranked within the lowest
                            quartile of counties in the amount specified in
                            subsection (n)(2) for the year specified by the
                            Secretary under subparagraph (A); and
                                ``(ii) for which, as of June of such
                            specified year, of the Medicare Advantage
                            eligible individuals residing in the county--
                                        ``(I) at least 50 percent of such
                                    individuals were enrolled in Medicare
                                    Advantage plans; and
                                        ``(II) of the residents so enrolled
                                    at least 50 percent of such individuals
                                    were enrolled in such plans with a
                                    quality ranking (based on the quality
                                    ranking system established by the
                                    Centers for Medicare & Medicaid
                                    Services for Medicare Advantage plans)
                                    of 4 stars or higher.
                ``(3) Notification.--The Secretary, in the annual
            announcement required under subsection (b)(1)(B) in 2010 and
            each succeeding year, shall notify the Medicare Advantage
            organization that is offering a qualifying plan in a qualifying
            county of such identification for the year. The Secretary shall
            provide for publication on the website for the Medicare program
            of the information described in the previous sentence.
                ``(4) Authority to disqualify deficient plans.--The
            Secretary may determine that a Medicare Advantage plan is not a
            qualifying plan if the Secretary has identified deficiencies in
            the plan's compliance with rules for Medicare Advantage plans
            under this part.''.

    SEC. 1163. EXTENSION OF SECRETARIAL CODING INTENSITY ADJUSTMENT
                  AUTHORITY.

        Section 1853(a)(1)(C)(ii) of the Social Security Act (42 U.S.C.
    1395w-23(a)(1)(C)(ii) is amended--
                (1) in the matter before subclause (I), by striking
            ``through 2010'' and inserting ``and each subsequent year'';
            and
                (2) in subclause (II)--
                        (A) by inserting ``periodically'' before ``conduct
                    an analysis'';
                        (B) by inserting ``on a timely basis'' after ``are
                    incorporated''; and
                        (C) by striking ``only for 2008, 2009, and 2010''
                    and inserting ``for 2008 and subsequent years''.

    SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

        (a) 2 Week Processing Period for Annual Enrollment Period (AEP).--
    Paragraph (3)(B) of section 1851(e) of the Social Security Act (42
    U.S.C. 1395w-21(e)) is amended--
                (1) by striking ``and'' at the end of clause (iii);
                (2) in clause (iv)--
                        (A) by striking ``and succeeding years'' and
                    inserting ``, 2008, 2009, and 2010''; and
                        (B) by striking the period at the end and inserting
                    ``; and''; and
                (3) by adding at the end the following new clause:
                                ``(v) with respect to 2011 and succeeding
                            years, the period beginning on November 1 and
                            ending on December 15 of the year before such
                            year.''.
        (b) Elimination of 3-month Additional Open Enrollment Period
    (OEP).--Effective for plan years beginning with 2011, paragraph (2) of
    such section is amended by striking subparagraph (C).

    SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.

        Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C.
    1395mm(h)(5)(C)) is amended--
                (1) in clause (ii), by striking ``January 1, 2010'' and
            inserting ``January 1, 2012''; and
                (2) in clause (iii), by striking ``the service area for the
            year'' and inserting ``the portion of the plan's service area
            for the year that is within the service area of a reasonable
            cost reimbursement contract''.

    SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYER GROUP PLANS.

        (a) In General.--The first sentence of paragraph (2) of section
    1857(i) of the Social Security Act (42 U.S.C. 1395w-27(i)) is amended
    by inserting before the period at the end the following: ``, but only
    if 90 percent of the Medicare Advantage eligible individuals enrolled
    under such plan reside in a county in which the MA organization offers
    an MA local plan''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply for plan years beginning on or after January 1, 2011, and shall
    not apply to plans which were in effect as of December 31, 2010.

    SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

        (a) Report to Congress.--Not later than 1 year after the date of
    the enactment of this Act, the Secretary of Health and Human Services
    shall submit to Congress a report that evaluates the adequacy of the
    risk adjustment system under section 1853(a)(1)(C) of the Social
    Security Act (42 U.S.C. 1395-23(a)(1)(C)) in predicting costs for
    beneficiaries with chronic or co-morbid conditions, beneficiaries
    dually-eligible for Medicare and Medicaid, and non-Medicaid eligible
    low-income beneficiaries; and the need and feasibility of including
    further gradations of diseases or conditions and multiple years of
    beneficiary data.
        (b) Improvements to Risk Adjustment.--Not later than January 1,
    2012, the Secretary shall implement necessary improvements to the risk
    adjustment system under section 1853(a)(1)(C) of the Social Security
    Act (42 U.S.C. 1395-23(a)(1)(C)), taking into account the evaluation
    under subsection (a).

    SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND.

        (a) In General.--Section 1858 of the Social Security Act (42 U.S.C.
    1395w-27a) is amended by striking subsection (e).
        (b) Transition.--Any amount contained in the MA Regional Plan
    Stabilization Fund as of the date of the enactment of this Act shall be
    transferred to the Federal Supplementary Medical Insurance Trust Fund.

                 PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD

    SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES.

        (a) In General.--Section 1852(a)(1) of the Social Security Act (42
    U.S.C. 1395w-22(a)(1)) is amended--
                (1) in subparagraph (A), by inserting before the period at
            the end the following: ``with cost-sharing that is no greater
            (and may be less) than the cost-sharing that would otherwise be
            imposed under such program option'';
                (2) in subparagraph (B)(i), by striking ``or an actuarially
            equivalent level of cost-sharing as determined in this part'';
            and
                (3) by amending clause (ii) of subparagraph (B) to read as
            follows:
                                ``(ii) Permitting use of flat copayment or
                            per diem rate.--Nothing in clause (i) shall be
                            construed as prohibiting a Medicare Advantage
                            plan from using a flat copayment or per diem
                            rate, in lieu of the cost-sharing that would be
                            imposed under part A or B, so long as the
                            amount of the cost-sharing imposed does not
                            exceed the amount of the cost-sharing that
                            would be imposed under the respective part if
                            the individual were not enrolled in a plan
                            under this part.''.
        (b) Limitation for Dual Eligibles and Qualified Medicare
    Beneficiaries.--Section 1852(a)(7) of such Act is amended to read as
    follows:
                ``(7) Limitation on cost-sharing for dual eligibles and
            qualified medicare beneficiaries.--In the case of a individual
            who is a full-benefit dual eligible individual (as defined in
            section 1935(c)(6)) or a qualified medicare beneficiary (as
            defined in section 1905(p)(1)) who is enrolled in a Medicare
            Advantage plan, the plan may not impose cost-sharing that
            exceeds the amount of cost-sharing that would be permitted with
            respect to the individual under this title and title XIX if the
            individual were not enrolled with such plan.''.
        (c) Effective Dates.--
                (1) The amendments made by subsection (a) shall apply to
            plan years beginning on or after January 1, 2011.
                (2) The amendments made by subsection (b) shall apply to
            plan years beginning on or after January 1, 2011.

    SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH
                  ENROLLMENT SUSPENSION.

        Section 1851(e)(4) of the Social Security Act (42 U.S.C.
    1395w(e)(4)) is amended--
                (1) in subparagraph (C), by striking at the end ``or'';
                (2) in subparagraph (D)--
                        (A) by inserting ``, taking into account the health
                    or well-being of the individual'' before the period;
                    and
                        (B) by redesignating such subparagraph as
                    subparagraph (E); and
                (3) by inserting after subparagraph (C) the following new
            subparagraph:
                        ``(D) the individual is enrolled in an MA plan and
                    enrollment in the plan is suspended under paragraph
                    (2)(B) or (3)(C) of section 1857(g) because of a
                    failure of the plan to meet applicable requirements;
                    or''.

    SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE
                  COSTS.

        (a) Disclosure of Medical Loss Ratios and Other Expense Data.--
    Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as
    previously amended by this subtitle, is amended by adding at the end
    the following new subsection:
        ``(p) Publication of Medical Loss Ratios and Other Cost-related
    Information.--
                ``(1) In general.--The Secretary shall publish, not later
            than November 1 of each year (beginning with 2011), for each MA
            plan contract, the medical loss ratio of the plan in the
            previous year.
                ``(2) Submission of data.--
                        ``(A) In general.--Each MA organization shall
                    submit to the Secretary, in a form and manner specified
                    by the Secretary, data necessary for the Secretary to
                    publish the medical loss ratio on a timely basis.
                        ``(B) Data for 2010 and 2011.--The data submitted
                    under subparagraph (A) for 2010 and for 2011 shall be
                    consistent in content with the data reported as part of
                    the MA plan bid in June 2009 for 2010.
                        ``(C) Use of standardized elements and
                    definitions.--The data to be submitted under
                    subparagraph (A) relating to medical loss ratio for a
                    year, beginning with 2012, shall be submitted based on
                    the standardized elements and definitions developed
                    under paragraph (3).
                ``(3) Development of data reporting standards.--
                        ``(A) In general.--The Secretary shall develop and
                    implement standardized data elements and definitions
                    for reporting under this subsection, for contract years
                    beginning with 2012, of data necessary for the
                    calculation of the medical loss ratio for MA plans. Not
                    later than December 31, 2010, the Secretary shall
                    publish a report describing the elements and
                    definitions so developed.
                        ``(B) Consultation.--The Secretary shall consult
                    with the Health Choices Commissioner, representatives
                    of MA organizations, experts on health plan accounting
                    systems, and representatives of the National
                    Association of Insurance Commissioners, in the
                    development of such data elements and definitions.
                ``(4) Medical loss ratio to be defined.--For purposes of
            this part, the term `medical loss ratio' has the meaning given
            such term by the Secretary, taking into account the meaning
            given such term by the Health Choices Commissioner under
            section 116 of the America's Affordable Health Choices Act of
            2009.''.
        (b) Minimum Medical Loss Ratio.--Section 1857(e) of the Social
    Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end
    the following new paragraph:
                ``(4) Requirement for minimum medical loss ratio.--If the
            Secretary determines for a contract year (beginning with 2014)
            that an MA plan has failed to have a medical loss ratio (as
            defined in section 1851(p)(4)) of at least .85--
                        ``(A) the Secretary shall require the Medicare
                    Advantage organization offering the plan to give
                    enrollees a rebate (in the second succeeding contract
                    year) of premiums under this part (or part B or part D,
                    if applicable) by such amount as would provide for a
                    benefits ratio of at least .85;
                        ``(B) for 3 consecutive contract years, the
                    Secretary shall not permit the enrollment of new
                    enrollees under the plan for coverage during the second
                    succeeding contract year; and
                        ``(C) the Secretary shall terminate the plan
                    contract if the plan fails to have such a medical loss
                    ratio for 5 consecutive contract years.''.

    SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

        (a) For Part C Payments Risk Adjustment.--Section 1857(d)(1) of the
    Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by inserting
    after ``section 1858(c))'' the following: ``, and data submitted with
    respect to risk adjustment under section 1853(a)(3)''.
        (b) Enforcement of Audits and Deficiencies.--
                (1) In general.--Section 1857(e) of such Act, as amended by
            section 1173, is amended by adding at the end the following new
            paragraph:
                ``(5) Enforcement of audits and deficiencies.--
                        ``(A) Information in contract.--The Secretary shall
                    require that each contract with an MA organization
                    under this section shall include terms that inform the
                    organization of the provisions in subsection (d).
                        ``(B) Enforcement authority.--The Secretary is
                    authorized, in connection with conducting audits and
                    other activities under subsection (d), to take such
                    actions, including pursuit of financial recoveries,
                    necessary to address deficiencies identified in such
                    audits or other activities.''.
                (2) Application under part d.--For provision applying the
            amendment made by paragraph (1) to prescription drug plans
            under part D, see section 1860D-12(b)(3)(D) of the Social
            Security Act.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act and shall apply to
    audits and activities conducted for contract years beginning on or
    after January 1, 2011.

    SEC. 1175. AUTHORITY TO DENY PLAN BIDS.

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

                    PART 3--TREATMENT OF SPECIAL NEEDS PLANS

    SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN ENROLLMENT PERIOD OF
                  INDIVIDUALS INTO CHRONIC CARE SPECIALIZED MA PLANS FOR
                  SPECIAL NEEDS INDIVIDUALS.

        Section 1859(f)(4) of the Social Security Act (42 U.S.C. 1395w-
    28(f)(4)) is amended by adding at the end the following new
    subparagraph:
                        ``(C) The plan does not enroll an individual on or
                    after January 1, 2011, other than during an annual,
                    coordinated open enrollment period or when at the time
                    of the diagnosis of the disease or condition that
                    qualifies the individual as an individual described in
                    subsection (b)(6)(B)(iii).''.

    SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT
                  ENROLLMENT.

        (a) In General.--Section 1859(f)(1) of the Social Security Act (42
    U.S.C. 1395w-28(f)(1)) is amended by striking ``January 1, 2011'' and
    inserting ``January 1, 2013 (or January 1, 2016, in the case of a plan
    described in section 1177(b)(1) of the America's Affordable Health
    Choices Act of 2009)''.
        (b) Grandfathering of Certain Plans.--
                (1) Plans described.--For purposes of section 1859(f)(1) of
            the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan
            described in this paragraph is a plan that had a contract with
            a State that had a State program to operate an integrated
            Medicaid-Medicare program that had been approved by the Centers
            for Medicare & Medicaid Services as of January 1, 2004.
                (2) Analysis; report.--The Secretary of Health and Human
            Services shall provide, through a contract with an independent
            health services evaluation organization, for an analysis of the
            plans described in paragraph (1) with regard to the impact of
            such plans on cost, quality of care, patient satisfaction, and
            other subjects as specified by the Secretary. Not later than
            December 31, 2011, the Secretary shall submit to Congress a
            report on such analysis and shall include in such report such
            recommendations with regard to the treatment of such plans as
            the Secretary deems appropriate.

                  Subtitle E--Improvements to Medicare Part D

    SEC. 1181. ELIMINATION OF COVERAGE GAP.

        (a) In General.--Section 1860D-2(b) of such Act (42 U.S.C. 1395w-
    102(b)) is amended--
                (1) in paragraph (3)(A), by striking ``paragraph (4)'' and
            inserting ``paragraphs (4) and (7)'';
                (2) in paragraph (4)(B)(i), by inserting ``subject to
            paragraph (7)'' after ``purposes of this part''; and
                (3) by adding at the end the following new paragraph:
                ``(7) Phased-in elimination of coverage gap.--
                        ``(A) In general.--For each year beginning with
                    2011, the Secretary shall consistent with this
                    paragraph progressively increase the initial coverage
                    limit (described in subsection (b)(3)) and decrease the
                    annual out-of-pocket threshold from the amounts
                    otherwise computed until there is a continuation of
                    coverage from the initial coverage limit for
                    expenditures incurred through the total amount of
                    expenditures at which benefits are available under
                    paragraph (4).
                        ``(B) Increase in initial coverage limit.--For a
                    year beginning with 2011, the initial coverage limit
                    otherwise computed without regard to this paragraph
                    shall be increased by \1/2\ of the cumulative phase-in
                    percentage (as defined in subparagraph (D)(ii) for the
                    year) times the out-of-pocket gap amount (as defined in
                    subparagraph (E)) for the year.
                        ``(C) Decrease in annual out-of-pocket threshold.--
                    For a year beginning with 2011, the annual out-of-
                    pocket threshold otherwise computed without regard to
                    this paragraph shall be decreased by \1/2\ of the
                    cumulative phase-in percentage of the out-of-pocket gap
                    amount for the year multiplied by 1.75.
                        ``(D) Phase-in.--For purposes of this paragraph:
                                ``(i) Annual phase-in percentage.--The term
                            `annual phase-in percentage' means--
                                        ``(I) for 2011, 13 percent;
                                        ``(II) for 2012, 2013, 2014, and
                                    2015, 5 percent;
                                        ``(III) for 2016 through 2018, 7.5
                                    percent; and
                                        ``(IV) for 2019 and each subsequent
                                    year, 10 percent.
                                ``(ii) Cumulative phase-in percentage.--The
                            term `cumulative phase-in percentage' means for
                            a year the sum of the annual phase-in
                            percentage for the year and the annual phase-in
                            percentages for each previous year beginning
                            with 2011, but in no case more than 100
                            percent.
                        ``(E) Out-of-pocket gap amount.--For purposes of
                    this paragraph, the term `out-of-pocket gap amount'
                    means for a year the amount by which--
                                ``(i) the annual out-of-pocket threshold
                            specified in paragraph (4)(B) for the year (as
                            determined as if this paragraph did not apply),
                            exceeds
                                ``(ii) the sum of--
                                        ``(I) the annual deductible under
                                    paragraph (1) for the year; and
                                        ``(II) \1/4\ of the amount by which
                                    the initial coverage limit under
                                    paragraph (3) for the year (as
                                    determined as if this paragraph did not
                                    apply) exceeds such annual
                                    deductible.''.
        (b) Requiring Drug Manufacturers to Provide Drug Rebates for Full-
    benefit Dual Eligibles.--
                (1) In general.--Section 1860D-2 of the Social Security Act
            (42 U.S.C. 1396r-8) is amended--
                        (A) in subsection (e)(1), in the matter before
                    subparagraph (A), by inserting ``and subsection (f)''
                    after ``this subsection''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(f) Prescription Drug Rebate Agreement for Full-benefit Dual
    Eligible Individuals.--
                ``(1) In general.--In this part, the term `covered part D
            drug' does not include any drug or biologic that is
            manufactured by a manufacturer that has not entered into and
            have in effect a rebate agreement described in paragraph (2).
                ``(2) Rebate agreement.--A rebate agreement under this
            subsection shall require the manufacturer to provide to the
            Secretary a rebate for each rebate period (as defined in
            paragraph (6)(B)) ending after December 31, 2010, in the amount
            specified in paragraph (3) for any covered part D drug of the
            manufacturer dispensed after December 31, 2010, to any full-
            benefit dual eligible individual (as defined in paragraph
            (6)(A)) for which payment was made by a PDP sponsor under part
            D or a MA organization under part C for such period. Such
            rebate shall be paid by the manufacturer to the Secretary not
            later than 30 days after the date of receipt of the information
            described in section 1860D-12(b)(7), including as such section
            is applied under section 1857(f)(3).
                ``(3) Rebate for full-benefit dual eligible medicare drug
            plan enrollees.--
                        ``(A) In general.--The amount of the rebate
                    specified under this paragraph for a manufacturer for a
                    rebate period, with respect to each dosage form and
                    strength of any covered part D drug provided by such
                    manufacturer and dispensed to a full-benefit dual
                    eligible individual, shall be equal to the product of--
                                ``(i) the total number of units of such
                            dosage form and strength of the drug so
                            provided and dispensed for which payment was
                            made by a PDP sponsor under part D or a MA
                            organization under part C for the rebate period
                            (as reported under section 1860D-12(b)(7),
                            including as such section is applied under
                            section 1857(f)(3)); and
                                ``(ii) the amount (if any) by which--
                                        ``(I) the Medicaid rebate amount
                                    (as defined in subparagraph (B)) for
                                    such form, strength, and period,
                                    exceeds
                                        ``(II) the average Medicare drug
                                    program full-benefit dual eligible
                                    rebate amount (as defined in
                                    subparagraph (C)) for such form,
                                    strength, and period.
                        ``(B) Medicaid rebate amount.--For purposes of this
                    paragraph, the term `Medicaid rebate amount' means,
                    with respect to each dosage form and strength of a
                    covered part D drug provided by the manufacturer for a
                    rebate period--
                                ``(i) in the case of a single source drug
                            or an innovator multiple source drug, the
                            amount specified in paragraph (1)(A)(ii) of
                            section 1927(b) plus the amount, if any,
                            specified in paragraph (2)(A)(ii) of such
                            section, for such form, strength, and period;
                            or
                                ``(ii) in the case of any other covered
                            outpatient drug, the amount specified in
                            paragraph (3)(A)(i) of such section for such
                            form, strength, and period.
                        ``(C) Average medicare drug program full-benefit
                    dual eligible rebate amount.--For purposes of this
                    subsection, the term `average Medicare drug program
                    full-benefit dual eligible rebate amount' means, with
                    respect to each dosage form and strength of a covered
                    part D drug provided by a manufacturer for a rebate
                    period, the sum, for all PDP sponsors under part D and
                    MA organizations administering a MA-PD plan under part
                    C, of--
                                ``(i) the product, for each such sponsor or
                            organization, of--
                                        ``(I) the sum of all rebates,
                                    discounts, or other price concessions
                                    (not taking into account any rebate
                                    provided under paragraph (2) for such
                                    dosage form and strength of the drug
                                    dispensed, calculated on a per-unit
                                    basis, but only to the extent that any
                                    such rebate, discount, or other price
                                    concession applies equally to drugs
                                    dispensed to full-benefit dual eligible
                                    Medicare drug plan enrollees and drugs
                                    dispensed to PDP and MA-PD enrollees
                                    who are not full-benefit dual eligible
                                    individuals; and
                                        ``(II) the number of the units of
                                    such dosage and strength of the drug
                                    dispensed during the rebate period to
                                    full-benefit dual eligible individuals
                                    enrolled in the prescription drug plans
                                    administered by the PDP sponsor or the
                                    MA-PD plans administered by the MA-PD
                                    organization; divided by
                                ``(ii) the total number of units of such
                            dosage and strength of the drug dispensed
                            during the rebate period to full-benefit dual
                            eligible individuals enrolled in all
                            prescription drug plans administered by PDP
                            sponsors and all MA-PD plans administered by
                            MA-PD organizations.
                ``(4) Length of agreement.--The provisions of paragraph (4)
            of section 1927(b) (other than clauses (iv) and (v) of
            subparagraph (B)) shall apply to rebate agreements under this
            subsection in the same manner as such paragraph applies to a
            rebate agreement under such section.
                ``(5) Other terms and conditions.--The Secretary shall
            establish other terms and conditions of the rebate agreement
            under this subsection, including terms and conditions related
            to compliance, that are consistent with this subsection.
                ``(6) Definitions.--In this subsection and section 1860D-
            12(b)(7):
                        ``(A) Full-benefit dual eligible individual.--The
                    term `full-benefit dual eligible individual' has the
                    meaning given such term in section 1935(c)(6).
                        ``(B) Rebate period.--The term `rebate period' has
                    the meaning given such term in section 1927(k)(8).''.
                (2) Reporting requirement for the determination and payment
            of rebates by manufactures related to rebate for full-benefit
            dual eligible medicare drug plan enrollees.--
                        (A) Requirements for pdp sponsors.--Section 1860D-
                    12(b) of the Social Security Act (42 U.S.C. 1395w-
                    112(b)) is amended by adding at the end the following
                    new paragraph:
                ``(7) Reporting requirement for the determination and
            payment of rebates by manufacturers related to rebate for full-
            benefit dual eligible medicare drug plan enrollees.--
                        ``(A) In general.--For purposes of the rebate under
                    section 1860D-2(f) for contract years beginning on or
                    after January 1, 2011, each contract entered into with
                    a PDP sponsor under this part with respect to a
                    prescription drug plan shall require that the sponsor
                    comply with subparagraphs (B) and (C).
                        ``(B) Report form and contents.--Not later than 60
                    days after the end of each rebate period (as defined in
                    section 1860D-2(f)(6)(B)) within such a contract year
                    to which such section applies, a PDP sponsor of a
                    prescription drug plan under this part shall report to
                    each manufacturer--
                                ``(i) information (by National Drug Code
                            number) on the total number of units of each
                            dosage, form, and strength of each drug of such
                            manufacturer dispensed to full-benefit dual
                            eligible Medicare drug plan enrollees under any
                            prescription drug plan operated by the PDP
                            sponsor during the rebate period;
                                ``(ii) information on the price discounts,
                            price concessions, and rebates for such drugs
                            for such form, strength, and period;
                                ``(iii) information on the extent to which
                            such price discounts, price concessions, and
                            rebates apply equally to full-benefit dual
                            eligible Medicare drug plan enrollees and PDP
                            enrollees who are not full-benefit dual
                            eligible Medicare drug plan enrollees; and
                                ``(iv) any additional information that the
                            Secretary determines is necessary to enable the
                            Secretary to calculate the average Medicare
                            drug program full-benefit dual eligible rebate
                            amount (as defined in paragraph (3)(C) of such
                            section), and to determine the amount of the
                            rebate required under this section, for such
                            form, strength, and period.
                    Such report shall be in a form consistent with a
                    standard reporting format established by the Secretary.
                        ``(C) Submission to secretary.--Each PDP sponsor
                    shall promptly transmit a copy of the information
                    reported under subparagraph (B) to the Secretary for
                    the purpose of audit oversight and evaluation.
                        ``(D) Confidentiality of information.--The
                    provisions of subparagraph (D) of section 1927(b)(3),
                    relating to confidentiality of information, shall apply
                    to information reported by PDP sponsors under this
                    paragraph in the same manner that such provisions apply
                    to information disclosed by manufacturers or
                    wholesalers under such section, except--
                                ``(i) that any reference to `this section'
                            in clause (i) of such subparagraph shall be
                            treated as being a reference to this section;
                                ``(ii) the reference to the Director of the
                            Congressional Budget Office in clause (iii) of
                            such subparagraph shall be treated as including
                            a reference to the Medicare Payment Advisory
                            Commission; and
                                ``(iii) clause (iv) of such subparagraph
                            shall not apply.
                        ``(E) Oversight.--Information reported under this
                    paragraph may be used by the Inspector General of the
                    Department of Health and Human Services for the
                    statutorily authorized purposes of audit,
                    investigation, and evaluations.
                        ``(F) Penalties for failure to provide timely
                    information and provision of false information.--In the
                    case of a PDP sponsor--
                                ``(i) that fails to provide information
                            required under subparagraph (B) on a timely
                            basis, the sponsor is subject to a civil money
                            penalty in the amount of $10,000 for each day
                            in which such information has not been
                            provided; or
                                ``(ii) that knowingly (as defined in
                            section 1128A(i)) provides false information
                            under such subparagraph, the sponsor is subject
                            to a civil money penalty in an amount not to
                            exceed $100,000 for each item of false
                            information.
                    Such civil money penalties are in addition to other
                    penalties as may be prescribed by law. The provisions
                    of section 1128A (other than subsections (a) and (b))
                    shall apply to a civil money penalty under this
                    subparagraph in the same manner as such provisions
                    apply to a penalty or proceeding under section
                    1128A(a).''.
                        (B) Application to ma organizations.--Section
                    1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-
                    27(f)(3)) is amended by adding at the end the
                    following:
                        ``(D) Reporting requirement related to rebate for
                    full-benefit dual eligible medicare drug plan
                    enrollees.--Section 1860D-12(b)(7).''.
                (3) Deposit of rebates into medicare prescription drug
            account.--Section 1860D-16(c) of such Act (42 U.S.C. 1395w-
            116(c)) is amended by adding at the end the following new
            paragraph:
                ``(6) Rebate for full-benefit dual eligible medicare drug
            plan enrollees.--Amounts paid under a rebate agreement under
            section 1860D-2(f) shall be deposited into the Account and
            shall be used to pay for all or part of the gradual elimination
            of the coverage gap under section 1860D-2(b)(7).''.

    SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN ORIGINAL COVERAGE GAP.

        Section 1860D-2 of the Social Security Act (42 U.S.C. 1395w-102),
    as amended by section 1181, is amended--
                (1) in subsection (b)(4)(C)(ii), by inserting ``subject to
            subsection (g)(2)(C),'' after ``(ii)'';
                (2) in subsection (e)(1), in the matter before subparagraph
            (A), by striking ``subsection (f)'' and inserting ``subsections
            (f) and (g)'' after ``this subsection''; and
                (3) by adding at the end the following new subsection:
        ``(g) Requirement for Manufacturer Discount Agreement for Certain
    Qualifying Drugs.--
                ``(1) In general.--In this part, the term `covered part D
            drug' does not include any drug or biologic that is
            manufactured by a manufacturer that has not entered into and
            have in effect for all qualifying drugs (as defined in
            paragraph (5)(A)) a discount agreement described in paragraph
            (2).
                ``(2) Discount agreement.--
                        ``(A) Periodic discounts.--A discount agreement
                    under this paragraph shall require the manufacturer
                    involved to provide, to each PDP sponsor with respect
                    to a prescription drug plan or each MA organization
                    with respect to each MA-PD plan, a discount in an
                    amount specified in paragraph (3) for qualifying drugs
                    (as defined in paragraph (5)(A)) of the manufacturer
                    dispensed to a qualifying enrollee after December 31,
                    2010, insofar as the individual is in the original gap
                    in coverage (as defined in paragraph (5)(E)).
                        ``(B) Discount agreement.--Insofar as not
                    inconsistent with this subsection, the Secretary shall
                    establish terms and conditions of such agreement,
                    including terms and conditions relating to compliance,
                    similar to the terms and conditions for rebate
                    agreements under paragraphs (2), (3), and (4) of
                    section 1927(b), except that--
                                ``(i) discounts shall be applied under this
                            subsection to prescription drug plans and MA-PD
                            plans instead of State plans under title XIX;
                                ``(ii) PDP sponsors and MA organizations
                            shall be responsible, instead of States, for
                            provision of necessary utilization information
                            to drug manufacturers; and
                                ``(iii) sponsors and MA organizations shall
                            be responsible for reporting information on
                            drug-component negotiated price, instead of
                            other manufacturer prices.
                        ``(C) Counting discount toward true out-of-pocket
                    costs.--Under the discount agreement, in applying
                    subsection (b)(4), with regard to subparagraph (C)(i)
                    of such subsection, if a qualified enrollee purchases
                    the qualified drug insofar as the enrollee is in an
                    actual gap of coverage (as defined in paragraph
                    (5)(D)), the amount of the discount under the agreement
                    shall be treated and counted as costs incurred by the
                    plan enrollee.
                ``(3) Discount amount.--The amount of the discount
            specified in this paragraph for a discount period for a plan is
            equal to 50 percent of the amount of the drug-component
            negotiated price (as defined in paragraph (5)(C)) for
            qualifying drugs for the period involved.
                ``(4) Additional terms.--In the case of a discount provided
            under this subsection with respect to a prescription drug plan
            offered by a PDP sponsor or an MA-PD plan offered by an MA
            organization, if a qualified enrollee purchases the qualified
            drug--
                        ``(A) insofar as the enrollee is in an actual gap
                    of coverage (as defined in paragraph (5)(D)), the
                    sponsor or plan shall provide the discount to the
                    enrollee at the time the enrollee pays for the drug;
                    and
                        ``(B) insofar as the enrollee is in the portion of
                    the original gap in coverage (as defined in paragraph
                    (5)(E)) that is not in the actual gap in coverage, the
                    discount shall not be applied against the negotiated
                    price (as defined in subsection (d)(1)(B)) for the
                    purpose of calculating the beneficiary payment.
                ``(5) Definitions.--In this subsection:
                        ``(A) Qualifying drug.--The term `qualifying drug'
                    means, with respect to a prescription drug plan or MA-
                    PD plan, a drug or biological product that--
                                ``(i)(I) is a drug produced or distributed
                            under an original new drug application approved
                            by the Food and Drug Administration, including
                            a drug product marketed by any cross-licensed
                            producers or distributors operating under the
                            new drug application;
                                ``(II) is a drug that was originally
                            marketed under an original new drug application
                            approved by the Food and Drug Administration;
                            or
                                ``(III) is a biological product as approved
                            under Section 351(a) of the Public Health
                            Services Act;
                                ``(ii) is covered under the formulary of
                            the plan; and
                                ``(iii) is dispensed to an individual who
                            is in the original gap in coverage.
                        ``(B) Qualifying enrollee.--The term `qualifying
                    enrollee' means an individual enrolled in a
                    prescription drug plan or MA-PD plan other than such an
                    individual who is a subsidy-eligible individual (as
                    defined in section 1860D-14(a)(3)).
                        ``(C) Drug-component negotiated price.--The term
                    `drug-component negotiated price' means, with respect
                    to a qualifying drug, the negotiated price (as defined
                    in subsection (d)(1)(B)), as determined without regard
                    to any dispensing fee, of the drug under the
                    prescription drug plan or MA-PD plan involved.
                        ``(D) Actual gap in coverage.--The term `actual gap
                    in coverage' means the gap in prescription drug
                    coverage that occurs between the initial coverage limit
                    (as modified under subparagraph (B) of subsection
                    (b)(7)) and the annual out-of-pocket threshold (as
                    modified under subparagraph (C) of such subsection).
                        ``(E) Original gap in coverage.--The term `original
                    in gap coverage' means the gap in prescription drug
                    coverage that would occur between the initial coverage
                    limit (described in subsection (b)(3)) and the out-of-
                    pocket threshold (as defined in subsection (b)(4))(B)
                    if subsection (b)(7) did not apply.''.

    SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMISSION OF CLAIMS BY
                  PHARMACIES LOCATED IN OR CONTRACTING WITH LONG-TERM CARE
                  FACILITIES.

        (a) Part D Submission.--Section 1860D-12(b) of the Social Security
    Act (42 U.S.C. 1395w-112(b)), as amended by section 172(a)(1) of Public
    Law 110-275, is amended by striking paragraph (5) and redesignating
    paragraph (6) and paragraph (7), as added by section 1181(b)(2), as
    paragraph (5) and paragraph (6), respectively.
        (b) Submission to MA-PD Plans.--Section 1857(f)(3) of the Social
    Security Act (42 U.S.C. 1395w-27(f)(3)), as added by section 171(b) of
    Public Law 110-275 and amended by section 172(a)(2) of such Public Law
    and section 1181 of this division, is amended by striking subparagraph
    (B) and redesignating subparagraphs (C) and (D) as subparagraphs (B)
    and (C) respectively.
        (c) Effective Date.--The amendments made by this section shall
    apply for contract years beginning with 2010.

    SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE PROGRAMS
                  AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS
                  TOWARD THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.

        (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security
    Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
                (1) in clause (i), by striking ``and'' at the end;
                (2) in clause (ii)--
                        (A) by striking ``such costs shall be treated as
                    incurred only if'' and inserting ``subject to clause
                    (iii), such costs shall be treated as incurred only
                    if'';
                        (B) by striking ``, under section 1860D-14, or
                    under a State Pharmaceutical Assistance Program''; and
                        (C) by striking the period at the end and inserting
                    ``; and''; and
                (3) by inserting after clause (ii) the following new
            clause:
                                ``(iii) such costs shall be treated as
                            incurred and shall not be considered to be
                            reimbursed under clause (ii) if such costs are
                            borne or paid--
                                        ``(I) under section 1860D-14;
                                        ``(II) under a State Pharmaceutical
                                    Assistance Program;
                                        ``(III) by the Indian Health
                                    Service, an Indian tribe or tribal
                                    organization, or an urban Indian
                                    organization (as defined in section 4
                                    of the Indian Health Care Improvement
                                    Act); or
                                        ``(IV) under an AIDS Drug
                                    Assistance Program under part B of
                                    title XXVI of the Public Health Service
                                    Act.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to costs incurred on or after January 1, 2011.

    SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLLMENT FOR FORMULARY
                  CHANGES THAT ADVERSELY IMPACT AN ENROLLEE.

        (a) In General.--Section 1860D-1(b)(3) of the Social Security Act
    (42 U.S.C. 1395w-101(b)(3)) is amended by adding at the end the
    following new subparagraph:
                        ``(F) Change in formulary resulting in increase in
                    cost-sharing.--
                                ``(i) In general.--Except as provided in
                            clause (ii), in the case of an individual
                            enrolled in a prescription drug plan (or MA-PD
                            plan) who has been prescribed and is using a
                            covered part D drug while so enrolled, if the
                            formulary of the plan is materially changed
                            (other than at the end of a contract year) so
                            to reduce the coverage (or increase the cost-
                            sharing) of the drug under the plan.
                                ``(ii) Exception.--Clause (i) shall not
                            apply in the case that a drug is removed from
                            the formulary of a plan because of a recall or
                            withdrawal of the drug issued by the Food and
                            Drug Administration, because the drug is
                            replaced with a generic drug that is a
                            therapeutic equivalent, or because of
                            utilization management applied to--
                                        ``(I) a drug whose labeling
                                    includes a boxed warning required by
                                    the Food and Drug Administration under
                                    section 210.57(c)(1) of title 21, Code
                                    of Federal Regulations (or a successor
                                    regulation); or
                                        ``(II) a drug required under
                                    subsection (c)(2) of section 505-1 of
                                    the Federal Food, Drug, and Cosmetic
                                    Act to have a Risk Evaluation and
                                    Management Strategy that includes
                                    elements under subsection (f) of such
                                    section.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to contract years beginning on or after January 1, 2011.

                 Subtitle F--Medicare Rural Access Protections

    SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. .

         (a) Additional Telehealth Site.--
                (1) In general.--Paragraph (4)(C)(ii) of section 1834(m) of
            the Social Security Act (42 U.S.C. 1395m(m)) is amended by
            adding at the end the following new subclause:
                                        ``(IX) A renal dialysis facility.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to services furnished on or after January 1, 2011.
        (b) Telehealth Advisory Committee.--
                (1) Establishment.--Section 1868 of the Social Security Act
            (42 U.S.C. 1395ee) is amended--
                        (A) in the heading, by adding at the end the
                    following: ``telehealth advisory committee''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(c) Telehealth Advisory Committee.--
                ``(1) In general.--The Secretary shall appoint a Telehealth
            Advisory Committee (in this subsection referred to as the
            `Advisory Committee') to make recommendations to the Secretary
            on policies of the Centers for Medicare & Medicaid Services
            regarding telehealth services as established under section
            1834(m), including the appropriate addition or deletion of
            services (and HCPCS codes) to those specified in paragraphs
            (4)(F)(i) and (4)(F)(ii) of such section and for authorized
            payment under paragraph (1) of such section.
                ``(2) Membership; terms.--
                        ``(A) Membership.--
                                ``(i) In general.--The Advisory Committee
                            shall be composed of 9 members, to be appointed
                            by the Secretary, of whom--
                                        ``(I) 5 shall be practicing
                                    physicians;
                                        ``(II) 2 shall be practicing non-
                                    physician health care practitioners;
                                    and
                                        ``(III) 2 shall be administrators
                                    of telehealth programs.
                                ``(ii) Requirements for appointing
                            members.--In appointing members of the Advisory
                            Committee, the Secretary shall--
                                        ``(I) ensure that each member has
                                    prior experience with the practice of
                                    telemedicine or telehealth;
                                        ``(II) give preference to
                                    individuals who are currently providing
                                    telemedicine or telehealth services or
                                    who are involved in telemedicine or
                                    telehealth programs;
                                        ``(III) ensure that the membership
                                    of the Advisory Committee represents a
                                    balance of specialties and geographic
                                    regions; and
                                        ``(IV) take into account the
                                    recommendations of stakeholders.
                        ``(B) Terms.--The members of the Advisory Committee
                    shall serve for such term as the Secretary may specify.
                        ``(C) Conflicts of interest.--An advisory committee
                    member may not participate with respect to a particular
                    matter considered in an advisory committee meeting if
                    such member (or an immediate family member of such
                    member) has a financial interest that could be affected
                    by the advice given to the Secretary with respect to
                    such matter.
                ``(3) Meetings.--The Advisory Committee shall meet twice
            each calendar year and at such other times as the Secretary may
            provide.
                ``(4) Permanent committee.--Section 14 of the Federal
            Advisory Committee Act (5 U.S.C. App.) shall not apply to the
            Advisory Committee.''
                (2) Following recommendations.--Section 1834(m)(4)(F) of
            such Act (42 U.S.C. 1395m(m)(4)(F)) is amended by adding at the
            end the following new clause:
                                ``(iii) Recommendations of the telehealth
                            advisory committee.--In making determinations
                            under clauses (i) and (ii), the Secretary shall
                            take into account the recommendations of the
                            Telehealth Advisory Committee (established
                            under section 1868(c)) when adding or deleting
                            services (and HCPCS codes) and in establishing
                            policies of the Centers for Medicare & Medicaid
                            Services regarding the delivery of telehealth
                            services. If the Secretary does not implement
                            such a recommendation, the Secretary shall
                            publish in the Federal Register a statement
                            regarding the reason such recommendation was
                            not implemented.''
                (3) Waiver of administrative limitation.--The Secretary of
            Health and Human Services shall establish the Telehealth
            Advisory Committee under the amendment made by paragraph (1)
            notwithstanding any limitation that may apply to the number of
            advisory committees that may be established (within the
            Department of Health and Human Services or otherwise).
        (c) Credentialing Telemedicine Practitioners.--Section 1834(m) of
    such Act (42 U.S.C. 1395m(m)) is amended by adding at the end the
    following new paragraph:
                ``(5) Hospital credentialing of telemedicine
            practitioners.--A telemedicine practitioner that is
            credentialed by a hospital in compliance with the Joint
            Commission Standards for Telemedicine shall be considered in
            compliance with conditions of participation and reimbursement
            credentialing requirements under this title for telemedicine
            services.''.

    SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

         Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C.
    1395l(t)(7)(D)(i)) is amended--
                (1) in subclause (II)--
                        (A) in the first sentence, by striking ```2010''
                    and inserting ``2012''; and
                        (B) in the second sentence, by striking ``or 2009''
                    and inserting ``, 2009, 2010, or 2011''; and
                (2) in subclause (III), by striking ``January 1, 2010'' and
            inserting ``January 1, 2012''.

    SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.

        Subsection (a) of section 106 of division B of the Tax Relief and
    Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section
    117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
    Law 110-173) and section 124 of the Medicare Improvements for Patients
    and Providers Act of 2008 (Public Law 110-275), is amended by striking
    ``September 30, 2009'' and inserting ``September 30, 2011''.

    SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.

        Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
    4(e)(1)(E)) is amended by striking ``before January 1, 2010'' and
    inserting ``before January 1, 2012''.

    SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN
                  PHYSICIAN PATHOLOGY SERVICES.

        Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
    Improvement and Protection Act of 2000 (as enacted into law by section
    1(a)(6) of Public Law 106-554), as amended by section 732 of the
    Medicare Prescription Drug, Improvement, and Modernization Act of 2003
    (42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief
    and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of
    the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law
    110-173), and section 136 of the Medicare Improvements for Patients and
    Providers Act of 1008 (Public Law 110-275), is amended by striking
    ``and 2009'' and inserting ``2009, 2010, and 2011''.

    SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

        (a) In General.--Section 1834(l)(13) of the Social Security Act (42
    U.S.C. 1395m(l)(13)) is amended--
                (1) in subparagraph (A)--
                        (A) in the matter preceding clause (i), by striking
                    ``before January 1, 2010'' and inserting ``before
                    January 1, 2012''; and
                        (B) in each of clauses (i) and (ii), by striking
                    ``before January 1, 2010'' and inserting ``before
                    January 1, 2012''.
        (b) Air Ambulance Improvements.--Section 146(b)(1) of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 110-
    275) is amended by striking ``ending on December 31, 2009'' and
    inserting ``ending on December 31, 2011''.

                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

      Subtitle A--Improving and Simplifying Financial Assistance for Low
                         Income Medicare Beneficiaries

    SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAVINGS PROGRAM AND LOW-
                  INCOME SUBSIDY PROGRAM.

        (a) Application of Highest Level Permitted Under LIS to All Subsidy
    Eligible Individuals.--
                (1) In general.--Section 1860D-14(a)(1) of the Social
            Security Act (42 U.S.C. 1395w-114(a)(1)) is amended in the
            matter before subparagraph (A), by inserting ``(or, beginning
            with 2012, paragraph (3)(E))'' after ``paragraph (3)(D)''.
                (2) Annual increase in lis resource test.--Section 1860D-
            14(a)(3)(E)(i) of such Act (42 U.S.C. 1395w-114(a)(3)(E)(i)) is
            amended--
                        (A) by striking ``and'' at the end of subclause
                    (I);
                        (B) in subclause (II), by inserting ``(before
                    2012)'' after ``subsequent year'';
                        (C) by striking the period at the end of subclause
                    (II) and inserting a semicolon;
                        (D) by inserting after subclause (II) the following
                    new subclauses:
                                        ``(III) for 2012, $17,000 (or
                                    $34,000 in the case of the combined
                                    value of the individual's assets or
                                    resources and the assets or resources
                                    of the individual's spouse); and
                                        ``(IV) for a subsequent year, the
                                    dollar amounts specified in this
                                    subclause (or subclause (III)) for the
                                    previous year increased by the annual
                                    percentage increase in the consumer
                                    price index (all items; U.S. city
                                    average) as of September of such
                                    previous year.''; and
                        (E) in the last sentence, by inserting ``or (IV)''
                    after ``subclause (II)''.
                (3) Application of lis test under medicare savings
            program.--Section 1905(p)(1)(C) of such Act (42 U.S.C.
            1396d(p)(1)(C)) is amended--
                        (A) by striking ``effective beginning with January
                    1, 2010'' and inserting ``effective for the period
                    beginning with January 1, 2010, and ending with
                    December 31, 2011''; and
                        (B) by inserting before the period at the end the
                    following: ``or, effective beginning with January 1,
                    2012, whose resources (as so determined) do not exceed
                    the maximum resource level applied for the year under
                    subparagraph (E) of section 1860D-14(a)(3) (determined
                    without regard to the life insurance policy exclusion
                    provided under subparagraph (G) of such section)
                    applicable to an individual or to the individual and
                    the individual's spouse (as the case may be)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to eligibility determinations for income-related subsidies and
    medicare cost-sharing furnished for periods beginning on or after
    January 1, 2012.

    SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-
                  INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.

        (a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social
    Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
                (1) by striking ``Institutionalized individuals.--In'' and
            inserting ``Elimination of cost-sharing for certain full-
            benefit dual eligible individuals.--
                                        ``(I) Institutionalized
                                    individuals.--In''; and
                (2) by adding at the end the following new subclause:
                                        ``(II) Certain other individuals.--
                                    In the case of an individual who is a
                                    full-benefit dual eligible individual
                                    and with respect to whom there has been
                                    a determination that but for the
                                    provision of home and community based
                                    care (whether under section 1915, 1932,
                                    or under a waiver under section 1115)
                                    the individual would require the level
                                    of care provided in a hospital or a
                                    nursing facility or intermediate care
                                    facility for the mentally retarded the
                                    cost of which could be reimbursed under
                                    the State plan under title XIX, the
                                    elimination of any beneficiary
                                    coinsurance described in section 1860D-
                                    2(b)(2) (for all amounts through the
                                    total amount of expenditures at which
                                    benefits are available under section
                                    1860D-2(b)(4)).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to drugs dispensed on or after January 1, 2011.

    SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.

        (a) Administrative Verification of Income and Resources Under the
    Low-income Subsidy Program.--
                (1) In general.--Clause (iii) of section 1860D-14(a)(3)(E)
            of the Social Security Act (42 U.S.C. 1395w-114(a)(3)(E)) is
            amended to read as follows:
                                ``(iii) Certification of income and
                            resources.--For purposes of applying this
                            section--
                                        ``(I) an individual shall be
                                    permitted to apply on the basis of
                                    self-certification of income and
                                    resources; and
                                        ``(II) matters attested to in the
                                    application shall be subject to
                                    appropriate methods of verification
                                    without the need of the individual to
                                    provide additional documentation,
                                    except in extraordinary situations as
                                    determined by the Commissioner.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply beginning January 1, 2010.
        (b) Disclosures to Facilitate Identification of Individuals Likely
    to Be Ineligible for the Low-income Assistance Under the Medicare
    Prescription Drug Program to Assist Social Security Administration's
    Outreach to Eligible Individuals.--For provision authorizing disclosure
    of return information to facilitate identification of individuals
    likely to be ineligible for low-income subsidies under Medicare
    prescription drug program, see section 1801.

    SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIMBURSEMENTS FOR
                  RETROACTIVE LOW INCOME SUBSIDY ENROLLMENT.

        (a) In General.--In the case of a retroactive LIS enrollment
    beneficiary who is enrolled under a prescription drug plan under part D
    of title XVIII of the Social Security Act (or an MA-PD plan under part
    C of such title), the beneficiary (or any eligible third party) is
    entitled to reimbursement by the plan for covered drug costs incurred
    by the beneficiary during the retroactive coverage period of the
    beneficiary in accordance with subsection (b) and in the case of such a
    beneficiary described in subsection (c)(4)(A)(i), such reimbursement
    shall be made automatically by the plan upon receipt of appropriate
    notice the beneficiary is eligible for assistance described in such
    subsection (c)(4)(A)(i) without further information required to be
    filed with the plan by the beneficiary.
        (b) Administrative Requirements Relating to Reimbursements.--
                (1) Line-item description.--Each reimbursement made by a
            prescription drug plan or MA-PD plan under subsection (a) shall
            include a line-item description of the items for which the
            reimbursement is made.
                (2) Timing of reimbursements.--A prescription drug plan or
            MA-PD plan must make a reimbursement under subsection (a) to a
            retroactive LIS enrollment beneficiary, with respect to a
            claim, not later than 45 days after--
                        (A) in the case of a beneficiary described in
                    subsection (c)(4)(A)(i), the date on which the plan
                    receives notice from the Secretary that the beneficiary
                    is eligible for assistance described in such
                    subsection; or
                        (B) in the case of a beneficiary described in
                    subsection (c)(4)(A)(ii), the date on which the
                    beneficiary files the claim with the plan.
                (3) Reporting requirement.--For each month beginning with
            January 2011, each prescription drug plan and each MA-PD plan
            shall report to the Secretary the following:
                        (A) The number of claims the plan has readjudicated
                    during the month due to a beneficiary becoming
                    retroactively eligible for subsidies available under
                    section 1860D-14 of the Social Security Act.
                        (B) The total value of the readjudicated claim
                    amount for the month.
                        (C) The Medicare Health Insurance Claims Number of
                    beneficiaries for whom claims were readjudicated.
                        (D) For the claims described in subparagraphs (A)
                    and (B), an attestation to the Administrator of the
                    Centers for Medicare & Medicaid Services of the total
                    amount of reimbursement the plan has provided to
                    beneficiaries for premiums and cost-sharing that the
                    beneficiary overpaid for which the plan received
                    payment from the Centers for Medicare & Medicaid
                    Services.
        (c) Definitions.--For purposes of this section:
                (1) Covered drug costs.--The term ``covered drug costs''
            means, with respect to a retroactive LIS enrollment beneficiary
            enrolled under a prescription drug plan under part D of title
            XVIII of the Social Security Act (or an MA-PD plan under part C
            of such title), the amount by which--
                        (A) the costs incurred by such beneficiary during
                    the retroactive coverage period of the beneficiary for
                    covered part D drugs, premiums, and cost-sharing under
                    such title; exceeds
                        (B) such costs that would have been incurred by
                    such beneficiary during such period if the beneficiary
                    had been both enrolled in the plan and recognized by
                    such plan as qualified during such period for the low
                    income subsidy under section 1860D-14 of the Social
                    Security Act to which the individual is entitled.
                (2) Eligible third party.--The term ``eligible third
            party'' means, with respect to a retroactive LIS enrollment
            beneficiary, an organization or other third party that is owed
            payment on behalf of such beneficiary for covered drug costs
            incurred by such beneficiary during the retroactive coverage
            period of such beneficiary.
                (3) Retroactive coverage period.--The term ``retroactive
            coverage period'' means--
                        (A) with respect to a retroactive LIS enrollment
                    beneficiary described in paragraph (4)(A)(i), the
                    period--
                                (i) beginning on the effective date of the
                            assistance described in such paragraph for
                            which the individual is eligible; and
                                (ii) ending on the date the plan
                            effectuates the status of such individual as so
                            eligible; and
                        (B) with respect to a retroactive LIS enrollment
                    beneficiary described in paragraph (4)(A)(ii), the
                    period--
                                (i) beginning on the date the individual is
                            both entitled to benefits under part A, or
                            enrolled under part B, of title XVIII of the
                            Social Security Act and eligible for medical
                            assistance under a State plan under title XIX
                            of such Act; and
                                (ii) ending on the date the plan
                            effectuates the status of such individual as a
                            full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act).
                (4) Retroactive lis enrollment beneficiary.--
                        (A) In general.--The term ``retroactive LIS
                    enrollment beneficiary'' means an individual who--
                                (i) is enrolled in a prescription drug plan
                            under part D of title XVIII of the Social
                            Security Act (or an MA-PD plan under part C of
                            such title) and subsequently becomes eligible
                            as a full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act), an
                            individual receiving a low-income subsidy under
                            section 1860D-14 of such Act, an individual
                            receiving assistance under the Medicare Savings
                            Program implemented under clauses (i), (iii),
                            and (iv) of section 1902(a)(10)(E) of such Act,
                            or an individual receiving assistance under the
                            supplemental security income program under
                            section 1611 of such Act; or
                                (ii) subject to subparagraph (B)(i), is a
                            full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act) who
                            is automatically enrolled in such a plan under
                            section 1860D-1(b)(1)(C) of such Act.
                        (B) Exception for beneficiaries enrolled in rfp
                    plan.--
                                (i) In general.--In no case shall an
                            individual described in subparagraph (A)(ii)
                            include an individual who is enrolled, pursuant
                            to a RFP contract described in clause (ii), in
                            a prescription drug plan offered by the sponsor
                            of such plan awarded such contract.
                                (ii) RFP contract described.--The RFP
                            contract described in this section is a
                            contract entered into between the Secretary and
                            a sponsor of a prescription drug plan pursuant
                            to the Centers for Medicare & Medicaid
                            Services' request for proposals issued on
                            February 17, 2009, relating to Medicare part D
                            retroactive coverage for certain low income
                            beneficiaries, or a similar subsequent request
                            for proposals.

    SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.

        (a) In General.--Section 1860D-1(b)(1)(C) of the Social Security
    Act (42 U.S.C. 1395w-101(b)(1)(C)) is amended by adding after ``PDP
    region'' the following: ``or through use of an intelligent assignment
    process that is designed to maximize the access of such individual to
    necessary prescription drugs while minimizing costs to such individual
    and to the program under this part to the greatest extent possible. In
    the case the Secretary enrolls such individuals through use of an
    intelligent assignment process, such process shall take into account
    the extent to which prescription drugs necessary for the individual are
    covered in the case of a PDP sponsor of a prescription drug plan that
    uses a formulary, the use of prior authorization or other restrictions
    on access to coverage of such prescription drugs by such a sponsor, and
    the overall quality of a prescription drug plan as measured by quality
    ratings established by the Secretary''
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect for contract years beginning with 2012.

    SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC ENROLLMENT PROCESS
                  FOR CERTAIN SUBSIDY ELIGIBLE INDIVIDUALS.

        (a) Special Enrollment Period.--Section 1860D-1(b)(3)(D) of the
    Social Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended to read
    as follows:
                        ``(D) Subsidy eligible individuals.--In the case of
                    an individual (as determined by the Secretary) who is
                    determined under subparagraph (B) of section 1860D-
                    14(a)(3) to be a subsidy eligible individual.''.
        (b) Automatic Enrollment.--Section 1860D-1(b)(1) of the Social
    Security Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at the
    end the following new subparagraph:
                        ``(D) Special rule for subsidy eligible
                    individuals.--The process established under
                    subparagraph (A) shall include, in the case of an
                    individual described in section 1860D-1(b)(3)(D) who
                    fails to enroll in a prescription drug plan or an MA-PD
                    plan during the special enrollment established under
                    such section applicable to such individual, the
                    application of the assignment process described in
                    subparagraph (C) to such individual in the same manner
                    as such assignment process applies to a part D eligible
                    individual described in such subparagraph (C). Nothing
                    in the previous sentence shall prevent an individual
                    described in such sentence from declining enrollment in
                    a plan determined appropriate by the Secretary (or in
                    the program under this part) or from changing such
                    enrollment.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to subsidy determinations made for months beginning with January
    2011.

    SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO REBATE IN CALCULATION OF
                  LOW INCOME SUBSIDY BENCHMARK.

        (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social
    Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by
    inserting before the period the following: ``before the application of
    the monthly rebate computed under section 1854(b)(1)(C)(i) for that
    plan and year involved''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to subsidy determinations made for months beginning with January
    2011.

                    Subtitle B--Reducing Health Disparities

    SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.

        (a) Ensuring Effective Communication by the Centers for Medicare &
    Medicaid Services.--
                (1) Study on medicare payments for language services.--The
            Secretary of Health and Human Services shall conduct a study
            that examines the extent to which Medicare service providers
            utilize, offer, or make available language services for
            beneficiaries who are limited English proficient and ways that
            Medicare should develop payment systems for language services.
                (2) Analyses.--The study shall include an analysis of each
            of the following:
                        (A) How to develop and structure appropriate
                    payment systems for language services for all Medicare
                    service providers.
                        (B) The feasibility of adopting a payment
                    methodology for on-site interpreters, including
                    interpreters who work as independent contractors and
                    interpreters who work for agencies that provide on-site
                    interpretation, pursuant to which such interpreters
                    could directly bill Medicare for services provided in
                    support of physician office services for an LEP
                    Medicare patient.
                        (C) The feasibility of Medicare contracting
                    directly with agencies that provide off-site
                    interpretation including telephonic and video
                    interpretation pursuant to which such contractors could
                    directly bill Medicare for the services provided in
                    support of physician office services for an LEP
                    Medicare patient.
                        (D) The feasibility of modifying the existing
                    Medicare resource-based relative value scale (RBRVS) by
                    using adjustments (such as multipliers or add-ons) when
                    a patient is LEP.
                        (E) How each of options described in a previous
                    paragraph would be funded and how such funding would
                    affect physician payments, a physician's practice, and
                    beneficiary cost-sharing.
                        (F) The extent to which providers under parts A and
                    B of title XVIII of the Social Security Act, MA
                    organizations offering Medicare Advantage plans under
                    part C of such title and PDP sponsors of a prescription
                    drug plan under part D of such title utilize, offer, or
                    make available language services for beneficiaries with
                    limited English proficiency.
                        (G) The nature and type of language services
                    provided by States under title XIX of the Social
                    Security Act and the extent to which such services
                    could be utilized by beneficiaries and providers under
                    title XVIII of such Act.
                (3) Variation in payment system described.--The payment
            systems described in paragraph (2)(A) may allow variations
            based upon types of service providers, available delivery
            methods, and costs for providing language services including
            such factors as--
                        (A) the type of language services provided (such as
                    provision of health care or health care related
                    services directly in a non-English language by a
                    bilingual provider or use of an interpreter);
                        (B) type of interpretation services provided (such
                    as in-person, telephonic, video interpretation);
                        (C) the methods and costs of providing language
                    services (including the costs of providing language
                    services with internal staff or through contract with
                    external independent contractors or agencies, or both);
                        (D) providing services for languages not frequently
                    encountered in the United States; and
                        (E) providing services in rural areas.
                (4) Report.--The Secretary shall submit a report on the
            study conducted under subsection (a) to appropriate committees
            of Congress not later than 12 months after the date of the
            enactment of this Act.
                (5) Exemption from paperwork reduction act.--Chapter 35 of
            title 44, United States Code (commonly known as the ``Paperwork
            Reduction Act'' ), shall not apply for purposes of carrying out
            this subsection.
                (6) Authorization of appropriations.--There is authorized
            to be appropriated to carry out this subsection such sums as
            are necessary.
        (b) Health Plans.--Section 1857(g)(1) of the Social Security Act
    (42 U.S.C. 1395w-27(g)(1)) is amended--
                (1) by striking ``or'' at the end of subparagraph (F);
                (2) by adding ``or'' at the end of subparagraph (G); and
                (3) by inserting after subparagraph (G) the following new
            subparagraph:
                        ``(H) fails substantially to provide language
                    services to limited English proficient beneficiaries
                    enrolled in the plan that are required under law;''.

    SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR MEDICARE BENEFICIARIES
                  WITH LIMITED ENGLISH PROFICIENCY BY PROVIDING
                  REIMBURSEMENT FOR CULTURALLY AND LINGUISTICALLY
                  APPROPRIATE SERVICES.

        (a) In General.--Not later than 6 months after the date of the
    completion of the study described in section 1221(a), the Secretary,
    acting through the Centers for Medicare & Medicaid Services, shall
    carry out a demonstration program under which the Secretary shall award
    not fewer than 24 3-year grants to eligible Medicare service providers
    (as described in subsection (b)(1)) to improve effective communication
    between such providers and Medicare beneficiaries who are living in
    communities where racial and ethnic minorities, including populations
    that face language barriers, are underserved with respect to such
    services. In designing and carrying out the demonstration the Secretary
    shall take into consideration the results of the study conducted under
    section 1221(a) and adjust, as appropriate, the distribution of grants
    so as to better target Medicare beneficiaries who are in the greatest
    need of language services. The Secretary shall not authorize a grant
    larger than $500,000 over three years for any grantee.
        (b) Eligibility; Priority.--
                (1) Eligibility.--To be eligible to receive a grant under
            subsection (a) an entity shall--
                        (A) be--
                                (i) a provider of services under part A of
                            title XVIII of the Social Security Act;
                                (ii) a service provider under part B of
                            such title;
                                (iii) a part C organization offering a
                            Medicare part C plan under part C of such
                            title; or
                                (iv) a PDP sponsor of a prescription drug
                            plan under part D of such title; and
                        (B) prepare and submit to the Secretary an
                    application, at such time, in such manner, and
                    accompanied by such additional information as the
                    Secretary may require.
                (2) Priority.--
                        (A) Distribution.--To the extent feasible, in
                    awarding grants under this section, the Secretary shall
                    award--
                                (i) at least 6 grants to providers of
                            services described in paragraph (1)(A)(i);
                                (ii) at least 6 grants to service providers
                            described in paragraph (1)(A)(ii);
                                (iii) at least 6 grants to organizations
                            described in paragraph (1)(A)(iii); and
                                (iv) at least 6 grants to sponsors
                            described in paragraph (1)(A)(iv).
                        (B) For community organizations.--The Secretary
                    shall give priority to applicants that have developed
                    partnerships with community organizations or with
                    agencies with experience in language access.
                        (C) Variation in grantees.--The Secretary shall
                    also ensure that the grantees under this section
                    represent, among other factors, variations in--
                                (i) different types of language services
                            provided and of service providers and
                            organizations under parts A through D of title
                            XVIII of the Social Security Act;
                                (ii) languages needed and their frequency
                            of use;
                                (iii) urban and rural settings;
                                (iv) at least two geographic regions, as
                            defined by the Secretary; and
                                (v) at least two large metropolitan
                            statistical areas with diverse populations.
        (c) Use of Funds.--
                (1) In general.--A grantee shall use grant funds received
            under this section to pay for the provision of competent
            language services to Medicare beneficiaries who are limited
            English proficient. Competent interpreter services may be
            provided through on-site interpretation, telephonic
            interpretation, or video interpretation or direct provision of
            health care or health care related services by a bilingual
            health care provider. A grantee may use bilingual providers,
            staff, or contract interpreters. A grantee may use grant funds
            to pay for competent translation services. A grantee may use up
            to 10 percent of the grant funds to pay for administrative
            costs associated with the provision of competent language
            services and for reporting required under subsection (e).
                (2) Organizations.--Grantees that are part C organizations
            or PDP sponsors must ensure that their network providers
            receive at least 50 percent of the grant funds to pay for the
            provision of competent language services to Medicare
            beneficiaries who are limited English proficient, including
            physicians and pharmacies.
                (3) Determination of payments for language services.--
            Payments to grantees shall be calculated based on the estimated
            numbers of limited English proficient Medicare beneficiaries in
            a grantee's service area utilizing--
                        (A) data on the numbers of limited English
                    proficient individuals who speak English less than
                    ``very well'' from the most recently available data
                    from the Bureau of the Census or other State-based
                    study the Secretary determines likely to yield accurate
                    data regarding the number of such individuals served by
                    the grantee; or
                        (B) the grantee's own data if the grantee routinely
                    collects data on Medicare beneficiaries' primary
                    language in a manner determined by the Secretary to
                    yield accurate data and such data shows greater numbers
                    of limited English proficient individuals than the data
                    listed in subparagraph (A).
                (4) Limitations.--
                        (A) Reporting.--Payments shall only be provided
                    under this section to grantees that report their costs
                    of providing language services as required under
                    subsection (e) and may be modified annually at the
                    discretion of the Secretary. If a grantee fails to
                    provide the reports under such section for the first
                    year of a grant, the Secretary may terminate the grant
                    and solicit applications from new grantees to
                    participate in the subsequent two years of the
                    demonstration program.
                        (B) Type of services.--
                                (i) In general.--Subject to clause (ii),
                            payments shall be provided under this section
                            only to grantees that utilize competent
                            bilingual staff or competent interpreter or
                            translation services which--
                                        (I) if the grantee operates in a
                                    State that has statewide health care
                                    interpreter standards, meet the State
                                    standards currently in effect; or
                                        (II) if the grantee operates in a
                                    State that does not have statewide
                                    health care interpreter standards,
                                    utilizes competent interpreters who
                                    follow the National Council on
                                    Interpreting in Health Care's Code of
                                    Ethics and Standards of Practice.
                                (ii) Exemptions.--The requirements of
                            clause (i) shall not apply--
                                        (I) in the case of a Medicare
                                    beneficiary who is limited English
                                    proficient (who has been informed in
                                    the beneficiary's primary language of
                                    the availability of free interpreter
                                    and translation services) and who
                                    requests the use of family, friends, or
                                    other persons untrained in
                                    interpretation or translation and the
                                    grantee documents the request in the
                                    beneficiary's record; and
                                        (II) in the case of a medical
                                    emergency where the delay directly
                                    associated with obtaining a competent
                                    interpreter or translation services
                                    would jeopardize the health of the
                                    patient.
                            Nothing in clause (ii)(II) shall be construed
                            to exempt emergency rooms or similar entities
                            that regularly provide health care services in
                            medical emergencies from having in place
                            systems to provide competent interpreter and
                            translation services without undue delay.
        (d) Assurances.--Grantees under this section shall--
                (1) ensure that appropriate clinical and support staff
            receive ongoing education and training in linguistically
            appropriate service delivery;
                (2) ensure the linguistic competence of bilingual
            providers;
                (3) offer and provide appropriate language services at no
            additional charge to each patient with limited English
            proficiency at all points of contact, in a timely manner during
            all hours of operation;
                (4) notify Medicare beneficiaries of their right to receive
            language services in their primary language;
                (5) post signage in the languages of the commonly
            encountered group or groups present in the service area of the
            organization; and
                (6) ensure that--
                        (A) primary language data are collected for
                    recipients of language services; and
                        (B) consistent with the privacy protections
                    provided under the regulations promulgated pursuant to
                    section 264(c) of the Health Insurance Portability and
                    Accountability Act of 1996 (42 U.S.C. 1320d-2 note), if
                    the recipient of language services is a minor or is
                    incapacitated, the primary language of the parent or
                    legal guardian is collected and utilized.
        (e) Reporting Requirements.--Grantees under this section shall
    provide the Secretary with reports at the conclusion of the each year
    of a grant under this section. Each report shall include at least the
    following information:
                (1) The number of Medicare beneficiaries to whom language
            services are provided.
                (2) The languages of those Medicare beneficiaries.
                (3) The types of language services provided (such as
            provision of services directly in non-English language by a
            bilingual health care provider or use of an interpreter).
                (4) Type of interpretation (such as in-person, telephonic,
            or video interpretation).
                (5) The methods of providing language services (such as
            staff or contract with external independent contractors or
            agencies).
                (6) The length of time for each interpretation encounter.
                (7) The costs of providing language services (which may be
            actual or estimated, as determined by the Secretary).
        (f) No Cost Sharing.--Limited English proficient Medicare
    beneficiaries shall not have to pay cost-sharing or co-pays for
    language services provided through this demonstration program.
        (g) Evaluation and Report.--The Secretary shall conduct an
    evaluation of the demonstration program under this section and shall
    submit to the appropriate committees of Congress a report not later
    than 1 year after the completion of the program. The report shall
    include the following:
                (1) An analysis of the patient outcomes and costs of
            furnishing care to the limited English proficient Medicare
            beneficiaries participating in the project as compared to such
            outcomes and costs for limited English proficient Medicare
            beneficiaries not participating.
                (2) The effect of delivering culturally and linguistically
            appropriate services on beneficiary access to care, utilization
            of services, efficiency and cost-effectiveness of health care
            delivery, patient satisfaction, and select health outcomes.
                (3) Recommendations, if any, regarding the extension of
            such project to the entire Medicare program.
        (h) General Provisions.--Nothing in this section shall be construed
    to limit otherwise existing obligations of recipients of Federal
    financial assistance under title VI of the Civil Rights Act of 1964 (42
    U.S.C. 2000(d) et seq.) or any other statute.
        (i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $16,000,000 for each fiscal year
    of the demonstration program.

    SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS SERVICES.

        (a) In General.--The Secretary of Health and Human Services shall
    enter into an arrangement with the Institute of Medicine under which
    the Institute will prepare and publish, not later than 3 years after
    the date of the enactment of this Act, a report on the impact of
    language access services on the health and health care of limited
    English proficient populations.
        (b) Contents.--Such report shall include--
                (1) recommendations on the development and implementation
            of policies and practices by health care organizations and
            providers for limited English proficient patient populations;
                (2) a description of the effect of providing language
            access services on quality of health care and access to care
            and reduced medical error; and
                (3) a description of the costs associated with or savings
            related to provision of language access services.

    SEC. 1224. DEFINITIONS.

        In this subtitle:
                (1) Bilingual.--The term ``bilingual'' with respect to an
            individual means a person who has sufficient degree of
            proficiency in two languages and can ensure effective
            communication can occur in both languages.
                (2) Competent interpreter services.--The term ``competent
            interpreter services'' means a trans-language rendition of a
            spoken message in which the interpreter comprehends the source
            language and can speak comprehensively in the target language
            to convey the meaning intended in the source language. The
            interpreter knows health and health-related terminology and
            provides accurate interpretations by choosing equivalent
            expressions that convey the best matching and meaning to the
            source language and captures, to the greatest possible extent,
            all nuances intended in the source message.
                (3) Competent translation services.--The term ``competent
            translation services'' means a trans-language rendition of a
            written document in which the translator comprehends the source
            language and can write comprehensively in the target language
            to convey the meaning intended in the source language. The
            translator knows health and health-related terminology and
            provides accurate translations by choosing equivalent
            expressions that convey the best matching and meaning to the
            source language and captures, to the greatest possible extent,
            all nuances intended in the source document.
                (4) Effective communication.--The term ``effective
            communication'' means an exchange of information between the
            provider of health care or health care-related services and the
            limited English proficient recipient of such services that
            enables limited English proficient individuals to access,
            understand, and benefit from health care or health care-related
            services.
                (5) Interpreting/interpretation.--The terms
            ``interpreting'' and ``interpretation'' mean the transmission
            of a spoken message from one language into another, faithfully,
            accurately, and objectively.
                (6) Health care services.--The term ``health care
            services'' means services that address physical as well as
            mental health conditions in all care settings.
                (7) Health care-related services.--The term ``health care-
            related services'' means human or social services programs or
            activities that provide access, referrals or links to health
            care.
                (8) Language access.--The term ``language access'' means
            the provision of language services to an LEP individual
            designed to enhance that individual's access to, understanding
            of or benefit from health care or health care-related services.
                (9) Language services.--The term ``language services''
            means provision of health care services directly in a non-
            English language, interpretation, translation, and non-English
            signage.
                (10) Limited english proficient.--The term ``limited
            English proficient'' or ``LEP'' with respect to an individual
            means an individual who speaks a primary language other than
            English and who cannot speak, read, write or understand the
            English language at a level that permits the individual to
            effectively communicate with clinical or nonclinical staff at
            an entity providing health care or health care related
            services.
                (11) Medicare beneficiary.--The term ``Medicare
            beneficiary'' means an individual entitled to benefits under
            part A of title XVIII of the Social Security Act or enrolled
            under part B of such title.
                (12) Medicare program.--The term ``Medicare program'' means
            the programs under parts A through D of title XVIII of the
            Social Security Act.
                (13) Service provider.--The term ``service provider''
            includes all suppliers, providers of services, or entities
            under contract to provide coverage, items or services under any
            part of title XVIII of the Social Security Act.

                     Subtitle C--Miscellaneous Improvements

    SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.

         Section 1833(g)(5) of the Social Security Act (42 U.S.C.
    1395l(g)(5)), as amended by section 141 of the Medicare Improvements
    for Patients and Providers Act of 2008 (Public Law 110-275), is amended
    by striking ``December 31, 2009'' and inserting ``December 31, 2011''.

    SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS FOR
                  KIDNEY TRANSPLANT PATIENTS AND OTHER RENAL DIALYSIS
                  PROVISIONS.

        (a) Provision of Appropriate Coverage of Immunosuppressive Drugs
    Under the Medicare Program for Kidney Transplant Recipients.--
                (1) Continued entitlement to immunosuppressive drugs.--
                        (A) Kidney transplant recipients.--Section
                    226A(b)(2) of the Social Security Act (42 U.S.C. 426-
                    1(b)(2)) is amended by inserting ``(except for coverage
                    of immunosuppressive drugs under section
                    1861(s)(2)(J))'' before ``, with the thirty-sixth
                    month''.
                        (B) Application.--Section 1836 of such Act (42
                    U.S.C. 1395o) is amended--
                                (i) by striking ``Every individual who''
                            and inserting ``(a) In General.--Every
                            individual who''; and
                                (ii) by adding at the end the following new
                            subsection:
        ``(b) Special Rules Applicable to Individuals Only Eligible for
    Coverage of Immunosuppressive Drugs.--
                ``(1) In general.--In the case of an individual whose
            eligibility for benefits under this title has ended on or after
            January 1, 2012, except for the coverage of immunosuppressive
            drugs by reason of section 226A(b)(2), the following rules
            shall apply:
                        ``(A) The individual shall be deemed to be enrolled
                    under this part for purposes of receiving coverage of
                    such drugs.
                        ``(B) The individual shall be responsible for
                    providing for payment of the portion of the premium
                    under section 1839 which is not covered under the
                    Medicare savings program (as defined in section
                    1144(c)(7)) in order to receive such coverage.
                        ``(C) The provision of such drugs shall be subject
                    to the application of--
                                ``(i) the deductible under section 1833(b);
                            and
                                ``(ii) the coinsurance amount applicable
                            for such drugs (as determined under this part).
                        ``(D) If the individual is an inpatient of a
                    hospital or other entity, the individual is entitled to
                    receive coverage of such drugs under this part.
                ``(2) Establishment of procedures in order to implement
            coverage.--The Secretary shall establish procedures for--
                        ``(A) identifying individuals that are entitled to
                    coverage of immunosuppressive drugs by reason of
                    section 226A(b)(2); and
                        ``(B) distinguishing such individuals from
                    individuals that are enrolled under this part for the
                    complete package of benefits under this part.''.
                        (C) Technical amendment to correct duplicate
                    subsection designation.--Subsection (c) of section 226A
                    of such Act (42 U.S.C. 426-1), as added by section
                    201(a)(3)(D)(ii) of the Social Security Independence
                    and Program Improvements Act of 1994 (Public Law 103-
                    296; 108 Stat. 1497), is redesignated as subsection
                    (d).
                (2) Extension of secondary payer requirements for esrd
            beneficiaries.--Section 1862(b)(1)(C) of such Act (42 U.S.C.
            1395y(b)(1)(C)) is amended by adding at the end the following
            new sentence: ``With regard to immunosuppressive drugs
            furnished on or after the date of the enactment of the
            America's Affordable Health Choices Act of 2009, this
            subparagraph shall be applied without regard to any time
            limitation.''.
        (b) Medicare Coverage for ESRD Patients.--Section 1881 of such Act
    is further amended--
                (1) in subsection (b)(14)(B)(iii), by inserting ``,
            including oral drugs that are not the oral equivalent of an
            intravenous drug (such as oral phosphate binders and
            calcimimetics),'' after ``other drugs and biologicals'';
                (2) in subsection (b)(14)(E)(ii)--
                        (A) in the first sentence--
                                (i) by striking ``a one-time election to be
                            excluded from the phase-in'' and inserting ``an
                            election, with respect to 2011, 2012, or 2013,
                            to be excluded from the phase-in (or the
                            remainder of the phase-in)''; and
                                (ii) by adding before the period at the end
                            the following: ``for such year and for each
                            subsequent year during the phase-in described
                            in clause (i)''; and
                        (B) in the second sentence--
                                (i) by striking ``January 1, 2011'' and
                            inserting ``the first date of such year''; and
                                (ii) by inserting ``and at a time'' after
                            ``form and manner''; and
                (3) in subsection (h)(4)(E), by striking ``lesser'' and
            inserting ``greater''.

    SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.

        (a) Medicare.--
                (1) In general.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x) is amended--
                        (A) in subsection (s)(2)--
                                (i) by striking ``and'' at the end of
                            subparagraph (DD);
                                (ii) by adding ``and'' at the end of
                            subparagraph (EE); and
                                (iii) by adding at the end the following
                            new subparagraph:
                ``(FF) advance care planning consultation (as defined in
            subsection (hhh)(1));''; and
                        (B) by adding at the end the following new
                    subsection:

                      ``Advance Care Planning Consultation

        ``(hhh)(1) Subject to paragraphs (3) and (4), the term `advance
    care planning consultation' means a consultation between the individual
    and a practitioner described in paragraph (2) regarding advance care
    planning, if, subject to paragraph (3), the individual involved has not
    had such a consultation within the last 5 years. Such consultation
    shall include the following:
                ``(A) An explanation by the practitioner of advance care
            planning, including key questions and considerations, important
            steps, and suggested people to talk to.
                ``(B) An explanation by the practitioner of advance
            directives, including living wills and durable powers of
            attorney, and their uses.
                ``(C) An explanation by the practitioner of the role and
            responsibilities of a health care proxy.
                ``(D) The provision by the practitioner of a list of
            national and State-specific resources to assist consumers and
            their families with advance care planning, including the
            national toll-free hotline, the advance care planning
            clearinghouses, and State legal service organizations
            (including those funded through the Older Americans Act of
            1965).
                ``(E) An explanation by the practitioner of the continuum
            of end-of-life services and supports available, including
            palliative care and hospice, and benefits for such services and
            supports that are available under this title.
                ``(F)(i) Subject to clause (ii), an explanation of orders
            regarding life sustaining treatment or similar orders, which
            shall include--
                        ``(I) the reasons why the development of such an
                    order is beneficial to the individual and the
                    individual's family and the reasons why such an order
                    should be updated periodically as the health of the
                    individual changes;
                        ``(II) the information needed for an individual or
                    legal surrogate to make informed decisions regarding
                    the completion of such an order; and
                        ``(III) the identification of resources that an
                    individual may use to determine the requirements of the
                    State in which such individual resides so that the
                    treatment wishes of that individual will be carried out
                    if the individual is unable to communicate those
                    wishes, including requirements regarding the
                    designation of a surrogate decisionmaker (also known as
                    a health care proxy).
                ``(ii) The Secretary shall limit the requirement for
            explanations under clause (i) to consultations furnished in a
            State--
                        ``(I) in which all legal barriers have been
                    addressed for enabling orders for life sustaining
                    treatment to constitute a set of medical orders
                    respected across all care settings; and
                        ``(II) that has in effect a program for orders for
                    life sustaining treatment described in clause (iii).
                ``(iii) A program for orders for life sustaining treatment
            for a States described in this clause is a program that--
                        ``(I) ensures such orders are standardized and
                    uniquely identifiable throughout the State;
                        ``(II) distributes or makes accessible such orders
                    to physicians and other health professionals that
                    (acting within the scope of the professional's
                    authority under State law) may sign orders for life
                    sustaining treatment;
                        ``(III) provides training for health care
                    professionals across the continuum of care about the
                    goals and use of orders for life sustaining treatment;
                    and
                        ``(IV) is guided by a coalition of stakeholders
                    includes representatives from emergency medical
                    services, emergency department physicians or nurses,
                    state long-term care association, state medical
                    association, state surveyors, agency responsible for
                    senior services, state department of health, state
                    hospital association, home health association, state
                    bar association, and state hospice association.
        ``(2) A practitioner described in this paragraph is--
                ``(A) a physician (as defined in subsection (r)(1)); and
                ``(B) a nurse practitioner or physician assistant who has
            the authority under State law to sign orders for life
            sustaining treatments.
        ``(3)(A) An initial preventive physical examination under
    subsection (WW), including any related discussion during such
    examination, shall not be considered an advance care planning
    consultation for purposes of applying the 5-year limitation under
    paragraph (1).
        ``(B) An advance care planning consultation with respect to an
    individual may be conducted more frequently than provided under
    paragraph (1) if there is a significant change in the health condition
    of the individual, including diagnosis of a chronic, progressive, life-
    limiting disease, a life-threatening or terminal diagnosis or life-
    threatening injury, or upon admission to a skilled nursing facility, a
    long-term care facility (as defined by the Secretary), or a hospice
    program.
        ``(4) A consultation under this subsection may include the
    formulation of an order regarding life sustaining treatment or a
    similar order.
        ``(5)(A) For purposes of this section, the term `order regarding
    life sustaining treatment' means, with respect to an individual, an
    actionable medical order relating to the treatment of that individual
    that--
                ``(i) is signed and dated by a physician (as defined in
            subsection (r)(1)) or another health care professional (as
            specified by the Secretary and who is acting within the scope
            of the professional's authority under State law in signing such
            an order, including a nurse practitioner or physician
            assistant) and is in a form that permits it to stay with the
            individual and be followed by health care professionals and
            providers across the continuum of care;
                ``(ii) effectively communicates the individual's
            preferences regarding life sustaining treatment, including an
            indication of the treatment and care desired by the individual;
                ``(iii) is uniquely identifiable and standardized within a
            given locality, region, or State (as identified by the
            Secretary); and
                ``(iv) may incorporate any advance directive (as defined in
            section 1866(f)(3)) if executed by the individual.
        ``(B) The level of treatment indicated under subparagraph (A)(ii)
    may range from an indication for full treatment to an indication to
    limit some or all or specified interventions. Such indicated levels of
    treatment may include indications respecting, among other items--
                ``(i) the intensity of medical intervention if the patient
            is pulse less, apneic, or has serious cardiac or pulmonary
            problems;
                ``(ii) the individual's desire regarding transfer to a
            hospital or remaining at the current care setting;
                ``(iii) the use of antibiotics; and
                ``(iv) the use of artificially administered nutrition and
            hydration.''.
                (2) Payment.--Section 1848(j)(3) of such Act (42 U.S.C.
            1395w-4(j)(3)) is amended by inserting ``(2)(FF),'' after
            ``(2)(EE),''.
                (3) Frequency limitation.--Section 1862(a) of such Act (42
            U.S.C. 1395y(a)) is amended--
                        (A) in paragraph (1)--
                                (i) in subparagraph (N), by striking
                            ``and'' at the end;
                                (ii) in subparagraph (O) by striking the
                            semicolon at the end and inserting ``, and'';
                            and
                                (iii) by adding at the end the following
                            new subparagraph:
                        ``(P) in the case of advance care planning
                    consultations (as defined in section 1861(hhh)(1)),
                    which are performed more frequently than is covered
                    under such section;''; and
                        (B) in paragraph (7), by striking ``or (K)'' and
                    inserting ``(K), or (P)''.
                (4) Effective date.--The amendments made by this subsection
            shall apply to consultations furnished on or after January 1,
            2011.
        (b) Expansion of Physician Quality Reporting Initiative for End of
    Life Care.--
                (1) Physician's quality reporting initiative.--Section
            1848(k)(2) of the Social Security Act (42 U.S.C. 1395w-4(k)(2))
            is amended by adding at the end the following new subparagraph:
                        ``(E) Physician's quality reporting initiative.--
                                ``(i) In general.--For purposes of
                            reporting data on quality measures for covered
                            professional services furnished during 2011 and
                            any subsequent year, to the extent that
                            measures are available, the Secretary shall
                            include quality measures on end of life care
                            and advanced care planning that have been
                            adopted or endorsed by a consensus-based
                            organization, if appropriate. Such measures
                            shall measure both the creation of and
                            adherence to orders for life-sustaining
                            treatment.
                                ``(ii) Proposed set of measures.--The
                            Secretary shall publish in the Federal Register
                            proposed quality measures on end of life care
                            and advanced care planning that the Secretary
                            determines are described in subparagraph (A)
                            and would be appropriate for eligible
                            professionals to use to submit data to the
                            Secretary. The Secretary shall provide for a
                            period of public comment on such set of
                            measures before finalizing such proposed
                            measures.''.
        (c) Inclusion of Information in Medicare & You Handbook.--
                (1) Medicare & you handbook.--
                        (A) In general.--Not later than 1 year after the
                    date of the enactment of this Act, the Secretary of
                    Health and Human Services shall update the online
                    version of the Medicare & You Handbook to include the
                    following:
                                (i) An explanation of advance care planning
                            and advance directives, including--
                                        (I) living wills;
                                        (II) durable power of attorney;
                                        (III) orders of life-sustaining
                                    treatment; and
                                        (IV) health care proxies.
                                (ii) A description of Federal and State
                            resources available to assist individuals and
                            their families with advance care planning and
                            advance directives, including--
                                        (I) available State legal service
                                    organizations to assist individuals
                                    with advance care planning, including
                                    those organizations that receive
                                    funding pursuant to the Older Americans
                                    Act of 1965 (42 U.S.C. 93001 et seq.);
                                        (II) website links or addresses for
                                    State-specific advance directive forms;
                                    and
                                        (III) any additional information,
                                    as determined by the Secretary.
                        (B) Update of paper and subsequent versions.--The
                    Secretary shall include the information described in
                    subparagraph (A) in all paper and electronic versions
                    of the Medicare & You Handbook that are published on or
                    after the date that is 1 year after the date of the
                    enactment of this Act.

    SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND WAIVER OF LIMITED
                  ENROLLMENT PENALTY FOR TRICARE BENEFICIARIES.

        (a) Part B Special Enrollment Period.--
                (1) In general.--Section 1837 of the Social Security Act
            (42 U.S.C. 1395p) is amended by adding at the end the following
            new subsection:
        ``(l)(1) In the case of any individual who is a covered beneficiary
    (as defined in section 1072(5) of title 10, United States Code) at the
    time the individual is entitled to hospital insurance benefits under
    part A under section 226(b) or section 226A and who is eligible to
    enroll but who has elected not to enroll (or to be deemed enrolled)
    during the individual's initial enrollment period, there shall be a
    special enrollment period described in paragraph (2).
        ``(2) The special enrollment period described in this paragraph,
    with respect to an individual, is the 12-month period beginning on the
    day after the last day of the initial enrollment period of the
    individual or, if later, the 12-month period beginning with the month
    the individual is notified of enrollment under this section.
        ``(3) In the case of an individual who enrolls during the special
    enrollment period provided under paragraph (1), the coverage period
    under this part shall begin on the first day of the month in which the
    individual enrolls or, at the option of the individual, on the first
    day of the second month following the last month of the individual's
    initial enrollment period.
        ``(4) The Secretary of Defense shall establish a method for
    identifying individuals described in paragraph (1) and providing notice
    to them of their eligibility for enrollment during the special
    enrollment period described in paragraph (2).''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to elections made on or after the date of the
            enactment of this Act.
        (b) Waiver of Increase of Premium.--
                (1) In general.--Section 1839(b) of the Social Security Act
            (42 U.S.C. 1395r(b)) is amended by striking ``section
            1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of
            section 1837''.
                (2) Effective date.--
                        (A) In general.--The amendment made by paragraph
                    (1) shall apply with respect to elections made on or
                    after the date of the enactment of this Act.
                        (B) Rebates for certain disabled and esrd
                    beneficiaries.--
                                (i) In general.--With respect to premiums
                            for months on or after January 2005 and before
                            the month of the enactment of this Act, no
                            increase in the premium shall be effected for a
                            month in the case of any individual who is a
                            covered beneficiary (as defined in section
                            1072(5) of title 10, United States Code) at the
                            time the individual is entitled to hospital
                            insurance benefits under part A of title XVIII
                            of the Social Security Act under section 226(b)
                            or 226A of such Act, and who is eligible to
                            enroll, but who has elected not to enroll (or
                            to be deemed enrolled), during the individual's
                            initial enrollment period, and who enrolls
                            under this part within the 12-month period that
                            begins on the first day of the month after the
                            month of notification of entitlement under this
                            part.
                                (ii) Consultation with department of
                            defense.--The Secretary of Health and Human
                            Services shall consult with the Secretary of
                            Defense in identifying individuals described in
                            this paragraph.
                                (iii) Rebates.--The Secretary of Health and
                            Human Services shall establish a method for
                            providing rebates of premium increases paid for
                            months on or after January 1, 2005, and before
                            the month of the enactment of this Act for
                            which a penalty was applied and collected.

    SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX YEAR IN CASE OF GAINS
                  FROM SALE OF PRIMARY RESIDENCE IN COMPUTING PART B
                  INCOME-RELATED PREMIUM.

        (a) In General.--Section 1839(i)(4)(C)(ii)(II) of the Social
    Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) is amended by inserting
    ``sale of primary residence,'' after ``divorce of such individual,''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to premiums and payments for years beginning with 2011.

    SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PATIENT DECISIONS AIDS.

        (a) In General.--The Secretary of Health and Human Services shall
    establish a shared decision making demonstration program (in this
    subsection referred to as the ``program'') under the Medicare program
    using patient decision aids to meet the objective of improving the
    understanding by Medicare beneficiaries of their medical treatment
    options, as compared to comparable Medicare beneficiaries who do not
    participate in a shared decision making process using patient decision
    aids.
        (b) Sites.--
                (1) Enrollment.--The Secretary shall enroll in the program
            not more than 30 eligible providers who have experience in
            implementing, and have invested in the necessary infrastructure
            to implement, shared decision making using patient decision
            aids.
                (2) Application.--An eligible provider seeking to
            participate in the program shall submit to the Secretary an
            application at such time and containing such information as the
            Secretary may require.
                (3) Preference.--In enrolling eligible providers in the
            program, the Secretary shall give preference to eligible
            providers that--
                        (A) have documented experience in using patient
                    decision aids for the conditions identified by the
                    Secretary and in using shared decision making;
                        (B) have the necessary information technology
                    infrastructure to collect the information required by
                    the Secretary for reporting purposes; and
                        (C) are trained in how to use patient decision aids
                    and shared decision making.
        (c) Follow-up Counseling Visit.--
                (1) In general.--An eligible provider participating in the
            program shall routinely schedule Medicare beneficiaries for a
            counseling visit after the viewing of such a patient decision
            aid to answer any questions the beneficiary may have with
            respect to the medical care of the condition involved and to
            assist the beneficiary in thinking through how their
            preferences and concerns relate to their medical care.
                (2) Payment for follow-up counseling visit.--The Secretary
            shall establish procedures for making payments for such
            counseling visits provided to Medicare beneficiaries under the
            program. Such procedures shall provide for the establishment--
                        (A) of a code (or codes) to represent such
                    services; and
                        (B) of a single payment amount for such service
                    that includes the professional time of the health care
                    provider and a portion of the reasonable costs of the
                    infrastructure of the eligible provider such as would
                    be made under the applicable payment systems to that
                    provider for similar covered services.
        (d) Costs of Aids.--An eligible provider participating in the
    program shall be responsible for the costs of selecting, purchasing,
    and incorporating such patient decision aids into the provider's
    practice, and reporting data on quality and outcome measures under the
    program.
        (e) Funding.--The Secretary shall provide for the transfer from the
    Federal Supplementary Medical Insurance Trust Fund established under
    section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds
    as are necessary for the costs of carrying out the program.
        (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.
    and 1395 et seq.) as may be necessary for the purpose of carrying out
    the program.
        (g) Report.--Not later than 12 months after the date of completion
    of the program, the Secretary shall submit to Congress a report on such
    program, together with recommendations for such legislation and
    administrative action as the Secretary determines to be appropriate.
    The final report shall include an evaluation of the impact of the use
    of the program on health quality, utilization of health care services,
    and on improving the quality of life of such beneficiaries.
        (h) Definitions.--In this section:
                (1) Eligible provider.--The term ``eligible provider''
            means the following:
                        (A) A primary care practice.
                        (B) A specialty practice.
                        (C) A multispecialty group practice.
                        (D) A hospital.
                        (E) A rural health clinic.
                        (F) A Federally qualified health center (as defined
                    in section 1861(aa)(4) of the Social Security Act (42
                    U.S.C. 1395x(aa)(4)).
                        (G) An integrated delivery system.
                        (H) A State cooperative entity that includes the
                    State government and at least one other health care
                    provider which is set up for the purpose of testing
                    shared decision making and patient decision aids.
                (2) Patient decision aid.--The term ``patient decision
            aid'' means an educational tool (such as the Internet, a video,
            or a pamphlet) that helps patients (or, if appropriate, the
            family caregiver of the patient) understand and communicate
            their beliefs and preferences related to their treatment
            options, and to decide with their health care provider what
            treatments are best for them based on their treatment options,
            scientific evidence, circumstances, beliefs, and preferences.
                (3) Shared decision making.--The term ``shared decision
            making'' means a collaborative process between patient and
            clinician that engages the patient in decision making, provides
            patients with information about trade-offs among treatment
            options, and facilitates the incorporation of patient
            preferences and values into the medical plan.

        TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
                                COORDINATED CARE

    SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

        Title XVIII of the Social Security Act is amended by inserting
    after section 1866D, as added by section 1152(f) of this division, the
    following new section:

                 ``accountable care organization pilot program

        ``Sec. 1866E.  (a) In General.--The Secretary shall conduct a pilot
    program (in this section referred to as the `pilot program') to test
    different payment incentive models, including (to the extent
    practicable) the specific payment incentive models described in
    subsection (c), designed to reduce the growth of expenditures and
    improve health outcomes in the provision of items and services under
    this title to applicable beneficiaries (as defined in subsection (d))
    by qualifying accountable care organizations (as defined in subsection
    (b)(1)) in order to--
                ``(1) promote accountability for a patient population and
            coordinate items and services under parts A and B;
                ``(2) encourage investment in infrastructure and redesigned
            care processes for high quality and efficient service delivery;
            and
                ``(3) reward physician practices and other physician
            organizational models for the provision of high quality and
            efficient health care services.
        ``(b) Qualifying Accountable Care Organizations (ACOs).--
                ``(1) Qualifying aco defined.--In this section:
                        ``(A) In general.--The terms `qualifying
                    accountable care organization' and `qualifying ACO'
                    mean a group of physicians or other physician
                    organizational model (as defined in subparagraph (D))
                    that--
                                ``(i) is organized at least in part for the
                            purpose of providing physicians' services; and
                                ``(ii) meets such criteria as the Secretary
                            determines to be appropriate to participate in
                            the pilot program, including the criteria
                            specified in paragraph (2).
                        ``(B) Inclusion of other providers.--Nothing in
                    this subsection shall be construed as preventing a
                    qualifying ACO from including a hospital or any other
                    provider of services or supplier furnishing items or
                    services for which payment may be made under this title
                    that is affiliated with the ACO under an arrangement
                    structured so that such provider or supplier
                    participates in the pilot program and shares in any
                    incentive payments under the pilot program.
                        ``(C) Physician.--The term `physician' includes,
                    except as the Secretary may otherwise provide, any
                    individual who furnishes services for which payment may
                    be made as physicians' services.
                        ``(D) Other physician organizational model.--The
                    term `other physician organization model' means, with
                    respect to a qualifying ACO any model of organization
                    under which physicians enter into agreements with other
                    providers for the purposes of participation in the
                    pilot program in order to provide high quality and
                    efficient health care services and share in any
                    incentive payments under such program
                        ``(E) Other services.--Nothing in this paragraph
                    shall be construed as preventing a qualifying ACO from
                    furnishing items or services, for which payment may not
                    be made under this title, for purposes of achieving
                    performance goals under the pilot program.
                ``(2) Qualifying criteria.--The following are criteria
            described in this paragraph for an organized group of
            physicians to be a qualifying ACO:
                        ``(A) The group has a legal structure that would
                    allow the group to receive and distribute incentive
                    payments under this section.
                        ``(B) The group includes a sufficient number of
                    primary care physicians (regardless of specialty) for
                    the applicable beneficiaries for whose care the group
                    is accountable (as determined by the Secretary).
                        ``(C) The group reports on quality measures in such
                    form, manner, and frequency as specified by the
                    Secretary (which may be for the group, for providers of
                    services and suppliers, or both).
                        ``(D) The group reports to the Secretary (in a
                    form, manner and frequency as specified by the
                    Secretary) such data as the Secretary determines
                    appropriate to monitor and evaluate the pilot program.
                        ``(E) The group provides notice to applicable
                    beneficiaries regarding the pilot program (as
                    determined appropriate by the Secretary).
                        ``(F) The group contributes to a best practices
                    network or website, that shall be maintained by the
                    Secretary for the purpose of sharing strategies on
                    quality improvement, care coordination, and efficiency
                    that the groups believe are effective.
                        ``(G) The group utilizes patient-centered processes
                    of care, including those that emphasize patient and
                    caregiver involvement in planning and monitoring of
                    ongoing care management plan.
                        ``(H) The group meets other criteria determined to
                    be appropriate by the Secretary.
        ``(c) Specific Payment Incentive Models.--The specific payment
    incentive models described in this subsection are the following:
                ``(1) Performance target model.--Under the performance
            target model under this paragraph (in this paragraph referred
            to as the `performance target model'):
                        ``(A) In general.--A qualifying ACO qualifies to
                    receive an incentive payment if expenditures for
                    applicable beneficiaries are less than a target
                    spending level or a target rate of growth. The
                    incentive payment shall be made only if savings are
                    greater than would result from normal variation in
                    expenditures for items and services covered under parts
                    A and B.
                        ``(B) Computation of performance target.--
                                ``(i) In general.--The Secretary shall
                            establish a performance target for each
                            qualifying ACO comprised of a base amount
                            (described in clause (ii)) increased to the
                            current year by an adjustment factor (described
                            in clause (iii)). Such a target may be
                            established on a per capita basis, as the
                            Secretary determines to be appropriate.
                                ``(ii) Base amount.--For purposes of clause
                            (i), the base amount in this subparagraph is
                            equal to the average total payments (or allowed
                            charges) under parts A and B (and may include
                            part D, if the Secretary determines
                            appropriate) for applicable beneficiaries for
                            whom the qualifying ACO furnishes items and
                            services in a base period determined by the
                            Secretary. Such base amount may be determined
                            on a per capita basis.
                                ``(iii) Adjustment factor.--For purposes of
                            clause (i), the adjustment factor in this
                            clause may equal an annual per capita amount
                            that reflects changes in expenditures from the
                            period of the base amount to the current year
                            that would represent an appropriate performance
                            target for applicable beneficiaries (as
                            determined by the Secretary). Such adjustment
                            factor may be determined as an amount or rate,
                            may be determined on a national, regional,
                            local, or organization-specific basis, and may
                            be determined on a per capita basis. Such
                            adjustment factor also may be adjusted for risk
                            as determined appropriate by the Secretary.
                                ``(iv) Rebasing.--Under this model the
                            Secretary shall periodically rebase the base
                            expenditure amount described in clause (ii).
                        ``(C) Meeting target.--
                                ``(i) In general.--Subject to clause (ii),
                            a qualifying ACO that meet or exceeds annual
                            quality and performance targets for a year
                            shall receive an incentive payment for such
                            year equal to a portion (as determined
                            appropriate by the Secretary) of the amount by
                            which payments under this title for such year
                            relative are estimated to be below the
                            performance target for such year, as determined
                            by the Secretary. The Secretary may establish a
                            cap on incentive payments for a year for a
                            qualifying ACO.
                                ``(ii) Limitation.-- The Secretary shall
                            limit incentive payments to each qualifying ACO
                            under this paragraph as necessary to ensure
                            that the aggregate expenditures with respect to
                            applicable beneficiaries for such ACOs under
                            this title (inclusive of incentive payments
                            described in this subparagraph) do not exceed
                            the amount that the Secretary estimates would
                            be expended for such ACO for such beneficiaries
                            if the pilot program under this section were
                            not implemented.
                        ``(D) Reporting and other requirements.--In
                    carrying out such model, the Secretary may (as the
                    Secretary determines to be appropriate) incorporate
                    reporting requirements, incentive payments, and
                    penalties related to the physician quality reporting
                    initiative (PQRI), electronic prescribing, electronic
                    health records, and other similar initiatives under
                    section 1848, and may use alternative criteria than
                    would otherwise apply under such section for
                    determining whether to make such payments. The
                    incentive payments described in this subparagraph shall
                    not be included in the limit described in subparagraph
                    (C)(ii) or in the performance target model described in
                    this paragraph.
                ``(2) Partial capitation model.--
                        ``(A) In general.--Subject to subparagraph (B), a
                    partial capitation model described in this paragraph
                    (in this paragraph referred to as a `partial capitation
                    model') is a model in which a qualifying ACO would be
                    at financial risk for some, but not all, of the items
                    and services covered under parts A and B, such as at
                    risk for some or all physicians' services or all items
                    and services under part B. The Secretary may limit a
                    partial capitation model to ACOs that are highly
                    integrated systems of care and to ACOs capable of
                    bearing risk, as determined to be appropriate by the
                    Secretary.
                        ``(B) No additional program expenditures.--Payments
                    to a qualifying ACO for applicable beneficiaries for a
                    year under the partial capitation model shall be
                    established in a manner that does not result in
                    spending more for such ACO for such beneficiaries than
                    would otherwise be expended for such ACO for such
                    beneficiaries for such year if the pilot program were
                    not implemented, as estimated by the Secretary.
                ``(3) Other payment models.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may develop other payment models that meet
                    the goals of this pilot program to improve quality and
                    efficiency.
                        ``(B) No additional program expenditures.--
                    Subparagraph (B) of paragraph (2) shall apply to a
                    payment model under subparagraph (A) in a similar
                    manner as such subparagraph (B) applies to the payment
                    model under paragraph (2).
        ``(d) Applicable Beneficiaries.--
                ``(1) In general.--In this section, the term `applicable
            beneficiary' means, with respect to a qualifying ACO, an
            individual who--
                        ``(A) is enrolled under part B and entitled to
                    benefits under part A;
                        ``(B) is not enrolled in a Medicare Advantage plan
                    under part C or a PACE program under section 1894; and
                        ``(C) meets such other criteria as the Secretary
                    determines appropriate, which may include criteria
                    relating to frequency of contact with physicians in the
                    ACO
                ``(2) Following applicable beneficiaries.--The Secretary
            may monitor data on expenditures and quality of services under
            this title after an applicable beneficiary discontinues
            receiving services under this title through a qualifying ACO.
        ``(e) Implementation.--
                ``(1) Starting date.--The pilot program shall begin no
            later than January 1, 2012. An agreement with a qualifying ACO
            under the pilot program may cover a multi-year period of
            between 3 and 5 years.
                ``(2) Waiver.--The Secretary may waive such provisions of
            this title (including section 1877) and title XI in the manner
            the Secretary determines necessary in order implement the pilot
            program.
                ``(3) Performance results reports.--The Secretary shall
            report performance results to qualifying ACOs under the pilot
            program at least annually.
                ``(4) Limitations on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise of--
                        ``(A) the elements, parameters, scope, and duration
                    of the pilot program;
                        ``(B) the selection of qualifying ACOs for the
                    pilot program;
                        ``(C) the establishment of targets, measurement of
                    performance, determinations with respect to whether
                    savings have been achieved and the amount of savings;
                        ``(D) determinations regarding whether, to whom,
                    and in what amounts incentive payments are paid; and
                        ``(E) decisions about the extension of the program
                    under subsection (g), expansion of the program under
                    subsection (h) or extensions under subsection (i).
                ``(5) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
        ``(f) Evaluation; Monitoring.--
                ``(1) In general.--The Secretary shall evaluate the payment
            incentive model for each qualifying ACO under the pilot program
            to assess impacts on beneficiaries, providers of services,
            suppliers and the program under this title. The Secretary shall
            make such evaluation publicly available within 60 days of the
            date of completion of such report.
                ``(2) Monitoring.--The Inspector General of the Department
            of Health and Human Services shall provide for monitoring of
            the operation of ACOs under the pilot program with regard to
            violations of section 1877 (popularly known as the `Stark
            law').
        ``(g) Extension of Pilot Agreement With Successful Organizations.--
                ``(1) Reports to congress.--Not later than 2 years after
            the date the first agreement is entered into under this
            section, and biennially thereafter for six years, the Secretary
            shall submit to Congress and make publicly available a report
            on the use of authorities under the pilot program. Each report
            shall address the impact of the use of those authorities on
            expenditures, access, and quality under this title.
                ``(2) Extension.--Subject to the report provided under
            paragraph (1), with respect to a qualifying ACO, the Secretary
            may extend the duration of the agreement for such ACO under the
            pilot program as the Secretary determines appropriate if--
                        ``(A) the ACO receives incentive payments with
                    respect to any of the first 4 years of the pilot
                    agreement and is consistently meeting quality standards
                    or
                        ``(B) the ACO is consistently exceeding quality
                    standards and is not increasing spending under the
                    program.
                ``(3) Termination.--The Secretary may terminate an
            agreement with a qualifying ACO under the pilot program if such
            ACO did not receive incentive payments or consistently failed
            to meet quality standards in any of the first 3 years under the
            program.
        ``(h) Expansion to Additional ACOs.--
                ``(1) Testing and refinement of payment incentive models.--
            Subject to the evaluation described in subsection (f), the
            Secretary may enter into agreements under the pilot program
            with additional qualifying ACOs to further test and refine
            payment incentive models with respect to qualifying ACOs.
                ``(2) Expanding use of successful models to program
            implementation.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may issue regulations to implement, on a
                    permanent basis, 1 or more models if, and to the extent
                    that, such models are beneficial to the program under
                    this title, as determined by the Secretary.
                        ``(B) Certification.--The Chief Actuary of the
                    Centers for Medicare & Medicaid Services shall certify
                    that 1 or more of such models described in subparagraph
                    (A) would result in estimated spending that would be
                    less than what spending would otherwise be estimated to
                    be in the absence of such expansion.
        ``(i) Treatment of Physician Group Practice Demonstration.--
                ``(1) Extension.--The Secretary may enter in to an
            agreement with a qualifying ACO under the demonstration under
            section 1866A, subject to rebasing and other modifications
            deemed appropriate by the Secretary, until the pilot program
            under this section is operational.
                ``(2) Transition.--For purposes of extension of an
            agreement with a qualifying ACO under subsection (g)(2), the
            Secretary shall treat receipt of an incentive payment for a
            year by an organization under the physician group practice
            demonstration pursuant to section 1866A as a year for which an
            incentive payment is made under such subsection, as long as
            such practice group practice organization meets the criteria
            under subsection (b)(2).
        ``(j) Additional Provisions.--
                ``(1) Authority for separate incentive arrangements.--The
            Secretary may create separate incentive arrangements (including
            using multiple years of data, varying thresholds, varying
            shared savings amounts, and varying shared savings limits) for
            different categories of qualifying ACOs to reflect natural
            variations in data availability, variation in average annual
            attributable expenditures, program integrity, and other matters
            the Secretary deems appropriate.
                ``(2) Encouragement of participation of smaller
            organizations.--In order to encourage the participation of
            smaller accountable care organizations under the pilot program,
            the Secretary may limit a qualifying ACO's exposure to high
            cost patients under the program.
                ``(3) Involvement in private payer arrangements.--Nothing
            in this section shall be construed as preventing qualifying
            ACOs participating in the pilot program from negotiating
            similar contracts with private payers.
                ``(4) Antidiscrimination limitation.--The Secretary shall
            not enter into an agreement with an entity to provide health
            care items or services under the pilot program, or with an
            entity to administer the program, unless such entity guarantees
            that it will not deny, limit, or condition the coverage or
            provision of benefits under the program, for individuals
            eligible to be enrolled under such program, based on any health
            status-related factor described in section 2702(a)(1) of the
            Public Health Service Act.
                ``(5) Construction.--Nothing in this section shall be
            construed to compel or require an organization to use an
            organization-specific target growth rate for an accountable
            care organization under this section for purposes of section
            1848.
                ``(6) Funding.--For purposes of administering and carrying
            out the pilot program, other than for payments for items and
            services furnished under this title and incentive payments
            under subsection (c)(1), in addition to funds otherwise
            appropriated, there are appropriated to the Secretary for the
            Center for Medicare & Medicaid Services Program Management
            Account $25,000,000 for each of fiscal years 2010 through 2014
            and $20,000,000 for fiscal year 2015. Amounts appropriated
            under this paragraph for a fiscal year shall be available until
            expended.''.

    SEC. 1302. MEDICAL HOME PILOT PROGRAM.

        (a) In General.--Title XVIII of the Social Security Act is amended
    by inserting after section 1866E, as inserted by section 1301, the
    following new section:

                          ``medical home pilot program

        ``Sec. 1866F.  (a) Establishment and Medical Home Models.--
                ``(1) Establishment of pilot program.--The Secretary shall
            establish a medical home pilot program (in this section
            referred to as the `pilot program') for the purpose of
            evaluating the feasibility and advisability of reimbursing
            qualified patient-centered medical homes for furnishing medical
            home services (as defined under subsection (b)(1)) to high need
            beneficiaries (as defined in subsection (d)(1)(C)) and to
            targeted high need beneficiaries (as defined in subsection
            (c)(1)(C)).
                ``(2) Scope.--Subject to subsection (g), the pilot program
            shall include urban, rural, and underserved areas.
                ``(3) Models of medical homes in the pilot program.--The
            pilot program shall evaluate each of the following medical home
            models:
                        ``(A) Independent patient-centered medical home
                    model.--Independent patient-centered medical home model
                    under subsection (c).
                        ``(B) Community-based medical home model.--
                    Community-based medical home model under subsection
                    (d).
                ``(4) Participation of nurse practitioners and physician
            assistants.--
                        ``(A) Nothing in this section shall be construed as
                    preventing a nurse practitioner from leading a patient
                    centered medical home so long as--
                                ``(i) all the requirements of this section
                            are met; and
                                ``(ii) the nurse practitioner is acting
                            consistently with State law.
                        ``(B) Nothing in this section shall be construed as
                    preventing a physician assistant from participating in
                    a patient centered medical home so long as--
                                ``(i) all the requirements of this section
                            are met; and
                                ``(ii) the physician assistant is acting
                            consistently with State law.
        ``(b) Definitions.--For purposes of this section:
                ``(1) Patient-centered medical home services.--The term
            `patient-centered medical home services' means services that--
                        ``(A) provide beneficiaries with direct and ongoing
                    access to a primary care or principal care by a
                    physician or nurse practitioner who accepts
                    responsibility for providing first contact, continuous
                    and comprehensive care to such beneficiary;
                        ``(B) coordinate the care provided to a beneficiary
                    by a team of individuals at the practice level across
                    office, institutional and home settings led by a
                    primary care or principal care physician or nurse
                    practitioner, as needed and appropriate;
                        ``(C) provide for all the patient's health care
                    needs or take responsibility for appropriately
                    arranging care with other qualified providers for all
                    stages of life;
                        ``(D) provide continuous access to care and
                    communication with participating beneficiaries;
                        ``(E) provide support for patient self-management,
                    proactive and regular patient monitoring, support for
                    family caregivers, use patient-centered processes, and
                    coordination with community resources;
                        ``(F) integrate readily accessible, clinically
                    useful information on participating patients that
                    enables the practice to treat such patients
                    comprehensively and systematically; and
                        ``(G) implement evidence-based guidelines and apply
                    such guidelines to the identified needs of
                    beneficiaries over time and with the intensity needed
                    by such beneficiaries.
                ``(2) Primary care.--The term `primary care' means health
            care that is provided by a physician, nurse practitioner, or
            physician assistant who practices in the field of family
            medicine, general internal medicine, geriatric medicine, or
            pediatric medicine.
                ``(3) Principal care.--The term `principal care' means
            integrated, accessible health care that is provided by a
            physician who is a medical subspecialist that addresses the
            majority of the personal health care needs of patients with
            chronic conditions requiring the subspecialist's expertise, and
            for whom the subspecialist assumes care management.
        ``(c) Independent Patient-centered Medical Home Model.--
                ``(1) In general.--
                        ``(A) Payment authority.--Under the independent
                    patient-centered medical home model under this
                    subsection, the Secretary shall make payments for
                    medical home services furnished by an independent
                    patient-centered medical home (as defined in
                    subparagraph (B)) pursuant to paragraph (3)(B) for a
                    targeted high need beneficiaries (as defined in
                    subparagraph (C)).
                        ``(B) Independent patient-centered medical home
                    defined.--In this section, the term `independent
                    patient-centered medical home' means a physician-
                    directed or nurse-practitioner-directed practice that
                    is qualified under paragraph (2) as--
                                ``(i) providing beneficiaries with patient-
                            centered medical home services; and
                                ``(ii) meets such other requirements as the
                            Secretary may specify.
                        ``(C) Targeted high need beneficiary defined.--For
                    purposes of this subsection, the term `targeted high
                    need beneficiary' means a high need beneficiary who,
                    based on a risk score as specified by the Secretary, is
                    generally within the upper 50th percentile of Medicare
                    beneficiaries.
                        ``(D) Beneficiary election to participate.--The
                    Secretary shall determine an appropriate method of
                    ensuring that beneficiaries have agreed to participate
                    in the pilot program.
                        ``(E) Implementation.--The pilot program under this
                    subsection shall begin no later than 6 months after the
                    date of the enactment of this section.
                ``(2) standard setting and qualification process for
            patient-centered medical homes.--The Secretary shall review
            alternative models for standard setting and qualification, and
            shall establish a process--
                        ``(A) to establish standards to enable medical
                    practices to qualify as patient-centered medical homes;
                    and
                        ``(B) to initially provide for the review and
                    certification of medical practices as meeting such
                    standards.
                ``(3)  Payment.--
                        ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished by independent patient-
                    centered medical homes. Under such methodology, the
                    Secretary shall adjust payments to medical homes based
                    on beneficiary risk scores to ensure that higher
                    payments are made for higher risk beneficiaries.
                        ``(B) Per beneficiary per month payments.--Under
                    such payment methodology, the Secretary shall pay
                    independent patient-centered medical homes a monthly
                    fee for each targeted high need beneficiary who
                    consents to receive medical home services through such
                    medical home.
                        ``(C) Prospective payment.--The fee under
                    subparagraph (B) shall be paid on a prospective basis.
                        ``(D) Amount of payment.--In determining the amount
                    of such fee, the Secretary shall consider the
                    following:
                                ``(i) The clinical work and practice
                            expenses involved in providing the medical home
                            services provided by the independent patient-
                            centered medical home (such as providing
                            increased access, care coordination, population
                            disease management, and teaching self-care
                            skills for managing chronic illnesses) for
                            which payment is not made under this title as
                            of the date of the enactment of this section.
                                ``(ii) Allow for differential payments
                            based on capabilities of the independent
                            patient-centered medical home.
                                ``(iii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph in a
                            manner that ensures that higher payments are
                            made for higher risk beneficiaries.
                ``(4) Encouraging participation of variety of practices.--
            The pilot program under this subsection shall be designed to
            include the participation of physicians in practices with fewer
            than 10 full-time equivalent physicians, as well as physicians
            in larger practices, particularly in underserved and rural
            areas, as well as federally qualified community health centers,
            and rural health centers.
                ``(5) No duplication in pilot participation.--A physician
            in a group practice that participates in the accountable care
            organization pilot program under section 1866D shall not be
            eligible to participate in the pilot program under this
            subsection, unless the pilot program under this section has
            been implemented on a permanent basis under subsection (e)(3).
        ``(d) Community-based Medical Home Model.--
                ``(1) In general.--
                        ``(A) Authority for payments.--Under the community-
                    based medical home model under this subsection (in this
                    section referred to as the `CBMH model'), the Secretary
                    shall make payments for the furnishing of medical home
                    services by a community-based medical home (as defined
                    in subparagraph (B)) pursuant to paragraph (5)(B) for
                    high need beneficiaries.
                        ``(B) Community-based medical home defined.--In
                    this section, the term `community-based medical home'
                    means a nonprofit community-based or State-based
                    organization that is certified under paragraph (2) as
                    meeting the following requirements:
                                ``(i) The organization provides
                            beneficiaries with medical home services.
                                ``(ii) The organization provides medical
                            home services under the supervision of and in
                            close collaboration with the primary care or
                            principal care physician, nurse practitioner,
                            or physician assistant designated by the
                            beneficiary as his or her community-based
                            medical home provider.
                                ``(iii) The organization employs community
                            health workers, including nurses or other non-
                            physician practitioners, lay health workers, or
                            other persons as determined appropriate by the
                            Secretary, that assist the primary or principal
                            care physician, nurse practitioner, or
                            physician assistant in chronic care management
                            activities such as teaching self-care skills
                            for managing chronic illnesses, transitional
                            care services, care plan setting, medication
                            therapy management services for patients with
                            multiple chronic diseases, or help
                            beneficiaries access the health care and
                            community-based resources in their local
                            geographic area.
                                ``(iv) The organization meets such other
                            requirements as the Secretary may specify.
                        ``(C) High need beneficiary.--In this section, the
                    term `high need beneficiary' means an individual who
                    requires regular medical monitoring, advising, or
                    treatment.
                ``(2) Qualification process for community-based medical
            homes.--The Secretary shall establish a process--
                        ``(A) for the initial qualification of community-
                    based or State-based organizations as community-based
                    medical homes; and
                        ``(B) to provide for the review and qualification
                    of such community-based and State-based organizations
                    pursuant to criteria established by the Secretary.
                ``(3) Duration.--The pilot program for community-based
            medical homes under this subsection shall start no later than 2
            years after the date of the enactment of this section. Each
            demonstration site under the pilot program shall operate for a
            period of up to 5 years after the initial implementation phase,
            without regard to the receipt of a initial implementation
            funding under subsection (i).
                ``(4) Preference.--In selecting sites for the CBMH model,
            the Secretary may give preference to--
                        ``(A) applications from geographic areas that
                    propose to coordinate health care services for
                    chronically ill beneficiaries across a variety of
                    health care settings, such as primary care physician
                    practices with fewer than 10 physicians, specialty
                    physicians, nurse practitioner practices, Federally
                    qualified health centers, rural health clinics, and
                    other settings;
                        ``(B) applications that include other payors that
                    furnish medical home services for chronically ill
                    patients covered by such payors; and
                        ``(C) applications from States that propose to use
                    the medical home model to coordinate health care
                    services for individuals enrolled under this title,
                    individuals enrolled under title XIX, and full-benefit
                    dual eligible individuals (as defined in section
                    1935(c)(6)) with chronic diseases across a variety of
                    health care settings.
                ``(5)  Payments.--
                        ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished under the CBMH model.
                        ``(B) Per beneficiary per month payments.--Under
                    such payment methodology, the Secretary shall make two
                    separate monthly payments for each high need
                    beneficiary who consents to receive medical home
                    services through such medical home, as follows:
                                ``(i) Payment to community-based
                            organization.--One monthly payment to a
                            community-based or State-based organization.
                                ``(ii) Payment to primary or principal care
                            practice.--One monthly payment to the primary
                            or principal care practice for such
                            beneficiary.
                        ``(C) Prospective payment.--The payments under
                    subparagraph (B) shall be paid on a prospective basis.
                        ``(D) Amount of payment.--In determining the amount
                    of such payment, the Secretary shall consider the
                    following:
                                ``(i) The clinical work and practice
                            expenses involved in providing the medical home
                            services provided by the community-based
                            medical home (such as providing increased
                            access, care coordination, care plan setting,
                            population disease management, and teaching
                            self-care skills for managing chronic
                            illnesses) for which payment is not made under
                            this title as of the date of the enactment of
                            this section.
                                ``(ii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph.
                ``(6) Initial implementation funding.--The Secretary may
            make available initial implementation funding to a community
            based or State-based organization or a State that is
            participating in the pilot program under this subsection. Such
            organization shall provide the Secretary with a detailed
            implementation plan that includes how such funds will be used.
        ``(e) Expansion of Program.--
                ``(1) Evaluation of cost and quality.--The Secretary shall
            evaluate the pilot program to determine--
                        ``(A) the extent to which medical homes result in--
                                ``(i) improvement in the quality and
                            coordination of health care services,
                            particularly with regard to the care of complex
                            patients;
                                ``(ii) improvement in reducing health
                            disparities;
                                ``(iii) reductions in preventable
                            hospitalizations;
                                ``(iv) prevention of readmissions;
                                ``(v) reductions in emergency room visits;
                                ``(vi) improvement in health outcomes,
                            including patient functional status where
                            applicable;
                                ``(vii) improvement in patient
                            satisfaction;
                                ``(viii) improved efficiency of care such
                            as reducing duplicative diagnostic tests and
                            laboratory tests; and
                                ``(ix) reductions in health care
                            expenditures; and
                        ``(B) the feasability and advisability of
                    reimbursing medical homes for medical home services
                    under this title on a permanent basis.
                ``(2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under paragraph (1).
                ``(3) Expansion of program.--
                        ``(A) In general.--Subject to the results of the
                    evaluation under paragraph (1) and subparagraph (B),
                    the Secretary may issue regulations to implement, on a
                    permanent basis, one or more models, if, and to the
                    extent that such model or models, are beneficial to the
                    program under this title, including that such
                    implementation will improve quality of care, as
                    determined by the Secretary.
                        ``(B) Certification requirement.--The Secretary may
                    not issue such regulations unless the Chief Actuary of
                    the Centers for Medicare & Medicaid Services certifies
                    that the expansion of the components of the pilot
                    program described in subparagraph (A) would result in
                    estimated spending under this title that would be no
                    more than the level of spending that the Secretary
                    estimates would otherwise be spent under this title in
                    the absence of such expansion.
        ``(f) Administrative Provisions.--
                ``(1) No duplication in payments.--During any month, the
            Secretary may not make payments under this section under more
            than one model or through more than one medical home under any
            model for the furnishing of medical home services to an
            individual.
                ``(2) No effect on payment for evaluation and management
            services.--Payments made under this section are in addition to,
            and have no effect on the amount of, payment for evaluation and
            management services made under this title
                ``(3) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
        ``(g) Funding.--
                ``(1) Operational costs.--For purposes of administering and
            carrying out the pilot program (including the design,
            implementation, technical assistance for and evaluation of such
            program), in addition to funds otherwise available, there shall
            be transferred from the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 to the Secretary for the Centers
            for Medicare & Medicaid Services Program Management Account
            $6,000,000 for each of fiscal years 2010 through 2014. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                ``(2) Patient-centered medical home services.--In addition
            to funds otherwise available, there shall be available to the
            Secretary for the Centers for Medicare & Medicaid Services,
            from the Federal Supplementary Medical Insurance Trust Fund
            under section 1841--
                        ``(A) $200,000,000 for each of fiscal years 2010
                    through 2014 for payments for medical home services
                    under subsection (c)(3); and
                        ``(B) $125,000,000 for each of fiscal years 2012
                    through 2016, for payments under subsection (d)(5).
            Amounts available under this paragraph for a fiscal year shall
            be available until expended.
                ``(3) Initial implementation.--In addition to funds
            otherwise available, there shall be available to the Secretary
            for the Centers for Medicare & Medicaid Services, from the
            Federal Supplementary Medical Insurance Trust Fund under
            section 1841, $2,500,000 for each of fiscal years 2010 through
            2012, under subsection (d)(6). Amounts available under this
            paragraph for a fiscal year shall be available until expended.
        ``(h) Treatment of TRHCA Medicare Medical Home Demonstration
    Funding.--
                ``(1) In addition to funds otherwise available for payment
            of medical home services under subsection (c)(3), there shall
            also be available the amount provided in subsection (g) of
            section 204 of division B of the Tax Relief and Health Care Act
            of 2006 (42 U.S.C. 1395b-1 note).
                ``(2) Notwithstanding section 1302(c) of the America's
            Affordable Health Choices Act of 2009, in addition to funds
            provided in paragraph (1) and subsection (g)(2)(A), the funding
            for medical home services that would otherwise have been
            available if such section 204 medical home demonstration had
            been implemented (without regard to subsection (g) of such
            section) shall be available to the independent patient-centered
            medical home model described in subsection (c).''.
        (b) Effective Date.--The amendment made by this section shall apply
    to services furnished on or after the date of the enactment of this
    Act.
        (c) Conforming Repeal.--Section 204 of division B of the Tax Relief
    and Health Care Act of 2006 (42 U.S.C. 1395b-1 note), as amended by
    section 133(a)(2) of the Medicare Improvements for Patients and
    Providers Act of 2008 (Public Law 110-275), is repealed.

    SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY CARE SERVICES.

        (a) In General.--Section 1833 of the Social Security Act is amended
    by inserting after subsection (o) the following new subsection:
        ``(p) Primary Care Payment Incentives.--
                ``(1) In general.--In the case of primary care services (as
            defined in paragraph (2)) furnished on or after January 1,
            2011, by a primary care practitioner (as defined in paragraph
            (3)) for which amounts are payable under section 1848, in
            addition to the amount otherwise paid under this part there
            shall also be paid to the practitioner (or to an employer or
            facility in the cases described in clause (A) of section
            1842(b)(6)) (on a monthly or quarterly basis) from the Federal
            Supplementary Medical Insurance Trust Fund an amount equal 5
            percent (or 10 percent if the practitioner predominately
            furnishes such services in an area that is designated (under
            section 332(a)(1)(A) of the Public Health Service Act) as a
            primary care health professional shortage area.
                ``(2) Primary care services defined.--In this subsection,
            the term `primary care services'--
                        ``(A) means services which are evaluation and
                    management services as defined in section
                    1848(j)(5)(A); and
                        ``(B) includes services furnished by another health
                    care professional that would be described in
                    subparagraph (A) if furnished by a physician.
                ``(3) Primary care practitioner defined.--In this
            subsection, the term `primary care practitioner'--
                        ``(A) means a physician or other health care
                    practitioner (including a nurse practitioner) who--
                                ``(i) specializes in family medicine,
                            general internal medicine, general pediatrics,
                            geriatrics, or obstetrics and gynecology; and
                                ``(ii) has allowed charges for primary care
                            services that account for at least 50 percent
                            of the physician's or practitioner's total
                            allowed charges under section 1848, as
                            determined by the Secretary for the most recent
                            period for which data are available; and
                        ``(B) includes a physician assistant who is under
                    the supervision of a physician described in
                    subparagraph (A).
                ``(4) Limitation on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise, respecting--
                        ``(A) any determination or designation under this
                    subsection;
                        ``(B) the identification of services as primary
                    care services under this subsection; and
                        ``(C) the identification of a practitioner as a
                    primary care practitioner under this subsection.
                ``(5) Coordination with other payments.--
                        ``(A) With other primary care incentives.--The
                    provisions of this subsection shall not be taken into
                    account in applying subsections (m) and (u) and any
                    payment under such subsections shall not be taken into
                    account in computing payments under this subsection.
                        ``(B) With quality incentives.--Payments under this
                    subsection shall not be taken into account in
                    determining the amounts that would otherwise be paid
                    under this part for purposes of section
                    1834(g)(2)(B).''.
        (b) Conforming Amendments.--
                (1) Section 1833(m) of such Act (42 U.S.C. 1395l(m)) is
            amended by redesignating paragraph (4) as paragraph (5) and by
            inserting after paragraph (3) the following new paragraph:
        ``(4) The provisions of this subsection shall not be taken into
    account in applying subsections (m) or (u) and any payment under such
    subsections shall not be taken into account in computing payments under
    this subsection.''.
                (2) Section 1848(m)(5)(B) of such Act (42 U.S.C. 1395w-
            4(m)(5)(B)) is amended by inserting ``, (p),'' after ``(m)''.
                (3) Section 1848(o)(1)(B)(iv) of such Act (42 U.S.C. 1395w-
            4(o)(1)(B)(iv)) is amended by inserting ``primary care'' before
            ``health professional shortage area''.

    SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CERTIFIED NURSE-MIDWIVES.

        (a) In General.--Section 1833(a)(1)(K) of the Social Security Act
    (42 U.S.C.1395l(a)(1)(K)) is amended by striking ``(but in no event''
    and all that follows through ``performed by a physician)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 2011.

    SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR PREVENTIVE SERVICES.

        (a) Medicare Covered Preventive Services Defined.--Section 1861 of
    the Social Security Act (42 U.S.C. 1395x), as amended by section
    1233(a)(1)(B), is amended by adding at the end the following new
    subsection:

                     ``Medicare Covered Preventive Services

        ``(iii)(1) Subject to the succeeding provisions of this subsection,
    the term `Medicare covered preventive services' means the following:
                ``(A) Prostate cancer screening tests (as defined in
            subsection (oo)).
                ``(B) Colorectal cancer screening tests (as defined in
            subsection (pp).
                ``(C) Diabetes outpatient self-management training services
            (as defined in subsection (qq)).
                ``(D) Screening for glaucoma for certain individuals (as
            described in subsection (s)(2)(U)).
                ``(E) Medical nutrition therapy services for certain
            individuals (as described in subsection (s)(2)(V)).
                ``(F) An initial preventive physical examination (as
            defined in subsection (ww)).
                ``(G) Cardiovascular screening blood tests (as defined in
            subsection (xx)(1)).
                ``(H) Diabetes screening tests (as defined in subsection
            (yy)).
                ``(I) Ultrasound screening for abdominal aortic aneurysm
            for certain individuals (as described in subsection
            (s)(2)(AA)).
                ``(J) Pneumococcal and influenza vaccines and their
            administration (as described in subsection (s)(10)(A)) and
            hepatitis B vaccine and its administration for certain
            individuals (as described in subsection (s)(10)(B)).
                ``(K) Screening mammography (as defined in subsection
            (jj)).
                ``(L) Screening pap smear and screening pelvic exam (as
            defined in subsection (nn)).
                ``(M) Bone mass measurement (as defined in subsection
            (rr)).
                ``(N) Kidney disease education services (as defined in
            subsection (ggg)).
                ``(O) Additional preventive services (as defined in
            subsection (ddd)).
        ``(2) With respect to specific Medicare covered preventive
    services, the limitations and conditions described in the provisions
    referenced in paragraph (1) with respect to such services shall
    apply.''.
        (b) Payment and Elimination of Cost-sharing.--
                (1) In general.--
                        (A) In general.--Section 1833(a) of the Social
                    Security Act (42 U.S.C. 1395l(a)) is amended by adding
                    after and below paragraph (9) the following:
    ``With respect to Medicare covered preventive services, in any case in
    which the payment rate otherwise provided under this part is computed
    as a percent of less than 100 percent of an actual charge, fee schedule
    rate, or other rate, such percentage shall be increased to 100
    percent.''.
                        (B) Application to sigmoidoscopies and
                    colonoscopies.--Section 1834(d) of such Act (42 U.S.C.
                    1395m(d)) is amended--
                                (i) in paragraph (2)(C), by amending clause
                            (ii) to read as follows:
                                ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''; and
                                (ii) in paragraph (3)(C), by amending
                            clause (ii) to read as follows:
                                ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''.
                (2) Elimination of coinsurance in outpatient hospital
            settings.--
                        (A) Exclusion from opd fee schedule.--Section
                    1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.
                    1395l(t)(1)(B)(iv)) is amended by striking ``screening
                    mammography (as defined in section 1861(jj)) and
                    diagnostic mammography'' and inserting ``diagnostic
                    mammograms and Medicare covered preventive services (as
                    defined in section 1861(iii)(1))''.
                        (B) Conforming amendments.--Section 1833(a)(2) of
                    the Social Security Act (42 U.S.C. 1395l(a)(2)) is
                    amended--
                                (i) in subparagraph (F), by striking
                            ``and'' after the semicolon at the end;
                                (ii) in subparagraph (G), by adding ``and''
                            at the end; and
                                (iii) by adding at the end the following
                            new subparagraph:
                        ``(H) with respect to additional preventive
                    services (as defined in section 1861(ddd)) furnished by
                    an outpatient department of a hospital, the amount
                    determined under paragraph (1)(W);''.
                (3) Waiver of application of deductible for all preventive
            services.--The first sentence of section 1833(b) of the Social
            Security Act (42 U.S.C. 1395l(b)) is amended--
                        (A) in clause (1), by striking ``items and services
                    described in section 1861(s)(10)(A)'' and inserting
                    ``Medicare covered preventive services (as defined in
                    section 1861(iii))'';
                        (B) by inserting ``and'' before ``(4)''; and
                        (C) by striking clauses (5) through (8).
                (4) Application to providers of services.--Section
            1866(a)(2)(A)(ii) of such Act (42 U.S.C. 1395cc(a)(2)(A)(ii))
            is amended by inserting ``other than for Medicare covered
            preventive services and'' after ``for such items and services
            (''.
        (c) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2011.

    SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL CANCER SCREENING TESTS
                  REGARDLESS OF CODING, SUBSEQUENT DIAGNOSIS, OR ANCILLARY
                  TISSUE REMOVAL.

        (a) In General.--Section 1833 of the Social Security Act (42 U.S.C.
    1395l(b)), as amended by section 1305(b), is further amended--
                (1) in subsection (a), in the sentence added by section
            1305(b)(1)(A), by inserting ``(including services described in
            the last sentence of section 1833(b))'' after ``preventive
            services''; and
                (2) in subsection (b), by adding at the end the following
            new sentence: ``Clause (1) of the first sentence of this
            subsection shall apply with respect to a colorectal cancer
            screening test regardless of the code that is billed for the
            establishment of a diagnosis as a result of the test, or for
            the removal of tissue or other matter or other procedure that
            is furnished in connection with, as a result of, and in the
            same clinical encounter as, the screening test.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items and services furnished on or after January 1, 2011.

    SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERVICES FROM COVERAGE
                  UNDER THE MEDICARE SKILLED NURSING FACILITY PROSPECTIVE
                  PAYMENT SYSTEM AND CONSOLIDATED PAYMENT.

        (a) In General.--Section 1888(e)(2)(A)(ii) of the Social Security
    Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``clinical
    social worker services,'' after ``qualified psychologist services,''.
        (b) Conforming Amendment.--Section 1861(hh)(2) of the Social
    Security Act (42 U.S.C. 1395x(hh)(2)) is amended by striking ``and
    other than services furnished to an inpatient of a skilled nursing
    facility which the facility is required to provide as a requirement for
    participation''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after July 1, 2010.

    SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND
                  MENTAL HEALTH COUNSELOR SERVICES.

        (a) Coverage of Marriage and Family Therapist Services.--
                (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as amended by section
            1235, is amended--
                        (A) in subparagraph (EE), by striking ``and'' at
                    the end;
                        (B) in subparagraph (FF), by adding ``and'' at the
                    end; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(GG) marriage and family therapist services (as
                    defined in subsection (jjj));''.
                (2) Definition.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x), as amended by sections 1233 and 1305, is
            amended by adding at the end the following new subsection:

                    ``Marriage and Family Therapist Services

        ``(jjj)(1) The term `marriage and family therapist services' means
    services performed by a marriage and family therapist (as defined in
    paragraph (2)) for the diagnosis and treatment of mental illnesses,
    which the marriage and family therapist is legally authorized to
    perform under State law (or the State regulatory mechanism provided by
    State law) of the State in which such services are performed, as would
    otherwise be covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or other
    provider charges or is paid any amounts with respect to the furnishing
    of such services.
        ``(2) The term `marriage and family therapist' means an individual
    who--
                ``(A) possesses a master's or doctoral degree which
            qualifies for licensure or certification as a marriage and
            family therapist pursuant to State law;
                ``(B) after obtaining such degree has performed at least 2
            years of clinical supervised experience in marriage and family
            therapy; and
                ``(C) is licensed or certified as a marriage and family
            therapist in the State in which marriage and family therapist
            services are performed.''.
                (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)) is amended by adding at the end the following
            new clause:
                                ``(v) marriage and family therapist
                            services;''.
                (4) Amount of payment.--
                        (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                                (i) by striking ``and'' before ``(W)''; and
                                (ii) by inserting before the semicolon at
                            the end the following: ``, and (X) with respect
                            to marriage and family therapist services under
                            section 1861(s)(2)(GG), the amounts paid shall
                            be 80 percent of the lesser of the actual
                            charge for the services or 75 percent of the
                            amount determined for payment of a psychologist
                            under clause (L)''.
                        (B) Development of criteria with respect to
                    consultation with a health care professional.--The
                    Secretary of Health and Human Services shall, taking
                    into consideration concerns for patient
                    confidentiality, develop criteria with respect to
                    payment for marriage and family therapist services for
                    which payment may be made directly to the marriage and
                    family therapist under part B of title XVIII of the
                    Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a therapist must agree to consult with a
                    patient's attending or primary care physician or nurse
                    practitioner in accordance with such criteria.
                (5) Exclusion of marriage and family therapist services
            from skilled nursing facility prospective payment system.--
            Section 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1307(a), is amended
            by inserting ``marriage and family therapist services (as
            defined in subsection (jjj)(1)),'' after ``clinical social
            worker services,''.
                (6) Coverage of marriage and family therapist services
            provided in rural health clinics and federally qualified health
            centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
            U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a
            clinical social worker (as defined in subsection (hh)(1)),''
            and inserting ``, by a clinical social worker (as defined in
            subsection (hh)(1)), or by a marriage and family therapist (as
            defined in subsection (jjj)(2)),''.
                (7) Inclusion of marriage and family therapists as
            practitioners for assignment of claims.--Section 1842(b)(18)(C)
            of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)) is
            amended by adding at the end the following new clause:
                ``(vii) A marriage and family therapist (as defined in
            section 1861(jjj)(2)).''.
        (b) Coverage of Mental Health Counselor Services.--
                (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as previously amended, is
            further amended--
                        (A) in subparagraph (FF), by striking ``and'' at
                    the end;
                        (B) in subparagraph (GG), by inserting ``and'' at
                    the end; and
                        (C) by adding at the end the following new
                    subparagraph:
                ``(HH) mental health counselor services (as defined in
            subsection (kkk)(1));''.
                (2) Definition.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x), as previously amended, is amended by adding
            at the end the following new subsection:

                       ``Mental Health Counselor Services

        ``(kkk)(1) The term `mental health counselor services' means
    services performed by a mental health counselor (as defined in
    paragraph (2)) for the diagnosis and treatment of mental illnesses
    which the mental health counselor is legally authorized to perform
    under State law (or the State regulatory mechanism provided by the
    State law) of the State in which such services are performed, as would
    otherwise be covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or other
    provider charges or is paid any amounts with respect to the furnishing
    of such services.
        ``(2) The term `mental health counselor' means an individual who--
                ``(A) possesses a master's or doctor's degree which
            qualifies the individual for licensure or certification for the
            practice of mental health counseling in the State in which the
            services are performed;
                ``(B) after obtaining such a degree has performed at least
            2 years of supervised mental health counselor practice; and
                ``(C) is licensed or certified as a mental health counselor
            or professional counselor by the State in which the services
            are performed.''.
                (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)), as amended by subsection (a)(3), is further
            amended--
                        (A) by striking ``and'' at the end of clause (iv);
                        (B) by adding ``and'' at the end of clause (v); and
                        (C) by adding at the end the following new clause:
                                ``(vi) mental health counselor services;''.
                (4) Amount of payment.--
                        (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)), as amended by
                    subsection (a), is further amended--
                                (i) by striking ``and'' before ``(X)''; and
                                (ii) by inserting before the semicolon at
                            the end the following: ``, and (Y), with
                            respect to mental health counselor services
                            under section 1861(s)(2)(HH), the amounts paid
                            shall be 80 percent of the lesser of the actual
                            charge for the services or 75 percent of the
                            amount determined for payment of a psychologist
                            under clause (L)''.
                        (B) Development of criteria with respect to
                    consultation with a physician.--The Secretary of Health
                    and Human Services shall, taking into consideration
                    concerns for patient confidentiality, develop criteria
                    with respect to payment for mental health counselor
                    services for which payment may be made directly to the
                    mental health counselor under part B of title XVIII of
                    the Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a counselor must agree to consult with a
                    patient's attending or primary care physician in
                    accordance with such criteria.
                (5) Exclusion of mental health counselor services from
            skilled nursing facility prospective payment system.--Section
            1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1307(a) and
            subsection (a), is amended by inserting ``mental health
            counselor services (as defined in section 1861(kkk)(1)),''
            after ``marriage and family therapist services (as defined in
            subsection (jjj)(1)),''.
                (6) Coverage of mental health counselor services provided
            in rural health clinics and federally qualified health
            centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
            U.S.C. 1395x(aa)(1)(B)), as amended by subsection (a), is
            amended by striking ``or by a marriage and family therapist (as
            defined in subsection (jjj)(2)),'' and inserting ``by a
            marriage and family therapist (as defined in subsection
            (jjj)(2)), or a mental health counselor (as defined in
            subsection (kkk)(2)),''.
                (7) Inclusion of mental health counselors as practitioners
            for assignment of claims.--Section 1842(b)(18)(C) of the Social
            Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by
            subsection (a)(7), is amended by adding at the end the
            following new clause:
                ``(viii) A mental health counselor (as defined in section
            1861(kkk)(2)).''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after January 1, 2011.

    SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

        Section 138(a)(1) of the Medicare Improvements for Patients and
    Providers Act of 2008 (Public Law 110-275) is amended by striking
    ``December 31, 2009'' and inserting ``December 31, 2011''.

    SEC. 1310. EXPANDING ACCESS TO VACCINES.

        (a) In General.--Paragraph (10) of section 1861(s) of the Social
    Security Act (42 U.S.C. 1395w(s)) is amended to read as follows:
                ``(10) federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration;''.
        (b) Federally Recommended Vaccines Defined.--Section 1861 of such
    Act is further amended by adding at the end the following new
    subsection:

                        ``Federally Recommended Vaccines

        ``(lll) The term `federally recommended vaccine' means an approved
    vaccine recommended by the Advisory Committee on Immunization Practices
    (an advisory committee established by the Secretary, acting through the
    Director of the Centers for Disease Control and Prevention).''.
        (c) Conforming Amendments.--
                (1) Section 1833 of such Act (42 U.S.C. 1395l) is amended,
            in each of subsections (a)(1)(B), (a)(2)(G), and (a)(3)(A), by
            striking ``1861(s)(10)(A)'' and inserting ``1861(s)(10)'' each
            place it appears.
                (2) Section 1842(o)(1)(A)(iv) of such Act (42 U.S.C.
            1395u(o)(1)(A)(iv)) is amended--
                        (A) by striking ``subparagraph (A) or (B) of''; and
                        (B) by inserting before the period the following:
                    ``and before January 1, 2011, and influenza vaccines
                    furnished on or after January 1, 2011''.
                (3) Section 1847A(c)(6) of such Act (42 U.S.C. 1395w-
            3a(c)(6)) is amended by striking subparagraph (G) and inserting
            the following:
                        ``(G) Implementation.--Chapter 35 of title 44,
                    United States Code shall not apply to manufacturer
                    provision of information pursuant to section
                    1927(b)(3)(A)(iii) for purposes of implementation of
                    this section.''.
                (4) Section 1860D-2(e)(1) of such Act (42 U.S.C. 1395w-
            102(e)(1)) is amended by striking ``such term includes a
            vaccine'' and all that follows through ``its administration)
            and''.
                (5) Section 1861(ww)(2)(A) of such Act (42 U.S.C.
            1395x(ww)(2)(A))) is amended by striking ``Pneumococcal,
            influenza, and hepatitis B vaccine and administration'' and
            inserting ``Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration''.
                (6) Section 1861(iii)(1) of such Act, as added by section
            1305(a), is amended by amending subparagraph (J) to read as
            follows:
                ``(J) Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration.''.
                (7) Section 1927(b)(3)(A)(iii) of such Act (42 U.S.C.
            1396r-8(b)(3)(A)(iii)) is amended, in the matter following
            subclause (III), by inserting ``(A)(iv) (including influenza
            vaccines furnished on or after January 1, 2011),'' after
            ``described in subparagraph''
        (d) Effective Dates.--The amendments made by--
                (1) this section (other than by subsection (c)(7)) shall
            apply to vaccines administered on or after January 1, 2011; and
                (2) by subsection (c)(7) shall apply to calendar quarters
            beginning on or after January 1, 2010.

    SEC. 1311. EXPANSION OF MEDICARE-COVERED PREVENTIVE SERVICES AT
                  FEDERALLY QUALIFIED HEALTH CENTERS.

         Section 1861(aa)(3)(A) of the Social Security Act (42 U.S.C. 1395w
    (aa)(3)(A)) is amended to read as follows:
                        ``(A) services of the type described subparagraphs
                    (A) through (C) of paragraph (1) and services described
                    in section 1861(iii); and''.

                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.

        (a) In General.--Title XI of the Social Security Act is amended by
    adding at the end the following new part:

                  ``Part D--Comparative Effectiveness Research

                      ``comparative effectiveness research

        ``Sec. 1181.  (a) Center for Comparative Effectiveness Research
    Established.--
                ``(1) In general.--The Secretary shall establish within the
            Agency for Healthcare Research and Quality a Center for
            Comparative Effectiveness Research (in this section referred to
            as the `Center') to conduct, support, and synthesize research
            (including research conducted or supported under section 1013
            of the Medicare Prescription Drug, Improvement, and
            Modernization Act of 2003) with respect to the outcomes,
            effectiveness, and appropriateness of health care services and
            procedures in order to identify the manner in which diseases,
            disorders, and other health conditions can most effectively and
            appropriately be prevented, diagnosed, treated, and managed
            clinically.
                ``(2) Duties.--The Center shall--
                        ``(A) conduct, support, and synthesize research
                    relevant to the comparative effectiveness of the full
                    spectrum of health care items, services and systems,
                    including pharmaceuticals, medical devices, medical and
                    surgical procedures, and other medical interventions;
                        ``(B) conduct and support systematic reviews of
                    clinical research, including original research
                    conducted subsequent to the date of the enactment of
                    this section;
                        ``(C) continuously develop rigorous scientific
                    methodologies for conducting comparative effectiveness
                    studies, and use such methodologies appropriately;
                        ``(D) submit to the Comparative Effectiveness
                    Research Commission, the Secretary, and Congress
                    appropriate relevant reports described in subsection
                    (d)(2); and
                        ``(E) encourage, as appropriate, the development
                    and use of clinical registries and the development of
                    clinical effectiveness research data networks from
                    electronic health records, post marketing drug and
                    medical device surveillance efforts, and other forms of
                    electronic health data.
                ``(3) Powers.--
                        ``(A) Obtaining official data.--The Center may
                    secure directly from any department or agency of the
                    United States information necessary to enable it to
                    carry out this section. Upon request of the Center, the
                    head of that department or agency shall furnish that
                    information to the Center on an agreed upon schedule.
                        ``(B) Data collection.--In order to carry out its
                    functions, the Center shall--
                                ``(i) utilize existing information, both
                            published and unpublished, where possible,
                            collected and assessed either by its own staff
                            or under other arrangements made in accordance
                            with this section,
                                ``(ii) carry out, or award grants or
                            contracts for, original research and
                            experimentation, where existing information is
                            inadequate, and
                                ``(iii) adopt procedures allowing any
                            interested party to submit information for the
                            use by the Center and Commission under
                            subsection (b) in making reports and
                            recommendations.
                        ``(C) Access of gao to information.--The
                    Comptroller General shall have unrestricted access to
                    all deliberations, records, and nonproprietary data of
                    the Center and Commission under subsection (b),
                    immediately upon request.
                        ``(D) Periodic audit.--The Center and Commission
                    under subsection (b) shall be subject to periodic audit
                    by the Comptroller General.
        ``(b) Oversight by Comparative Effectiveness Research Commission.--
                ``(1) In general.--The Secretary shall establish an
            independent Comparative Effectiveness Research Commission (in
            this section referred to as the `Commission') to oversee and
            evaluate the activities carried out by the Center under
            subsection (a), subject to the authority of the Secretary, to
            ensure such activities result in highly credible research and
            information resulting from such research.
                ``(2) Duties.--The Commission shall--
                        ``(A) determine national priorities for research
                    described in subsection (a) and in making such
                    determinations consult with a broad array of public and
                    private stakeholders, including patients and health
                    care providers and payers;
                        ``(B) monitor the appropriateness of use of the
                    CERTF described in subsection (g) with respect to the
                    timely production of comparative effectiveness research
                    determined to be a national priority under subparagraph
                    (A);
                        ``(C) identify highly credible research methods and
                    standards of evidence for such research to be
                    considered by the Center;
                        ``(D) review the methodologies developed by the
                    center under subsection (a)(2)(C);
                        ``(E) not later than one year after the date of the
                    enactment of this section, enter into an arrangement
                    under which the Institute of Medicine of the National
                    Academy of Sciences shall conduct an evaluation and
                    report on standards of evidence for such research;
                        ``(F) support forums to increase stakeholder
                    awareness and permit stakeholder feedback on the
                    efforts of the Center to advance methods and standards
                    that promote highly credible research;
                        ``(G) make recommendations for policies that would
                    allow for public access of data produced under this
                    section, in accordance with appropriate privacy and
                    proprietary practices, while ensuring that the
                    information produced through such data is timely and
                    credible;
                        ``(H) appoint a clinical perspective advisory panel
                    for each research priority determined under
                    subparagraph (A), which shall consult with patients and
                    advise the Center on research questions, methods, and
                    evidence gaps in terms of clinical outcomes for the
                    specific research inquiry to be examined with respect
                    to such priority to ensure that the information
                    produced from such research is clinically relevant to
                    decisions made by clinicians and patients at the point
                    of care;
                        ``(I) make recommendations for the priority for
                    periodic reviews of previous comparative effectiveness
                    research and studies conducted by the Center under
                    subsection (a);
                        ``(J) routinely review processes of the Center with
                    respect to such research to confirm that the
                    information produced by such research is objective,
                    credible, consistent with standards of evidence
                    established under this section, and developed through a
                    transparent process that includes consultations with
                    appropriate stakeholders; and
                        ``(K) make recommendations to the center for the
                    broad dissemination of the findings of research
                    conducted and supported under this section that enables
                    clinicians, patients, consumers, and payers to make
                    more informed health care decisions that improve
                    quality and value.
                ``(3) Composition of commission.--
                        ``(A) In general.--The members of the Commission
                    shall consist of--
                                ``(i) the Director of the Agency for
                            Healthcare Research and Quality;
                                ``(ii) the Chief Medical Officer of the
                            Centers for Medicare & Medicaid Services; and
                                ``(iii) 15 additional members who shall
                            represent broad constituencies of stakeholders
                            including clinicians, patients, researchers,
                            third-party payers, consumers of Federal and
                            State beneficiary programs.
                    Of such members, at least 9 shall be practicing
                    physicians, health care practitioners, consumers, or
                    patients.
                        ``(B) Qualifications.--
                                ``(i) Diverse representation of
                            perspectives.--The members of the Commission
                            shall represent a broad range of perspectives
                            and shall collectively have experience in the
                            following areas:
                                        ``(I) Epidemiology.
                                        ``(II) Health services research.
                                        ``(III) Bioethics.
                                        ``(IV) Decision sciences.
                                        ``(V) Health disparities.
                                        ``(VI) Economics.
                                ``(ii) Diverse representation of health
                            care community.--At least one member shall
                            represent each of the following health care
                            communities:
                                        ``(I) Patients.
                                        ``(II) Health care consumers.
                                        ``(III) Practicing Physicians,
                                    including surgeons.
                                        ``(IV) Other health care
                                    practitioners engaged in clinical care.
                                        ``(V) Employers.
                                        ``(VI) Public payers.
                                        ``(VII) Insurance plans.
                                        ``(VIII) Clinical researchers who
                                    conduct research on behalf of
                                    pharmaceutical or device manufacturers.
                        ``(C) Limitation.--No more than 3 of the Members of
                    the Commission may be representatives of pharmaceutical
                    or device manufacturers and such representatives shall
                    be clinical researchers described under subparagraph
                    (B)(ii)(VIII).
                ``(4) Appointment.--
                        ``(A) In general.--The Secretary shall appoint the
                    members of the Commission.
                        ``(B) Consultation.--In considering candidates for
                    appointment to the Commission, the Secretary may
                    consult with the Government Accountability Office and
                    the Institute of Medicine of the National Academy of
                    Sciences.
                ``(5) Chairman; vice chairman.--The Secretary shall
            designate a member of the Commission, at the time of
            appointment of the member, as Chairman and a member as Vice
            Chairman for that term of appointment, except that in the case
            of vacancy of the Chairmanship or Vice Chairmanship, the
            Secretary may designate another member for the remainder of
            that member's term. The Chairman shall serve as an ex officio
            member of the National Advisory Council of the Agency for
            Health Care Research and Quality under section 931(c)(3)(B) of
            the Public Health Service Act.
                ``(6) Terms.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), each member of the Commission shall
                    be appointed for a term of 4 years.
                        ``(B) Terms of initial appointees.--Of the members
                    first appointed--
                                ``(i) 8 shall be appointed for a term of 4
                            years; and
                                ``(ii) 7 shall be appointed for a term of 3
                            years.
                ``(7) Coordination.--To enhance effectiveness and
            coordination, the Secretary is encouraged, to the greatest
            extent possible, to seek coordination between the Commission
            and the National Advisory Council of the Agency for Healthcare
            Research and Quality.
                ``(8) Conflicts of interest.--
                        ``(A) In general.--In appointing the members of the
                    Commission or a clinical perspective advisory panel
                    described in paragraph (2)(H), the Secretary or the
                    Commission, respectively, shall take into consideration
                    any financial interest (as defined in subparagraph
                    (D)), consistent with this paragraph, and develop a
                    plan for managing any identified conflicts.
                        ``(B) Evaluation and criteria.--When considering an
                    appointment to the Commission or a clinical perspective
                    advisory panel described paragraph (2)(H) the Secretary
                    or the Commission shall review the expertise of the
                    individual and the financial disclosure report filed by
                    the individual pursuant to the Ethics in Government Act
                    of 1978 for each individual under consideration for the
                    appointment, so as to reduce the likelihood that an
                    appointed individual will later require a written
                    determination as referred to in section 208(b)(1) of
                    title 18, United States Code, a written certification
                    as referred to in section 208(b)(3) of title 18, United
                    States Code, or a waiver as referred to in subparagraph
                    (D)(iii) for service on the Commission at a meeting of
                    the Commission.
                        ``(C) Disclosures; prohibitions on participation;
                    waivers.--
                                ``(i) Disclosure of financial interest.--
                            Prior to a meeting of the Commission or a
                            clinical perspective advisory panel described
                            in paragraph (2)(H) regarding a `particular
                            matter' (as that term is used in section 208 of
                            title 18, United States Code), each member of
                            the Commission or the clinical perspective
                            advisory panel who is a full-time Government
                            employee or special Government employee shall
                            disclose to the Secretary financial interests
                            in accordance with subsection (b) of such
                            section 208.
                                ``(ii) Prohibitions on participation.--
                            Except as provided under clause (iii), a member
                            of the Commission or a clinical perspective
                            advisory panel described in paragraph (2)(H)
                            may not participate with respect to a
                            particular matter considered in meeting of the
                            Commission or the clinical perspective advisory
                            panel if such member (or an immediate family
                            member of such member) has a financial interest
                            that could be affected by the advice given to
                            the Secretary with respect to such matter,
                            excluding interests exempted in regulations
                            issued by the Director of the Office of
                            Government Ethics as too remote or
                            inconsequential to affect the integrity of the
                            services of the Government officers or
                            employees to which such regulations apply.
                                ``(iii) Waiver.--If the Secretary
                            determines it necessary to afford the
                            Commission or a clinical perspective advisory
                            panel described in paragraph 2(H) essential
                            expertise, the Secretary may grant a waiver of
                            the prohibition in clause (ii) to permit a
                            member described in such subparagraph to--
                                        ``(I) participate as a non-voting
                                    member with respect to a particular
                                    matter considered in a Commission or a
                                    clinical perspective advisory panel
                                    meeting; or
                                        ``(II) participate as a voting
                                    member with respect to a particular
                                    matter considered in a Commission or a
                                    clinical perspective advisory panel
                                    meeting.
                                ``(iv) Limitation on waivers and other
                            exceptions.--
                                        ``(I) Determination of allowable
                                    exceptions for the commission.--The
                                    number of waivers granted to members of
                                    the Commission cannot exceed one-half
                                    of the total number of members for the
                                    Commission.
                                        ``(II) Prohibition on voting status
                                    on clinical perspective advisory
                                    panels.--No voting member of any
                                    clinical perspective advisory panel
                                    shall be in receipt of a waiver. No
                                    more than two nonvoting members of any
                                    clinical perspective advisory panel
                                    shall receive a waiver.
                        ``(D) Financial interest defined.--For purposes of
                    this paragraph, the term `financial interest' means a
                    financial interest under section 208(a) of title 18,
                    United States Code.
                ``(9) Compensation.--While serving on the business of the
            Commission (including travel time), a member of the Commission
            shall be entitled to compensation at the per diem equivalent of
            the rate provided for level IV of the Executive Schedule under
            section 5315 of title 5, United States Code; and while so
            serving away from home and the member's regular place of
            business, a member may be allowed travel expenses, as
            authorized by the Director of the Commission.
                ``(10) Availability of reports.--The Commission shall
            transmit to the Secretary a copy of each report submitted under
            this subsection and shall make such reports available to the
            public.
                ``(11) Director and staff; experts and consultants.--
            Subject to such review as the Secretary deems necessary to
            assure the efficient administration of the Commission, the
            Commission may--
                        ``(A) appoint an Executive Director (subject to the
                    approval of the Secretary) and such other personnel as
                    Federal employees under section 2105 of title 5, United
                    States Code, as may be necessary to carry out its
                    duties (without regard to the provisions of title 5,
                    United States Code, governing appointments in the
                    competitive service);
                        ``(B) seek such assistance and support as may be
                    required in the performance of its duties from
                    appropriate Federal departments and agencies;
                        ``(C) enter into contracts or make other
                    arrangements, as may be necessary for the conduct of
                    the work of the Commission (without regard to section
                    3709 of the Revised Statutes (41 U.S.C. 5));
                        ``(D) make advance, progress, and other payments
                    which relate to the work of the Commission;
                        ``(E) provide transportation and subsistence for
                    persons serving without compensation; and
                        ``(F) prescribe such rules and regulations as it
                    deems necessary with respect to the internal
                    organization and operation of the Commission.
        ``(c) Research Requirements.--Any research conducted, supported, or
    synthesized under this section shall meet the following requirements:
                ``(1) Ensuring transparency, credibility, and access.--
                        ``(A) The establishment of the agenda and conduct
                    of the research shall be insulated from inappropriate
                    political or stakeholder influence.
                        ``(B) Methods of conducting such research shall be
                    scientifically based.
                        ``(C) All aspects of the prioritization of
                    research, conduct of the research, and development of
                    conclusions based on the research shall be transparent
                    to all stakeholders.
                        ``(D) The process and methods for conducting such
                    research shall be publicly documented and available to
                    all stakeholders.
                        ``(E) Throughout the process of such research, the
                    Center shall provide opportunities for all stakeholders
                    involved to review and provide public comment on the
                    methods and findings of such research.
                ``(2) Use of clinical perspective advisory panels.--The
            research shall meet a national research priority determined
            under subsection (b)(2)(A) and shall consider advice given to
            the Center by the clinical perspective advisory panel for the
            national research priority.
                ``(3) Stakeholder input.--
                        ``(A) In general.--The Commission shall consult
                    with patients, health care providers, health care
                    consumer representatives, and other appropriate
                    stakeholders with an interest in the research through a
                    transparent process recommended by the Commission.
                        ``(B) Specific areas of consultation.--Consultation
                    shall include where deemed appropriate by the
                    Commission--
                                ``(i) recommending research priorities and
                            questions;
                                ``(ii) recommending research methodologies;
                            and
                                ``(iii) advising on and assisting with
                            efforts to disseminate research findings.
                        ``(C) Ombudsman.--The Secretary shall designate a
                    patient ombudsman. The ombudsman shall--
                                ``(i) serve as an available point of
                            contact for any patients with an interest in
                            proposed comparative effectiveness studies by
                            the Center; and
                                ``(ii) ensure that any comments from
                            patients regarding proposed comparative
                            effectiveness studies are reviewed by the
                            Commission.
                ``(4) Taking into account potential differences.--Research
            shall--
                        ``(A) be designed, as appropriate, to take into
                    account the potential for differences in the
                    effectiveness of health care items and services used
                    with various subpopulations such as racial and ethnic
                    minorities, women, different age groups (including
                    children, adolescents, adults, and seniors), and
                    individuals with different comorbidities; and--
                        ``(B) seek, as feasible and appropriate, to include
                    members of such subpopulations as subjects in the
                    research.
        ``(d) Public Access to Comparative Effectiveness Information.--
                ``(1) In general.--Not later than 90 days after receipt by
            the Center or Commission, as applicable, of a relevant report
            described in paragraph (2) made by the Center, Commission, or
            clinical perspective advisory panel under this section,
            appropriate information contained in such report shall be
            posted on the official public Internet site of the Center and
            of the Commission, as applicable.
                ``(2) Relevant reports described.--For purposes of this
            section, a relevant report is each of the following submitted
            by the Center or a grantee or contractor of the Center:
                        ``(A) Any interim or progress reports as deemed
                    appropriate by the Secretary.
                        ``(B) Stakeholder comments.
                        ``(C) A final report.
        ``(e) Dissemination and Incorporation of Comparative Effectiveness
    Information.--
                ``(1) Dissemination.--The Center shall provide for the
            dissemination of appropriate findings produced by research
            supported, conducted, or synthesized under this section to
            health care providers, patients, vendors of health information
            technology focused on clinical decision support, appropriate
            professional associations, and Federal and private health
            plans, and other relevant stakeholders. In disseminating such
            findings the Center shall--
                        ``(A) convey findings of research so that they are
                    comprehensible and useful to patients and providers in
                    making health care decisions;
                        ``(B) discuss findings and other considerations
                    specific to certain sub-populations, risk factors, and
                    comorbidities as appropriate;
                        ``(C) include considerations such as limitations of
                    research and what further research may be needed, as
                    appropriate;
                        ``(D) not include any data that the dissemination
                    of which would violate the privacy of research
                    participants or violate any confidentiality agreements
                    made with respect to the use of data under this
                    section; and
                        ``(E) assist the users of health information
                    technology focused on clinical decision support to
                    promote the timely incorporation of such findings into
                    clinical practices and promote the ease of use of such
                    incorporation.
                ``(2) Dissemination protocols and strategies.--The Center
            shall develop protocols and strategies for the appropriate
            dissemination of research findings in order to ensure effective
            communication of findings and the use and incorporation of such
            findings into relevant activities for the purpose of informing
            higher quality and more effective and efficient decisions
            regarding medical items and services. In developing and
            adopting such protocols and strategies, the Center shall
            consult with stakeholders concerning the types of dissemination
            that will be most useful to the end users of information and
            may provide for the utilization of multiple formats for
            conveying findings to different audiences, including
            dissemination to individuals with limited English proficiency.
        ``(f) Reports to Congress.--
                ``(1) Annual reports.--Beginning not later than one year
            after the date of the enactment of this section, the Director
            of the Agency of Healthcare Research and Quality and the
            Commission shall submit to Congress an annual report on the
            activities of the Center and the Commission, as well as the
            research, conducted under this section. Each such report shall
            include a discussion of the Center's compliance with subsection
            (c)(4)(B), including any reasons for lack of compliance with
            such subsection.
                ``(2) Recommendation for fair share per capita amount for
            all-payer financing.--Beginning not later than December 31,
            2011, the Secretary shall submit to Congress an annual
            recommendation for a fair share per capita amount described in
            subsection (c)(1) of section 9511 of the Internal Revenue Code
            of 1986 for purposes of funding the CERTF under such section.
                ``(3) Analysis and review.--Not later than December 31,
            2013, the Secretary, in consultation with the Commission, shall
            submit to Congress a report on all activities conducted or
            supported under this section as of such date. Such report shall
            include an evaluation of the overall costs of such activities
            and an analysis of the backlog of any research proposals
            approved by the Commission but not funded.
        ``(g) Funding of Comparative Effectiveness Research.--For fiscal
    year 2010 and each subsequent fiscal year, amounts in the Comparative
    Effectiveness Research Trust Fund (referred to in this section as the
    `CERTF') under section 9511 of the Internal Revenue Code of 1986 shall
    be available, without the need for further appropriations and without
    fiscal year limitation, to the Secretary to carry out this section.
        ``(h) Construction.--Nothing in this section shall be construed to
    permit the Commission or the Center to mandate coverage, reimbursement,
    or other policies for any public or private payer.''.
        (b) Comparative Effectiveness Research Trust Fund; Financing for
    the Trust Fund.--For provision establishing a Comparative Effectiveness
    Research Trust Fund and financing such Trust Fund, see section 1802.

                     Subtitle B--Nursing Home Transparency

       PART 1--IMPROVING TRANSPARENCY OF INFORMATION ON SKILLED NURSING
                       FACILITIES AND NURSING FACILITIES

    SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE
                  PARTIES INFORMATION.

        (a) In General.--Section 1124 of the Social Security Act (42 U.S.C.
    1320a-3) is amended by adding at the end the following new subsection:
        ``(c) Required Disclosure of Ownership and Additional Disclosable
    Parties Information.--
                ``(1) Disclosure.--A facility (as defined in paragraph
            (7)(B)) shall have the information described in paragraph (3)
            available--
                        ``(A) during the period beginning on the date of
                    the enactment of this subsection and ending on the date
                    such information is made available to the public under
                    section 1411(b) of the America's Affordable Health
                    Choices Act of 2009, for submission to the Secretary,
                    the Inspector General of the Department of Health and
                    Human Services, the State in which the facility is
                    located, and the State long-term care ombudsman in the
                    case where the Secretary, the Inspector General, the
                    State, or the State long-term care ombudsman requests
                    such information; and
                        ``(B) beginning on the effective date of the final
                    regulations promulgated under paragraph (4)(A), for
                    reporting such information in accordance with such
                    final regulations.
            Nothing in subparagraph (A) shall be construed as authorizing a
            facility to dispose of or delete information described in such
            subparagraph after the effective date of the final regulations
            promulgated under paragraph (4)(A).
                ``(2) Public availability of information.--During the
            period described in paragraph (1)(A), a facility shall--
                        ``(A) make the information described in paragraph
                    (3) available to the public upon request and update
                    such information as may be necessary to reflect changes
                    in such information; and
                        ``(B) post a notice of the availability of such
                    information in the lobby of the facility in a prominent
                    manner.
                ``(3) Information described.--
                        ``(A) In general.--The following information is
                    described in this paragraph:
                                ``(i) The information described in
                            subsections (a) and (b), subject to
                            subparagraph (C).
                                ``(ii) The identity of and information on--
                                        ``(I) each member of the governing
                                    body of the facility, including the
                                    name, title, and period of service of
                                    each such member;
                                        ``(II) each person or entity who is
                                    an officer, director, member, partner,
                                    trustee, or managing employee of the
                                    facility, including the name, title,
                                    and date of start of service of each
                                    such person or entity; and
                                        ``(III) each person or entity who
                                    is an additional disclosable party of
                                    the facility.
                                ``(iii) The organizational structure of
                            each person and entity described in subclauses
                            (II) and (III) of clause (ii) and a description
                            of the relationship of each such person or
                            entity to the facility and to one another.
                        ``(B) Special rule where information is already
                    reported or submitted.--To the extent that information
                    reported by a facility to the Internal Revenue Service
                    on Form 990, information submitted by a facility to the
                    Securities and Exchange Commission, or information
                    otherwise submitted to the Secretary or any other
                    Federal agency contains the information described in
                    clauses (i), (ii), or (iii) of subparagraph (A), the
                    Secretary may allow, to the extent practicable, such
                    Form or such information to meet the requirements of
                    paragraph (1) and to be submitted in a manner specified
                    by the Secretary.
                        ``(C) Special rule.--In applying subparagraph
                    (A)(i)--
                                ``(i) with respect to subsections (a) and
                            (b), `ownership or control interest' shall
                            include direct or indirect interests, including
                            such interests in intermediate entities; and
                                ``(ii) subsection (a)(3)(A)(ii) shall
                            include the owner of a whole or part interest
                            in any mortgage, deed of trust, note, or other
                            obligation secured, in whole or in part, by the
                            entity or any of the property or assets
                            thereof, if the interest is equal to or exceeds
                            5 percent of the total property or assets of
                            the entirety.
                ``(4) Reporting.--
                        ``(A) In general.--Not later than the date that is
                    2 years after the date of the enactment of this
                    subsection, the Secretary shall promulgate regulations
                    requiring, effective on the date that is 90 days after
                    the date on which such final regulations are published
                    in the Federal Register, a facility to report the
                    information described in paragraph (3) to the Secretary
                    in a standardized format, and such other regulations as
                    are necessary to carry out this subsection. Such final
                    regulations shall ensure that the facility certifies,
                    as a condition of participation and payment under the
                    program under title XVIII or XIX, that the information
                    reported by the facility in accordance with such final
                    regulations is accurate and current.
                        ``(B) Guidance.--The Secretary shall provide
                    guidance and technical assistance to States on how to
                    adopt the standardized format under subparagraph (A).
                ``(5) No effect on existing reporting requirements.--
            Nothing in this subsection shall reduce, diminish, or alter any
            reporting requirement for a facility that is in effect as of
            the date of the enactment of this subsection.
                ``(6) Definitions.--In this subsection:
                        ``(A) Additional disclosable party.--The term
                    `additional disclosable party' means, with respect to a
                    facility, any person or entity who--
                                ``(i) exercises operational, financial, or
                            managerial control over the facility or a part
                            thereof, or provides policies or procedures for
                            any of the operations of the facility, or
                            provides financial or cash management services
                            to the facility;
                                ``(ii) leases or subleases real property to
                            the facility, or owns a whole or part interest
                            equal to or exceeding 5 percent of the total
                            value of such real property;
                                ``(iii) lends funds or provides a financial
                            guarantee to the facility in an amount which is
                            equal to or exceeds $50,000; or
                                ``(iv) provides management or
                            administrative services, clinical consulting
                            services, or accounting or financial services
                            to the facility.
                        ``(B) Facility.--The term `facility' means a
                    disclosing entity which is--
                                ``(i) a skilled nursing facility (as
                            defined in section 1819(a)); or
                                ``(ii) a nursing facility (as defined in
                            section 1919(a)).
                        ``(C) Managing employee.--The term `managing
                    employee' means, with respect to a facility, an
                    individual (including a general manager, business
                    manager, administrator, director, or consultant) who
                    directly or indirectly manages, advises, or supervises
                    any element of the practices, finances, or operations
                    of the facility.
                        ``(D) Organizational structure.--The term
                    `organizational structure' means, in the case of--
                                ``(i) a corporation, the officers,
                            directors, and shareholders of the corporation
                            who have an ownership interest in the
                            corporation which is equal to or exceeds 5
                            percent;
                                ``(ii) a limited liability company, the
                            members and managers of the limited liability
                            company (including, as applicable, what
                            percentage each member and manager has of the
                            ownership interest in the limited liability
                            company);
                                ``(iii) a general partnership, the partners
                            of the general partnership;
                                ``(iv) a limited partnership, the general
                            partners and any limited partners of the
                            limited partnership who have an ownership
                            interest in the limited partnership which is
                            equal to or exceeds 10 percent;
                                ``(v) a trust, the trustees of the trust;
                                ``(vi) an individual, contact information
                            for the individual; and
                                ``(vii) any other person or entity, such
                            information as the Secretary determines
                            appropriate.''.
        (b) Public Availability of Information.--
                (1) In general.--Not later than the date that is 1 year
            after the date on which the final regulations promulgated under
            section 1124(c)(4)(A) of the Social Security Act, as added by
            subsection (a), are published in the Federal Register, the
            information reported in accordance with such final regulations
            shall be made available to the public in accordance with
            procedures established by the Secretary.
                (2) Definitions.--In this subsection:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395i-3(a)).
        (c) Conforming Amendments.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by
            striking subparagraph (B) and redesignating subparagraph (C) as
            subparagraph (B).
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking
            subparagraph (B) and redesignating subparagraph (C) as
            subparagraph (B).

    SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

        (a) Effective Compliance and Ethics Programs.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by
            section 1411(c)(1), is amended by adding at the end the
            following new subparagraph:
                        ``(C) Compliance and ethics programs.--
                                ``(i) Requirement.--On or after the date
                            that is 36 months after the date of the
                            enactment of this subparagraph, a skilled
                            nursing facility shall, with respect to the
                            entity that operates the facility (in this
                            subparagraph referred to as the `operating
                            organization' or `organization'), have in
                            operation a compliance and ethics program that
                            is effective in preventing and detecting
                            criminal, civil, and administrative violations
                            under this Act and in promoting quality of care
                            consistent with regulations developed under
                            clause (ii).
                                ``(ii) Development of regulations.--
                                        ``(I) In general.--Not later than
                                    the date that is 2 years after such
                                    date of the enactment, the Secretary,
                                    in consultation with the Inspector
                                    General of the Department of Health and
                                    Human Services, shall promulgate
                                    regulations for an effective compliance
                                    and ethics program for operating
                                    organizations, which may include a
                                    model compliance program.
                                        ``(II) Design of regulations.--Such
                                    regulations with respect to specific
                                    elements or formality of a program may
                                    vary with the size of the organization,
                                    such that larger organizations should
                                    have a more formal and rigorous program
                                    and include established written
                                    policies defining the standards and
                                    procedures to be followed by its
                                    employees. Such requirements shall
                                    specifically apply to the corporate
                                    level management of multi-unit nursing
                                    home chains.
                                        ``(III) Evaluation.--Not later than
                                    3 years after the date of promulgation
                                    of regulations under this clause, the
                                    Secretary shall complete an evaluation
                                    of the compliance and ethics programs
                                    required to be established under this
                                    subparagraph. Such evaluation shall
                                    determine if such programs led to
                                    changes in deficiency citations,
                                    changes in quality performance, or
                                    changes in other metrics of resident
                                    quality of care. The Secretary shall
                                    submit to Congress a report on such
                                    evaluation and shall include in such
                                    report such recommendations regarding
                                    changes in the requirements for such
                                    programs as the Secretary determines
                                    appropriate.
                                ``(iii) Requirements for compliance and
                            ethics programs.--In this subparagraph, the
                            term `compliance and ethics program' means,
                            with respect to a skilled nursing facility, a
                            program of the operating organization that--
                                        ``(I) has been reasonably designed,
                                    implemented, and enforced so that it
                                    generally will be effective in
                                    preventing and detecting criminal,
                                    civil, and administrative violations
                                    under this Act and in promoting quality
                                    of care; and
                                        ``(II) includes at least the
                                    required components specified in clause
                                    (iv).
                                ``(iv) Required components of program.--The
                            required components of a compliance and ethics
                            program of an organization are the following:
                                        ``(I) The organization must have
                                    established compliance standards and
                                    procedures to be followed by its
                                    employees, contractors, and other
                                    agents that are reasonably capable of
                                    reducing the prospect of criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(II) Specific individuals within
                                    high-level personnel of the
                                    organization must have been assigned
                                    overall responsibility to oversee
                                    compliance with such standards and
                                    procedures and have sufficient
                                    resources and authority to assure such
                                    compliance.
                                        ``(III) The organization must have
                                    used due care not to delegate
                                    substantial discretionary authority to
                                    individuals whom the organization knew,
                                    or should have known through the
                                    exercise of due diligence, had a
                                    propensity to engage in criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(IV) The organization must have
                                    taken steps to communicate effectively
                                    its standards and procedures to all
                                    employees and other agents, such as by
                                    requiring participation in training
                                    programs or by disseminating
                                    publications that explain in a
                                    practical manner what is required.
                                        ``(V) The organization must have
                                    taken reasonable steps to achieve
                                    compliance with its standards, such as
                                    by utilizing monitoring and auditing
                                    systems reasonably designed to detect
                                    criminal, civil, and administrative
                                    violations under this Act by its
                                    employees and other agents and by
                                    having in place and publicizing a
                                    reporting system whereby employees and
                                    other agents could report violations by
                                    others within the organization without
                                    fear of retribution.
                                        ``(VI) The standards must have been
                                    consistently enforced through
                                    appropriate disciplinary mechanisms,
                                    including, as appropriate, discipline
                                    of individuals responsible for the
                                    failure to detect an offense.
                                        ``(VII) After an offense has been
                                    detected, the organization must have
                                    taken all reasonable steps to respond
                                    appropriately to the offense and to
                                    prevent further similar offenses,
                                    including repayment of any funds to
                                    which it was not entitled and any
                                    necessary modification to its program
                                    to prevent and detect criminal, civil,
                                    and administrative violations under
                                    this Act.
                                        ``(VIII) The organization must
                                    periodically undertake reassessment of
                                    its compliance program to identify
                                    changes necessary to reflect changes
                                    within the organization and its
                                    facilities.
                                ``(v) Coordination.--The provisions of this
                            subparagraph shall apply with respect to a
                            skilled nursing facility in lieu of section
                            1874(d).''.
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)), as amended by section
            1411(c)(2), is amended by adding at the end the following new
            subparagraph:
                        ``(C) Compliance and ethics program.--
                                ``(i) Requirement.--On or after the date
                            that is 36 months after the date of the
                            enactment of this subparagraph, a nursing
                            facility shall, with respect to the entity that
                            operates the facility (in this subparagraph
                            referred to as the `operating organization' or
                            `organization'), have in operation a compliance
                            and ethics program that is effective in
                            preventing and detecting criminal, civil, and
                            administrative violations under this Act and in
                            promoting quality of care consistent with
                            regulations developed under clause (ii).
                                ``(ii) Development of regulations.--
                                        ``(I) In general.--Not later than
                                    the date that is 2 years after such
                                    date of the enactment, the Secretary,
                                    in consultation with the Inspector
                                    General of the Department of Health and
                                    Human Services, shall develop
                                    regulations for an effective compliance
                                    and ethics program for operating
                                    organizations, which may include a
                                    model compliance program.
                                        ``(II) Design of regulations.--Such
                                    regulations with respect to specific
                                    elements or formality of a program may
                                    vary with the size of the organization,
                                    such that larger organizations should
                                    have a more formal and rigorous program
                                    and include established written
                                    policies defining the standards and
                                    procedures to be followed by its
                                    employees. Such requirements may
                                    specifically apply to the corporate
                                    level management of multi-unit nursing
                                    home chains.
                                        ``(III) Evaluation.--Not later than
                                    3 years after the date of promulgation
                                    of regulations under this clause the
                                    Secretary shall complete an evaluation
                                    of the compliance and ethics programs
                                    required to be established under this
                                    subparagraph. Such evaluation shall
                                    determine if such programs led to
                                    changes in deficiency citations,
                                    changes in quality performance, or
                                    changes in other metrics of resident
                                    quality of care. The Secretary shall
                                    submit to Congress a report on such
                                    evaluation and shall include in such
                                    report such recommendations regarding
                                    changes in the requirements for such
                                    programs as the Secretary determines
                                    appropriate.
                                ``(iii) Requirements for compliance and
                            ethics programs.--In this subparagraph, the
                            term `compliance and ethics program' means,
                            with respect to a nursing facility, a program
                            of the operating organization that--
                                        ``(I) has been reasonably designed,
                                    implemented, and enforced so that it
                                    generally will be effective in
                                    preventing and detecting criminal,
                                    civil, and administrative violations
                                    under this Act and in promoting quality
                                    of care; and
                                        ``(II) includes at least the
                                    required components specified in clause
                                    (iv).
                                ``(iv) Required components of program.--The
                            required components of a compliance and ethics
                            program of an organization are the following:
                                        ``(I) The organization must have
                                    established compliance standards and
                                    procedures to be followed by its
                                    employees and other agents that are
                                    reasonably capable of reducing the
                                    prospect of criminal, civil, and
                                    administrative violations under this
                                    Act.
                                        ``(II) Specific individuals within
                                    high-level personnel of the
                                    organization must have been assigned
                                    overall responsibility to oversee
                                    compliance with such standards and
                                    procedures and has sufficient resources
                                    and authority to assure such
                                    compliance.
                                        ``(III) The organization must have
                                    used due care not to delegate
                                    substantial discretionary authority to
                                    individuals whom the organization knew,
                                    or should have known through the
                                    exercise of due diligence, had a
                                    propensity to engage in criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(IV) The organization must have
                                    taken steps to communicate effectively
                                    its standards and procedures to all
                                    employees and other agents, such as by
                                    requiring participation in training
                                    programs or by disseminating
                                    publications that explain in a
                                    practical manner what is required.
                                        ``(V) The organization must have
                                    taken reasonable steps to achieve
                                    compliance with its standards, such as
                                    by utilizing monitoring and auditing
                                    systems reasonably designed to detect
                                    criminal, civil, and administrative
                                    violations under this Act by its
                                    employees and other agents and by
                                    having in place and publicizing a
                                    reporting system whereby employees and
                                    other agents could report violations by
                                    others within the organization without
                                    fear of retribution.
                                        ``(VI) The standards must have been
                                    consistently enforced through
                                    appropriate disciplinary mechanisms,
                                    including, as appropriate, discipline
                                    of individuals responsible for the
                                    failure to detect an offense.
                                        ``(VII) After an offense has been
                                    detected, the organization must have
                                    taken all reasonable steps to respond
                                    appropriately to the offense and to
                                    prevent further similar offenses,
                                    including repayment of any funds to
                                    which it was not entitled and any
                                    necessary modification to its program
                                    to prevent and detect criminal, civil,
                                    and administrative violations under
                                    this Act.
                                        ``(VIII) The organization must
                                    periodically undertake reassessment of
                                    its compliance program to identify
                                    changes necessary to reflect changes
                                    within the organization and its
                                    facilities.
                                ``(v) Coordination.--The provisions of this
                            subparagraph shall apply with respect to a
                            nursing facility in lieu of section
                            1902(a)(77).''.
        (b) Quality Assurance and Performance Improvement Program.--
                (1) Skilled nursing facilities.--Section 1819(b)(1)(B) of
            the Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                        (A) by striking ``assurance'' and inserting
                    ``assurance and quality assurance and performance
                    improvement program'';
                        (B) by designating the matter beginning with ``A
                    skilled nursing facility'' as a clause (i) with the
                    heading ``In general.--'' and the appropriate
                    indentation;
                        (C) in clause (i) (as so designated by subparagraph
                    (B)), by redesignating clauses (i) and (ii) as
                    subclauses (I) and (II), respectively; and
                        (D) by adding at the end the following new clause:
                                ``(ii) Quality assurance and performance
                            improvement program.--
                                        ``(I) In general.--Not later than
                                    December 31, 2011, the Secretary shall
                                    establish and implement a quality
                                    assurance and performance improvement
                                    program (in this clause referred to as
                                    the `QAPI program') for skilled nursing
                                    facilities, including multi-unit chains
                                    of such facilities. Under the QAPI
                                    program, the Secretary shall establish
                                    standards relating to such facilities
                                    and provide technical assistance to
                                    such facilities on the development of
                                    best practices in order to meet such
                                    standards. Not later than 1 year after
                                    the date on which the regulations are
                                    promulgated under subclause (II), a
                                    skilled nursing facility must submit to
                                    the Secretary a plan for the facility
                                    to meet such standards and implement
                                    such best practices, including how to
                                    coordinate the implementation of such
                                    plan with quality assessment and
                                    assurance activities conducted under
                                    clause (i).
                                        ``(II) Regulations.--The Secretary
                                    shall promulgate regulations to carry
                                    out this clause.''.
                (2) Nursing facilities.--Section 1919(b)(1)(B) of the
            Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                        (A) by striking ``assurance'' and inserting
                    ``assurance and quality assurance and performance
                    improvement program'';
                        (B) by designating the matter beginning with ``A
                    nursing facility'' as a clause (i) with the heading
                    ``In general.--'' and the appropriate indentation; and
                        (C) by adding at the end the following new clause:
                                ``(ii) Quality assurance and performance
                            improvement program.--
                                        ``(I) In general.--Not later than
                                    December 31, 2011, the Secretary shall
                                    establish and implement a quality
                                    assurance and performance improvement
                                    program (in this clause referred to as
                                    the `QAPI program') for nursing
                                    facilities, including multi-unit chains
                                    of such facilities. Under the QAPI
                                    program, the Secretary shall establish
                                    standards relating to such facilities
                                    and provide technical assistance to
                                    such facilities on the development of
                                    best practices in order to meet such
                                    standards. Not later than 1 year after
                                    the date on which the regulations are
                                    promulgated under subclause (II), a
                                    nursing facility must submit to the
                                    Secretary a plan for the facility to
                                    meet such standards and implement such
                                    best practices, including how to
                                    coordinate the implementation of such
                                    plan with quality assessment and
                                    assurance activities conducted under
                                    clause (i).
                                        ``(II) Regulations.--The Secretary
                                    shall promulgate regulations to carry
                                    out this clause.''.
                (3) Proposal to revise quality assurance and performance
            improvement programs.--The Secretary shall include in the
            proposed rule published under section 1888(e) of the Social
            Security Act (42 U.S.C. 1395yy(e)(5)(A)) for the subsequent
            fiscal year to the extent otherwise authorized under section
            1819(b)(1)(B) or 1819(d)(1)(C) of the Social Security Act or
            other statutory or regulatory authority, one or more proposals
            for skilled nursing facilities to modify and strengthen quality
            assurance and performance improvement programs in such
            facilities. At the time of publication of such proposed rule
            and to the extent otherwise authorized under section
            1919(b)(1)(B) or 1919(d)(1)(C) of such Act or other regulatory
            authority.
                (4) Facility plan.--Not later than 1 year after the date on
            which the regulations are promulgated under subclause (II) of
            clause (ii) of sections 1819(b)(1)(B) and 1919(b)(1)(B) of the
            Social Security Act, as added by paragraphs (1) and (2), a
            skilled nursing facility and a nursing facility must submit to
            the Secretary a plan for the facility to meet the standards
            under such regulations and implement such best practices,
            including how to coordinate the implementation of such plan
            with quality assessment and assurance activities conducted
            under clause (i) of such sections.
        (c) GAO Study on Nursing Facility Undercapitalization.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study that examines the following:
                        (A) The extent to which corporations that own or
                    operate large numbers of nursing facilities, taking
                    into account ownership type (including private equity
                    and control interests), are undercapitalizing such
                    facilities.
                        (B) The effects of such undercapitalization on
                    quality of care, including staffing and food costs, at
                    such facilities.
                        (C) Options to address such undercapitalization,
                    such as requirements relating to surety bonds,
                    liability insurance, or minimum capitalization.
                (2) Report.--Not later than 18 months after the date of the
            enactment of this Act, the Comptroller General shall submit to
            Congress a report on the study conducted under paragraph (1).
                (3) Nursing facility.--In this subsection, the term
            ``nursing facility'' includes a skilled nursing facility.

    SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819 of the Social Security Act
            (42 U.S.C. 1395i-3) is amended--
                        (A) by redesignating subsection (i) as subsection
                    (j); and
                        (B) by inserting after subsection (h) the following
                    new subsection:
        ``(i) Nursing Home Compare Website.--
                ``(1) Inclusion of additional information.--
                        ``(A) In general.--The Secretary shall ensure that
                    the Department of Health and Human Services includes,
                    as part of the information provided for comparison of
                    nursing homes on the official Internet website of the
                    Federal Government for Medicare beneficiaries (commonly
                    referred to as the `Nursing Home Compare' Medicare
                    website) (or a successor website), the following
                    information in a manner that is prominent, easily
                    accessible, readily understandable to consumers of
                    long-term care services, and searchable:
                                ``(i) Information that is reported to the
                            Secretary under section 1124(c)(4).
                                ``(ii) Information on the `Special Focus
                            Facility program' (or a successor program)
                            established by the Centers for Medicare and
                            Medicaid Services, according to procedures
                            established by the Secretary. Such procedures
                            shall provide for the inclusion of information
                            with respect to, and the names and locations
                            of, those facilities that, since the previous
                            quarter--
                                        ``(I) were newly enrolled in the
                                    program;
                                        ``(II) are enrolled in the program
                                    and have failed to significantly
                                    improve;
                                        ``(III) are enrolled in the program
                                    and have significantly improved;
                                        ``(IV) have graduated from the
                                    program; and
                                        ``(V) have closed voluntarily or no
                                    longer participate under this title.
                                ``(iii) Staffing data for each facility
                            (including resident census data and data on the
                            hours of care provided per resident per day)
                            based on data submitted under subsection
                            (b)(8)(C), including information on staffing
                            turnover and tenure, in a format that is
                            clearly understandable to consumers of long-
                            term care services and allows such consumers to
                            compare differences in staffing between
                            facilities and State and national averages for
                            the facilities. Such format shall include--
                                        ``(I) concise explanations of how
                                    to interpret the data (such as a plain
                                    English explanation of data reflecting
                                    `nursing home staff hours per resident
                                    day');
                                        ``(II) differences in types of
                                    staff (such as training associated with
                                    different categories of staff);
                                        ``(III) the relationship between
                                    nurse staffing levels and quality of
                                    care; and
                                        ``(IV) an explanation that
                                    appropriate staffing levels vary based
                                    on patient case mix.
                                ``(iv) Links to State Internet websites
                            with information regarding State survey and
                            certification programs, links to Form 2567
                            State inspection reports (or a successor form)
                            on such websites, information to guide
                            consumers in how to interpret and understand
                            such reports, and the facility plan of
                            correction or other response to such report.
                                ``(v) The standardized complaint form
                            developed under subsection (f)(8), including
                            explanatory material on what complaint forms
                            are, how they are used, and how to file a
                            complaint with the State survey and
                            certification program and the State long-term
                            care ombudsman program.
                                ``(vi) Summary information on the number,
                            type, severity, and outcome of substantiated
                            complaints.
                                ``(vii) The number of adjudicated instances
                            of criminal violations by employees of a
                            nursing facility--
                                        ``(I) that were committed inside
                                    the facility;
                                        ``(II) with respect to such
                                    instances of violations or crimes
                                    committed inside of the facility that
                                    were the violations or crimes of abuse,
                                    neglect, and exploitation, criminal
                                    sexual abuse, or other violations or
                                    crimes that resulted in serious bodily
                                    injury; and
                                        ``(III) the number of civil
                                    monetary penalties levied against the
                                    facility, employees, contractors, and
                                    other agents.
                        ``(B) Deadline for provision of information.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the Secretary shall ensure that
                            the information described in subparagraph (A)
                            is included on such website (or a successor
                            website) not later than 1 year after the date
                            of the enactment of this subsection.
                                ``(ii) Exception.--The Secretary shall
                            ensure that the information described in
                            subparagraph (A)(i) and (A)(iii) is included on
                            such website (or a successor website) not later
                            than the date on which the requirements under
                            section 1124(c)(4) and subsection (b)(8)(C)(ii)
                            are implemented.
                ``(2) Review and modification of website.--
                        ``(A) In general.--The Secretary shall establish a
                    process--
                                ``(i) to review the accuracy, clarity of
                            presentation, timeliness, and comprehensiveness
                            of information reported on such website as of
                            the day before the date of the enactment of
                            this subsection; and
                                ``(ii) not later than 1 year after the date
                            of the enactment of this subsection, to modify
                            or revamp such website in accordance with the
                            review conducted under clause (i).
                        ``(B) Consultation.--In conducting the review under
                    subparagraph (A)(i), the Secretary shall consult with--
                                ``(i) State long-term care ombudsman
                            programs;
                                ``(ii) consumer advocacy groups;
                                ``(iii) provider stakeholder groups; and
                                ``(iv) any other representatives of
                            programs or groups the Secretary determines
                            appropriate.''.
                (2) Timeliness of submission of survey and certification
            information.--
                        (A) In general.--Section 1819(g)(5) of the Social
                    Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by
                    adding at the end the following new subparagraph:
                        ``(E) Submission of survey and certification
                    information to the secretary.--In order to improve the
                    timeliness of information made available to the public
                    under subparagraph (A) and provided on the Nursing Home
                    Compare Medicare website under subsection (i), each
                    State shall submit information respecting any survey or
                    certification made respecting a skilled nursing
                    facility (including any enforcement actions taken by
                    the State) to the Secretary not later than the date on
                    which the State sends such information to the facility.
                    The Secretary shall use the information submitted under
                    the preceding sentence to update the information
                    provided on the Nursing Home Compare Medicare website
                    as expeditiously as practicable but not less frequently
                    than quarterly.''.
                        (B) Effective date.--The amendment made by this
                    paragraph shall take effect 1 year after the date of
                    the enactment of this Act.
                (3) Special focus facility program.--Section 1819(f) of
            such Act is amended by adding at the end the following new
            paragraph:
                ``(8) Special focus facility program.--
                        ``(A) In general.--The Secretary shall conduct a
                    special focus facility program for enforcement of
                    requirements for skilled nursing facilities that the
                    Secretary has identified as having substantially failed
                    to meet applicable requirement of this Act.
                        ``(B) Periodic surveys.--Under such program the
                    Secretary shall conduct surveys of each facility in the
                    program not less than once every 6 months.''.
        (b) Nursing Facilities.--
                (1) In general.--Section 1919 of the Social Security Act
            (42 U.S.C. 1396r) is amended--
                        (A) by redesignating subsection (i) as subsection
                    (j); and
                        (B) by inserting after subsection (h) the following
                    new subsection:
        ``(i) Nursing Home Compare Website.--
                ``(1) Inclusion of additional information.--
                        ``(A) In general.--The Secretary shall ensure that
                    the Department of Health and Human Services includes,
                    as part of the information provided for comparison of
                    nursing homes on the official Internet website of the
                    Federal Government for Medicare beneficiaries (commonly
                    referred to as the `Nursing Home Compare' Medicare
                    website) (or a successor website), the following
                    information in a manner that is prominent, easily
                    accessible, readily understandable to consumers of
                    long-term care services, and searchable:
                                ``(i) Staffing data for each facility
                            (including resident census data and data on the
                            hours of care provided per resident per day)
                            based on data submitted under subsection
                            (b)(8)(C)(ii), including information on
                            staffing turnover and tenure, in a format that
                            is clearly understandable to consumers of long-
                            term care services and allows such consumers to
                            compare differences in staffing between
                            facilities and State and national averages for
                            the facilities. Such format shall include--
                                        ``(I) concise explanations of how
                                    to interpret the data (such as plain
                                    English explanation of data reflecting
                                    `nursing home staff hours per resident
                                    day');
                                        ``(II) differences in types of
                                    staff (such as training associated with
                                    different categories of staff);
                                        ``(III) the relationship between
                                    nurse staffing levels and quality of
                                    care; and
                                        ``(IV) an explanation that
                                    appropriate staffing levels vary based
                                    on patient case mix.
                                ``(ii) Links to State Internet websites
                            with information regarding State survey and
                            certification programs, links to Form 2567
                            State inspection reports (or a successor form)
                            on such websites, information to guide
                            consumers in how to interpret and understand
                            such reports, and the facility plan of
                            correction or other response to such report.
                                ``(iii) The standardized complaint form
                            developed under subsection (f)(10), including
                            explanatory material on what complaint forms
                            are, how they are used, and how to file a
                            complaint with the State survey and
                            certification program and the State long-term
                            care ombudsman program.
                                ``(iv) Summary information on the number,
                            type, severity, and outcome of substantiated
                            complaints.
                                ``(v) The number of adjudicated instances
                            of criminal violations by employees of a
                            nursing facility--
                                        ``(I) that were committed inside of
                                    the facility; and
                                        ``(II) with respect to such
                                    instances of violations or crimes
                                    committed outside of the facility, that
                                    were the violations or crimes that
                                    resulted in the serious bodily injury
                                    of an elder.
                        ``(B) Deadline for provision of information.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the Secretary shall ensure that
                            the information described in subparagraph (A)
                            is included on such website (or a successor
                            website) not later than 1 year after the date
                            of the enactment of this subsection.
                                ``(ii) Exception.--The Secretary shall
                            ensure that the information described in
                            subparagraph (A)(i) and (A)(iii) is included on
                            such website (or a successor website) not later
                            than the date on which the requirements under
                            section 1124(c)(4) and subsection (b)(8)(C)(ii)
                            are implemented.
                ``(2) Review and modification of website.--
                        ``(A) In general.--The Secretary shall establish a
                    process--
                                ``(i) to review the accuracy, clarity of
                            presentation, timeliness, and comprehensiveness
                            of information reported on such website as of
                            the day before the date of the enactment of
                            this subsection; and
                                ``(ii) not later than 1 year after the date
                            of the enactment of this subsection, to modify
                            or revamp such website in accordance with the
                            review conducted under clause (i).
                        ``(B) Consultation.--In conducting the review under
                    subparagraph (A)(i), the Secretary shall consult with--
                                ``(i) State long-term care ombudsman
                            programs;
                                ``(ii) consumer advocacy groups;
                                ``(iii) provider stakeholder groups;
                                ``(iv) skilled nursing facility employees
                            and their representatives; and
                                ``(v) any other representatives of programs
                            or groups the Secretary determines
                            appropriate.''.
                (2) Timeliness of submission of survey and certification
            information.--
                        (A) In general.--Section 1919(g)(5) of the Social
                    Security Act (42 U.S.C. 1396r(g)(5)) is amended by
                    adding at the end the following new subparagraph:
                        ``(E) Submission of survey and certification
                    information to the secretary.--In order to improve the
                    timeliness of information made available to the public
                    under subparagraph (A) and provided on the Nursing Home
                    Compare Medicare website under subsection (i), each
                    State shall submit information respecting any survey or
                    certification made respecting a nursing facility
                    (including any enforcement actions taken by the State)
                    to the Secretary not later than the date on which the
                    State sends such information to the facility. The
                    Secretary shall use the information submitted under the
                    preceding sentence to update the information provided
                    on the Nursing Home Compare Medicare website as
                    expeditiously as practicable but not less frequently
                    than quarterly.''.
                        (B) Effective date.--The amendment made by this
                    paragraph shall take effect 1 year after the date of
                    the enactment of this Act.
                (3) Special focus facility program.--Section 1919(f) of
            such Act is amended by adding at the end of the following new
            paragraph:
                ``(10) Special focus facility program.--
                        ``(A) In general.--The Secretary shall conduct a
                    special focus facility program for enforcement of
                    requirements for nursing facilities that the Secretary
                    has identified as having substantially failed to meet
                    applicable requirements of this Act.
                        ``(B) Periodic surveys.--Under such program the
                    Secretary shall conduct surveys of each facility in the
                    program not less often than once every 6 months.''.
        (c) Availability of Reports on Surveys, Certifications, and
    Complaint Investigations.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by
            sections 1411 and 1412, is amended by adding at the end the
            following new subparagraph:
                        ``(D) Availability of survey, certification, and
                    complaint investigation reports.--A skilled nursing
                    facility must--
                                ``(i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the facility
                            during the 3 preceding years available for any
                            individual to review upon request; and
                                ``(ii) post notice of the availability of
                            such reports in areas of the facility that are
                            prominent and accessible to the public.
                    The facility shall not make available under clause (i)
                    identifying information about complainants or
                    residents.''.
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)), as amended by sections
            1411 and 1412, is amended by adding at the end the following
            new subparagraph:
                        ``(D) Availability of survey, certification, and
                    complaint investigation reports.--A nursing facility
                    must--
                                ``(i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the facility
                            during the 3 preceding years available for any
                            individual to review upon request; and
                                ``(ii) post notice of the availability of
                            such reports in areas of the facility that are
                            prominent and accessible to the public.
                    The facility shall not make available under clause (i)
                    identifying information about complainants or
                    residents.''.
                (3) Effective date.--The amendments made by this subsection
            shall take effect 1 year after the date of the enactment of
            this Act.
        (d) Guidance to States on Form 2567 State Inspection Reports and
    Complaint Investigation Reports.--
                (1) Guidance.--The Secretary of Health and Human Services
            (in this subtitle referred to as the ``Secretary'') shall
            provide guidance to States on how States can establish
            electronic links to Form 2567 State inspection reports (or a
            successor form), complaint investigation reports, and a
            facility's plan of correction or other response to such Form
            2567 State inspection reports (or a successor form) on the
            Internet website of the State that provides information on
            skilled nursing facilities and nursing facilities and the
            Secretary shall, if possible, include such information on
            Nursing Home Compare.
                (2) Requirement.--Section 1902(a)(9) of the Social Security
            Act (42 U.S.C. 1396a(a)(9)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (B);
                        (B) by striking the semicolon at the end of
                    subparagraph (C) and inserting ``, and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(D) that the State maintain a consumer-oriented
                    website providing useful information to consumers
                    regarding all skilled nursing facilities and all
                    nursing facilities in the State, including for each
                    facility, Form 2567 State inspection reports (or a
                    successor form), complaint investigation reports, the
                    facility's plan of correction, and such other
                    information that the State or the Secretary considers
                    useful in assisting the public to assess the quality of
                    long term care options and the quality of care provided
                    by individual facilities;''.
                (3) Definitions.--In this subsection:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395i-3(a)).

    SEC. 1414. REPORTING OF EXPENDITURES.

        Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is
    amended by adding at the end the following new subsection:
        ``(f) Reporting of Direct Care Expenditures.--
                ``(1) In general.--For cost reports submitted under this
            title for cost reporting periods beginning on or after the date
            that is 3 years after the date of the enactment of this
            subsection, skilled nursing facilities shall separately report
            expenditures for wages and benefits for direct care staff
            (breaking out (at a minimum) registered nurses, licensed
            professional nurses, certified nurse assistants, and other
            medical and therapy staff).
                ``(2) Modification of form.--The Secretary, in consultation
            with private sector accountants experienced with skilled
            nursing facility cost reports, shall redesign such reports to
            meet the requirement of paragraph (1) not later than 1 year
            after the date of the enactment of this subsection.
                ``(3) Categorization by functional accounts.--Not later
            than 30 months after the date of the enactment of this
            subsection, the Secretary, working in consultation with the
            Medicare Payment Advisory Commission, the Inspector General of
            the Department of Health and Human Services, and other expert
            parties the Secretary determines appropriate, shall take the
            expenditures listed on cost reports, as modified under
            paragraph (1), submitted by skilled nursing facilities and
            categorize such expenditures, regardless of any source of
            payment for such expenditures, for each skilled nursing
            facility into the following functional accounts on an annual
            basis:
                        ``(A) Spending on direct care services (including
                    nursing, therapy, and medical services).
                        ``(B) Spending on indirect care (including
                    housekeeping and dietary services).
                        ``(C) Capital assets (including building and land
                    costs).
                        ``(D) Administrative services costs.
                ``(4) Availability of information submitted.--The Secretary
            shall establish procedures to make information on expenditures
            submitted under this subsection readily available to interested
            parties upon request, subject to such requirements as the
            Secretary may specify under the procedures established under
            this paragraph.''.

    SEC. 1415. STANDARDIZED COMPLAINT FORM.

        (a) Skilled Nursing Facilities.--
                (1) Development by the secretary.--Section 1819(f) of the
            Social Security Act (42 U.S.C. 1395i-3(f)), as amended by
            section 1413(a)(3), is amended by adding at the end the
            following new paragraph:
                ``(9) Standardized complaint form.--The Secretary shall
            develop a standardized complaint form for use by a resident (or
            a person acting on the resident's behalf) in filing a complaint
            with a State survey and certification agency and a State long-
            term care ombudsman program with respect to a skilled nursing
            facility.''.
                (2) State requirements.--Section 1819(e) of the Social
            Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the
            end the following new paragraph:
                ``(6) Complaint processes and whistle-blower protection.--
                        ``(A) Complaint forms.--The State must make the
                    standardized complaint form developed under subsection
                    (f)(9) available upon request to--
                                ``(i) a resident of a skilled nursing
                            facility;
                                ``(ii) any person acting on the resident's
                            behalf; and
                                ``(iii) any person who works at a skilled
                            nursing facility or is a representative of such
                            a worker.
                        ``(B) Complaint resolution process.--The State must
                    establish a complaint resolution process in order to
                    ensure that a resident, the legal representative of a
                    resident of a skilled nursing facility, or other
                    responsible party is not retaliated against if the
                    resident, legal representative, or responsible party
                    has complained, in good faith, about the quality of
                    care or other issues relating to the skilled nursing
                    facility, that the legal representative of a resident
                    of a skilled nursing facility or other responsible
                    party is not denied access to such resident or
                    otherwise retaliated against if such representative
                    party has complained, in good faith, about the quality
                    of care provided by the facility or other issues
                    relating to the facility, and that a person who works
                    at a skilled nursing facility is not retaliated against
                    if the worker has complained, in good faith, about
                    quality of care or services or an issue relating to the
                    quality of care or services provided at the facility,
                    whether the resident, legal representative, other
                    responsible party, or worker used the form developed
                    under subsection (f)(9) or some other method for
                    submitting the complaint. Such complaint resolution
                    process shall include--
                                ``(i) procedures to assure accurate
                            tracking of complaints received, including
                            notification to the complainant that a
                            complaint has been received;
                                ``(ii) procedures to determine the likely
                            severity of a complaint and for the
                            investigation of the complaint;
                                ``(iii) deadlines for responding to a
                            complaint and for notifying the complainant of
                            the outcome of the investigation; and
                                ``(iv) procedures to ensure that the
                            identity of the complainant will be kept
                            confidential.
                        ``(C) Whistleblower protection.--
                                ``(i) Prohibition against retaliation.--No
                            person who works at a skilled nursing facility
                            may be penalized, discriminated, or retaliated
                            against with respect to any aspect of
                            employment, including discharge, promotion,
                            compensation, terms, conditions, or privileges
                            of employment, or have a contract for services
                            terminated, because the person (or anyone
                            acting at the person's request) complained, in
                            good faith, about the quality of care or
                            services provided by a nursing facility or
                            about other issues relating to quality of care
                            or services, whether using the form developed
                            under subsection (f)(9) or some other method
                            for submitting the complaint.
                                ``(ii) Retaliatory reporting.--A skilled
                            nursing facility may not file a complaint or a
                            report against a person who works (or has
                            worked at the facility with the appropriate
                            State professional disciplinary agency because
                            the person (or anyone acting at the person's
                            request) complained in good faith, as described
                            in clause (i).
                                ``(iii) Commencement of action.--Any person
                            who believes the person has been penalized,
                            discriminated , or retaliated against or had a
                            contract for services terminated in violation
                            of clause (i) or against whom a complaint has
                            been filed in violation of clause (ii) may
                            bring an action at law or equity in the
                            appropriate district court of the United
                            States, which shall have jurisdiction over such
                            action without regard to the amount in
                            controversy or the citizenship of the parties,
                            and which shall have jurisdiction to grant
                            complete relief, including, but not limited to,
                            injunctive relief (such as reinstatement,
                            compensatory damages (which may include
                            reimbursement of lost wages, compensation, and
                            benefits), costs of litigation (including
                            reasonable attorney and expert witness fees),
                            exemplary damages where appropriate, and such
                            other relief as the court deems just and
                            proper.
                                ``(iv) Rights not waivable.--The rights
                            protected by this paragraph may not be
                            diminished by contract or other agreement, and
                            nothing in this paragraph shall be construed to
                            diminish any greater or additional protection
                            provided by Federal or State law or by contract
                            or other agreement.
                                ``(v) Requirement to post notice of
                            employee rights.--Each skilled nursing facility
                            shall post conspicuously in an appropriate
                            location a sign (in a form specified by the
                            Secretary) specifying the rights of persons
                            under this paragraph and including a statement
                            that an employee may file a complaint with the
                            Secretary against a skilled nursing facility
                            that violates the provisions of this paragraph
                            and information with respect to the manner of
                            filing such a complaint.
                        ``(D) Rule of construction.--Nothing in this
                    paragraph shall be construed as preventing a resident
                    of a skilled nursing facility (or a person acting on
                    the resident's behalf) from submitting a complaint in a
                    manner or format other than by using the standardized
                    complaint form developed under subsection (f)(9)
                    (including submitting a complaint orally).
                        ``(E) Good faith defined.--For purposes of this
                    paragraph, an individual shall be deemed to be acting
                    in good faith with respect to the filing of a complaint
                    if the individual reasonably believes--
                                ``(i) the information reported or disclosed
                            in the complaint is true; and
                                ``(ii) the violation of this title has
                            occurred or may occur in relation to such
                            information.''.
        (b) Nursing Facilities.--
                (1) Development by the secretary.--Section 1919(f) of the
            Social Security Act (42 U.S.C. 1395i-3(f)), as amended by
            section 1413(b), is amended by adding at the end the following
            new paragraph:
                ``(11) Standardized complaint form.--The Secretary shall
            develop a standardized complaint form for use by a resident (or
            a person acting on the resident's behalf) in filing a complaint
            with a State survey and certification agency and a State long-
            term care ombudsman program with respect to a nursing
            facility.''.
                (2) State requirements.--Section 1919(e) of the Social
            Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the
            end the following new paragraph:
                ``(8) Complaint processes and whistleblower protection.--
                        ``(A) Complaint forms.--The State must make the
                    standardized complaint form developed under subsection
                    (f)(11) available upon request to--
                                ``(i) a resident of a nursing facility;
                                ``(ii) any person acting on the resident's
                            behalf; and
                                ``(iii) any person who works at a nursing
                            facility or a representative of such a worker.
                        ``(B) Complaint resolution process.--The State must
                    establish a complaint resolution process in order to
                    ensure that a resident, the legal representative of a
                    resident of a nursing facility, or other responsible
                    party is not retaliated against if the resident, legal
                    representative, or responsible party has complained, in
                    good faith, about the quality of care or other issues
                    relating to the nursing facility, that the legal
                    representative of a resident of a nursing facility or
                    other responsible party is not denied access to such
                    resident or otherwise retaliated against if such
                    representative party has complained, in good faith,
                    about the quality of care provided by the facility or
                    other issues relating to the facility, and that a
                    person who works at a nursing facility is not
                    retaliated against if the worker has complained, in
                    good faith, about quality of care or services or an
                    issue relating to the quality of care or services
                    provided at the facility, whether the resident, legal
                    representative, other responsible party, or worker used
                    the form developed under subsection (f)(11) or some
                    other method for submitting the complaint. Such
                    complaint resolution process shall include--
                                ``(i) procedures to assure accurate
                            tracking of complaints received, including
                            notification to the complainant that a
                            complaint has been received;
                                ``(ii) procedures to determine the likely
                            severity of a complaint and for the
                            investigation of the complaint;
                                ``(iii) deadlines for responding to a
                            complaint and for notifying the complainant of
                            the outcome of the investigation; and
                                ``(iv) procedures to ensure that the
                            identity of the complainant will be kept
                            confidential.
                        ``(C) Whistleblower protection.--
                                ``(i) Prohibition against retaliation.--No
                            person who works at a nursing facility may be
                            penalized, discriminated, or retaliated against
                            with respect to any aspect of employment,
                            including discharge, promotion, compensation,
                            terms, conditions, or privileges of employment,
                            or have a contract for services terminated,
                            because the person (or anyone acting at the
                            person's request) complained, in good faith,
                            about the quality of care or services provided
                            by a nursing facility or about other issues
                            relating to quality of care or services,
                            whether using the form developed under
                            subsection (f)(11) or some other method for
                            submitting the complaint.
                                ``(ii) Retaliatory reporting.--A nursing
                            facility may not file a complaint or a report
                            against a person who works (or has worked at
                            the facility with the appropriate State
                            professional disciplinary agency because the
                            person (or anyone acting at the person's
                            request) complained in good faith, as described
                            in clause (i).
                                ``(iii) Commencement of action.--Any person
                            who believes the person has been penalized,
                            discriminated, or retaliated against or had a
                            contract for services terminated in violation
                            of clause (i) or against whom a complaint has
                            been filed in violation of clause (ii) may
                            bring an action at law or equity in the
                            appropriate district court of the United
                            States, which shall have jurisdiction over such
                            action without regard to the amount in
                            controversy or the citizenship of the parties,
                            and which shall have jurisdiction to grant
                            complete relief, including, but not limited to,
                            injunctive relief (such as reinstatement,
                            compensatory damages (which may include
                            reimbursement of lost wages, compensation, and
                            benefits), costs of litigation (including
                            reasonable attorney and expert witness fees),
                            exemplary damages where appropriate, and such
                            other relief as the court deems just and
                            proper.
                                ``(iv) Rights not waivable.--The rights
                            protected by this paragraph may not be
                            diminished by contract or other agreement, and
                            nothing in this paragraph shall be construed to
                            diminish any greater or additional protection
                            provided by Federal or State law or by contract
                            or other agreement.
                                ``(v) Requirement to post notice of
                            employee rights.--Each nursing facility shall
                            post conspicuously in an appropriate location a
                            sign (in a form specified by the Secretary)
                            specifying the rights of persons under this
                            paragraph and including a statement that an
                            employee may file a complaint with the
                            Secretary against a nursing facility that
                            violates the provisions of this paragraph and
                            information with respect to the manner of
                            filing such a complaint.
                        ``(D) Rule of construction.--Nothing in this
                    paragraph shall be construed as preventing a resident
                    of a nursing facility (or a person acting on the
                    resident's behalf) from submitting a complaint in a
                    manner or format other than by using the standardized
                    complaint form developed under subsection (f)(11)
                    (including submitting a complaint orally).
                        ``(E) Good faith defined.--For purposes of this
                    paragraph, an individual shall be deemed to be acting
                    in good faith with respect to the filing of a complaint
                    if the individual reasonably believes--
                                ``(i) the information reported or disclosed
                            in the complaint is true; and
                                ``(ii) the violation of this title has
                            occurred or may occur in relation to such
                            information.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.

        (a) Skilled Nursing Facilities.--Section 1819(b)(8) of the Social
    Security Act (42 U.S.C. 1395i-3(b)(8)) is amended by adding at the end
    the following new subparagraph:
                        ``(C) Submission of staffing information based on
                    payroll data in a uniform format.--Beginning not later
                    than 2 years after the date of the enactment of this
                    subparagraph, and after consulting with State long-term
                    care ombudsman programs, consumer advocacy groups,
                    provider stakeholder groups, employees and their
                    representatives, and other parties the Secretary deems
                    appropriate, the Secretary shall require a skilled
                    nursing facility to electronically submit to the
                    Secretary direct care staffing information (including
                    information with respect to agency and contract staff)
                    based on payroll and other verifiable and auditable
                    data in a uniform format (according to specifications
                    established by the Secretary in consultation with such
                    programs, groups, and parties). Such specifications
                    shall require that the information submitted under the
                    preceding sentence--
                                ``(i) specify the category of work a
                            certified employee performs (such as whether
                            the employee is a registered nurse, licensed
                            practical nurse, licensed vocational nurse,
                            certified nursing assistant, therapist, or
                            other medical personnel);
                                ``(ii) include resident census data and
                            information on resident case mix;
                                ``(iii) include a regular reporting
                            schedule; and
                                ``(iv) include information on employee
                            turnover and tenure and on the hours of care
                            provided by each category of certified
                            employees referenced in clause (i) per resident
                            per day.
                    Nothing in this subparagraph shall be construed as
                    preventing the Secretary from requiring submission of
                    such information with respect to specific categories,
                    such as nursing staff, before other categories of
                    certified employees. Information under this
                    subparagraph with respect to agency and contract staff
                    shall be kept separate from information on employee
                    staffing.''.
        (b) Nursing Facilities.--Section 1919(b)(8) of the Social Security
    Act (42 U.S.C. 1396r(b)(8)) is amended by adding at the end the
    following new subparagraph:
                        ``(C) Submission of staffing information based on
                    payroll data in a uniform format.--Beginning not later
                    than 2 years after the date of the enactment of this
                    subparagraph, and after consulting with State long-term
                    care ombudsman programs, consumer advocacy groups,
                    provider stakeholder groups, employees and their
                    representatives, and other parties the Secretary deems
                    appropriate, the Secretary shall require a nursing
                    facility to electronically submit to the Secretary
                    direct care staffing information (including information
                    with respect to agency and contract staff) based on
                    payroll and other verifiable and auditable data in a
                    uniform format (according to specifications established
                    by the Secretary in consultation with such programs,
                    groups, and parties). Such specifications shall require
                    that the information submitted under the preceding
                    sentence--
                                ``(i) specify the category of work a
                            certified employee performs (such as whether
                            the employee is a registered nurse, licensed
                            practical nurse, licensed vocational nurse,
                            certified nursing assistant, therapist, or
                            other medical personnel);
                                ``(ii) include resident census data and
                            information on resident case mix;
                                ``(iii) include a regular reporting
                            schedule; and
                                ``(iv) include information on employee
                            turnover and tenure and on the hours of care
                            provided by each category of certified
                            employees referenced in clause (i) per resident
                            per day.
                    Nothing in this subparagraph shall be construed as
                    preventing the Secretary from requiring submission of
                    such information with respect to specific categories,
                    such as nursing staff, before other categories of
                    certified employees. Information under this
                    subparagraph with respect to agency and contract staff
                    shall be kept separate from information on employee
                    staffing.''.

                         PART 2--TARGETING ENFORCEMENT

    SEC. 1421. CIVIL MONEY PENALTIES.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819(h)(2)(B)(ii) of the Social
            Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended to
            read as follows:
                                ``(ii) Authority with respect to civil
                            money penalties.--
                                        ``(I) Amount.--The Secretary may
                                    impose a civil money penalty in the
                                    applicable per instance or per day
                                    amount (as defined in subclause (II)
                                    and (III)) for each day or instance,
                                    respectively, of noncompliance (as
                                    determined appropriate by the
                                    Secretary).
                                        ``(II) Applicable per instance
                                    amount.--In this clause, the term
                                    `applicable per instance amount'
                                    means--
                                                ``(aa) in the case where
                                            the deficiency is found to be a
                                            direct proximate cause of death
                                            of a resident of the facility,
                                            an amount not to exceed
                                            $100,000.
                                                ``(bb) in each case of a
                                            deficiency where the facility
                                            is cited for actual harm or
                                            immediate jeopardy, an amount
                                            not less than $3,050 and not
                                            more than $25,000; and
                                                ``(cc) in each case of any
                                            other deficiency, an amount not
                                            less than $250 and not to
                                            exceed $3050.
                                        ``(III) Applicable per day
                                    amount.--In this clause, the term
                                    `applicable per day amount' means--
                                                ``(aa) in each case of a
                                            deficiency where the facility
                                            is cited for actual harm or
                                            immediate jeopardy, an amount
                                            not less than $3,050 and not
                                            more than $25,000 and
                                                ``(bb) in each case of any
                                            other deficiency, an amount not
                                            less than $250 and not to
                                            exceed $3,050.
                                        ``(IV) Reduction of civil money
                                    penalties in certain circumstances.--
                                    Subject to subclauses (V) and (VI), in
                                    the case where a facility self-reports
                                    and promptly corrects a deficiency for
                                    which a penalty was imposed under this
                                    clause not later than 10 calendar days
                                    after the date of such imposition, the
                                    Secretary may reduce the amount of the
                                    penalty imposed by not more than 50
                                    percent.
                                        ``(V) Prohibition on reduction for
                                    certain deficiencies.--
                                                ``(aa) Repeat
                                            deficiencies.--The Secretary
                                            may not reduce under subclause
                                            (IV) the amount of a penalty if
                                            the deficiency is a repeat
                                            deficiency.
                                                ``(bb) Certain other
                                            deficiencies.--The Secretary
                                            may not reduce under subclause
                                            (IV) the amount of a penalty if
                                            the penalty is imposed for a
                                            deficiency described in
                                            subclause (II)(aa) or (III)(aa)
                                            and the actual harm or
                                            widespread harm immediately
                                            jeopardizes the health or
                                            safety of a resident or
                                            residents of the facility, or
                                            if the penalty is imposed for a
                                            deficiency described in
                                            subclause (II)(bb).
                                        ``(VI) Limitation on aggregate
                                    reductions.--The aggregate reduction in
                                    a penalty under subclause (IV) may not
                                    exceed 35 percent on the basis of self-
                                    reporting, on the basis of a waiver or
                                    an appeal (as provided for under
                                    regulations under section 488.436 of
                                    title 42, Code of Federal Regulations),
                                    or on the basis of both.
                                        ``(VII) Collection of civil money
                                    penalties.--In the case of a civil
                                    money penalty imposed under this
                                    clause, the Secretary--
                                                ``(aa) subject to item
                                            (cc), shall, not later than 30
                                            days after the date of
                                            imposition of the penalty,
                                            provide the opportunity for the
                                            facility to participate in an
                                            independent informal dispute
                                            resolution process which
                                            generates a written record
                                            prior to the collection of such
                                            penalty, but such opportunity
                                            shall not affect the
                                            responsibility of the State
                                            survey agency for making final
                                            recommendations for such
                                            penalties;
                                                ``(bb) in the case where
                                            the penalty is imposed for each
                                            day of noncompliance, shall not
                                            impose a penalty for any day
                                            during the period beginning on
                                            the initial day of the
                                            imposition of the penalty and
                                            ending on the day on which the
                                            informal dispute resolution
                                            process under item (aa) is
                                            completed;
                                                ``(cc) may provide for the
                                            collection of such civil money
                                            penalty and the placement of
                                            such amounts collected in an
                                            escrow account under the
                                            direction of the Secretary on
                                            the earlier of the date on
                                            which the informal dispute
                                            resolution process under item
                                            (aa) is completed or the date
                                            that is 90 days after the date
                                            of the imposition of the
                                            penalty;
                                                ``(dd) may provide that
                                            such amounts collected are kept
                                            in such account pending the
                                            resolution of any subsequent
                                            appeals;
                                                ``(ee) in the case where
                                            the facility successfully
                                            appeals the penalty, may
                                            provide for the return of such
                                            amounts collected (plus
                                            interest) to the facility; and
                                                ``(ff) in the case where
                                            all such appeals are
                                            unsuccessful, may provide that
                                            some portion of such amounts
                                            collected may be used to
                                            support activities that benefit
                                            residents, including assistance
                                            to support and protect
                                            residents of a facility that
                                            closes (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of relocating
                                            residents to home and
                                            community-based settings or
                                            another facility), projects
                                            that support resident and
                                            family councils and other
                                            consumer involvement in
                                            assuring quality care in
                                            facilities, and facility
                                            improvement initiatives
                                            approved by the Secretary
                                            (including joint training of
                                            facility staff and surveyors,
                                            technical assistance for
                                            facilities under quality
                                            assurance programs, the
                                            appointment of temporary
                                            management, and other
                                            activities approved by the
                                            Secretary).
                                        ``(VIII) Procedure.--The provisions
                                    of section 1128A (other than
                                    subsections (a) and (b) and except to
                                    the extent that such provisions require
                                    a hearing prior to the imposition of a
                                    civil money penalty) shall apply to a
                                    civil money penalty under this clause
                                    in the same manner as such provisions
                                    apply to a penalty or proceeding under
                                    section 1128A(a).''.
                (2) Conforming amendment.--The second sentence of section
            1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5))
            is amended by inserting ``(ii),''after ``(i),''.
        (b) Nursing Facilities.--
                (1) Penalties imposed by the state.--
                        (A) In general.--Section 1919(h)(2) of the Social
                    Security Act (42 U.S.C. 1396r(h)(2)) is amended--
                                (i) in subparagraph (A)(ii), by striking
                            the first sentence and inserting the following:
                            ``A civil money penalty in accordance with
                            subparagraph (G).''; and
                                (ii) by adding at the end the following new
                            subparagraph:
                        ``(G) Civil money penalties.--
                                ``(i) In general.--The State may impose a
                            civil money penalty under subparagraph (A)(ii)
                            in the applicable per instance or per day
                            amount (as defined in subclause (II) and (III))
                            for each day or instance, respectively, of
                            noncompliance (as determined appropriate by the
                            Secretary).
                                ``(ii) Applicable per instance amount.--In
                            this subparagraph, the term `applicable per
                            instance amount' means--
                                        ``(I) in the case where the
                                    deficiency is found to be a direct
                                    proximate cause of death of a resident
                                    of the facility, an amount not to
                                    exceed $100,000.
                                        ``(II) in each case of a deficiency
                                    where the facility is cited for actual
                                    harm or immediate jeopardy, an amount
                                    not less than $3,050 and not more than
                                    $25,000; and
                                        ``(III) in each case of any other
                                    deficiency, an amount not less than
                                    $250 and not to exceed $3050.
                                ``(iii) Applicable per day amount.--In this
                            subparagraph, the term `applicable per day
                            amount' means--
                                        ``(I) in each case of a deficiency
                                    where the facility is cited for actual
                                    harm or immediate jeopardy, an amount
                                    not less than $3,050 and not more than
                                    $25,000 and
                                        ``(II) in each case of any other
                                    deficiency, an amount not less than
                                    $250 and not to exceed $3,050.
                                ``(iv) Reduction of civil money penalties
                            in certain circumstances.--Subject to clauses
                            (v) and (vi), in the case where a facility
                            self-reports and promptly corrects a deficiency
                            for which a penalty was imposed under
                            subparagraph (A)(ii) not later than 10 calendar
                            days after the date of such imposition, the
                            State may reduce the amount of the penalty
                            imposed by not more than 50 percent.
                                ``(v) Prohibition on reduction for certain
                            deficiencies.--
                                        ``(I) Repeat deficiencies.--The
                                    State may not reduce under clause (iv)
                                    the amount of a penalty if the State
                                    had reduced a penalty imposed on the
                                    facility in the preceding year under
                                    such clause with respect to a repeat
                                    deficiency.
                                        ``(II) Certain other
                                    deficiencies.--The State may not reduce
                                    under clause (iv) the amount of a
                                    penalty if the penalty is imposed for a
                                    deficiency described in clause (ii)(II)
                                    or (iii)(I) and the actual harm or
                                    widespread harm that immediately
                                    jeopardizes the health or safety of a
                                    resident or residents of the facility,
                                    or if the penalty is imposed for a
                                    deficiency described in clause (ii)(I).
                                        ``(III) Limitation on aggregate
                                    reductions.--The aggregate reduction in
                                    a penalty under clause (iv) may not
                                    exceed 35 percent on the basis of self-
                                    reporting, on the basis of a waiver or
                                    an appeal (as provided for under
                                    regulations under section 488.436 of
                                    title 42, Code of Federal Regulations),
                                    or on the basis of both.
                                ``(vi) Collection of civil money
                            penalties.--In the case of a civil money
                            penalty imposed under subparagraph (A)(ii), the
                            State--
                                        ``(I) subject to subclause (III),
                                    shall, not later than 30 days after the
                                    date of imposition of the penalty,
                                    provide the opportunity for the
                                    facility to participate in an
                                    independent informal dispute resolution
                                    process which generates a written
                                    record prior to the collection of such
                                    penalty, but such opportunity shall not
                                    affect the responsibility of the State
                                    survey agency for making final
                                    recommendations for such penalties;
                                        ``(II) in the case where the
                                    penalty is imposed for each day of
                                    noncompliance, shall not impose a
                                    penalty for any day during the period
                                    beginning on the initial day of the
                                    imposition of the penalty and ending on
                                    the day on which the informal dispute
                                    resolution process under subclause (I)
                                    is completed;
                                        ``(III) may provide for the
                                    collection of such civil money penalty
                                    and the placement of such amounts
                                    collected in an escrow account under
                                    the direction of the State on the
                                    earlier of the date on which the
                                    informal dispute resolution process
                                    under subclause (I) is completed or the
                                    date that is 90 days after the date of
                                    the imposition of the penalty;
                                        ``(IV) may provide that such
                                    amounts collected are kept in such
                                    account pending the resolution of any
                                    subsequent appeals;
                                        ``(V) in the case where the
                                    facility successfully appeals the
                                    penalty, may provide for the return of
                                    such amounts collected (plus interest)
                                    to the facility; and
                                        ``(VI) in the case where all such
                                    appeals are unsuccessful, may provide
                                    that such funds collected shall be used
                                    for the purposes described in the
                                    second sentence of subparagraph
                                    (A)(ii).''.
                        (B) Conforming amendment.--The second sentence of
                    section 1919(h)(2)(A)(ii) of the Social Security Act
                    (42 U.S.C. 1396r(h)(2)(A)(ii)) is amended by inserting
                    before the period at the end the following: ``, and
                    some portion of such funds may be used to support
                    activities that benefit residents, including assistance
                    to support and protect residents of a facility that
                    closes (voluntarily or involuntarily) or is decertified
                    (including offsetting costs of relocating residents to
                    home and community-based settings or another facility),
                    projects that support resident and family councils and
                    other consumer involvement in assuring quality care in
                    facilities, and facility improvement initiatives
                    approved by the Secretary (including joint training of
                    facility staff and surveyors, providing technical
                    assistance to facilities under quality assurance
                    programs, the appointment of temporary management, and
                    other activities approved by the Secretary)''.
                (2) Penalties imposed by the secretary.--
                        (A) In general.--Section 1919(h)(3)(C)(ii) of the
                    Social Security Act (42 U.S.C. 1396r(h)(3)(C)) is
                    amended to read as follows:
                                ``(ii) Authority with respect to civil
                            money penalties.--
                                        ``(I) Amount.--Subject to subclause
                                    (II), the Secretary may impose a civil
                                    money penalty in an amount not to
                                    exceed $10,000 for each day or each
                                    instance of noncompliance (as
                                    determined appropriate by the
                                    Secretary).
                                        ``(II) Reduction of civil money
                                    penalties in certain circumstances.--
                                    Subject to subclause (III), in the case
                                    where a facility self-reports and
                                    promptly corrects a deficiency for
                                    which a penalty was imposed under this
                                    clause not later than 10 calendar days
                                    after the date of such imposition, the
                                    Secretary may reduce the amount of the
                                    penalty imposed by not more than 50
                                    percent.
                                        ``(III) Prohibition on reduction
                                    for repeat deficiencies.--The Secretary
                                    may not reduce the amount of a penalty
                                    under subclause (II) if the Secretary
                                    had reduced a penalty imposed on the
                                    facility in the preceding year under
                                    such subclause with respect to a repeat
                                    deficiency.
                                        ``(IV) Collection of civil money
                                    penalties.--In the case of a civil
                                    money penalty imposed under this
                                    clause, the Secretary--
                                                ``(aa) subject to item
                                            (bb), shall, not later than 30
                                            days after the date of
                                            imposition of the penalty,
                                            provide the opportunity for the
                                            facility to participate in an
                                            independent informal dispute
                                            resolution process which
                                            generates a written record
                                            prior to the collection of such
                                            penalty;
                                                ``(bb) in the case where
                                            the penalty is imposed for each
                                            day of noncompliance, shall not
                                            impose a penalty for any day
                                            during the period beginning on
                                            the initial day of the
                                            imposition of the penalty and
                                            ending on the day on which the
                                            informal dispute resolution
                                            process under item (aa) is
                                            completed;
                                                ``(cc) may provide for the
                                            collection of such civil money
                                            penalty and the placement of
                                            such amounts collected in an
                                            escrow account under the
                                            direction of the Secretary on
                                            the earlier of the date on
                                            which the informal dispute
                                            resolution process under item
                                            (aa) is completed or the date
                                            that is 90 days after the date
                                            of the imposition of the
                                            penalty;
                                                ``(dd) may provide that
                                            such amounts collected are kept
                                            in such account pending the
                                            resolution of any subsequent
                                            appeals;
                                                ``(ee) in the case where
                                            the facility successfully
                                            appeals the penalty, may
                                            provide for the return of such
                                            amounts collected (plus
                                            interest) to the facility; and
                                                ``(ff) in the case where
                                            all such appeals are
                                            unsuccessful, may provide that
                                            some portion of such amounts
                                            collected may be used to
                                            support activities that benefit
                                            residents, including assistance
                                            to support and protect
                                            residents of a facility that
                                            closes (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of relocating
                                            residents to home and
                                            community-based settings or
                                            another facility), projects
                                            that support resident and
                                            family councils and other
                                            consumer involvement in
                                            assuring quality care in
                                            facilities, and facility
                                            improvement initiatives
                                            approved by the Secretary
                                            (including joint training of
                                            facility staff and surveyors,
                                            technical assistance for
                                            facilities under quality
                                            assurance programs, the
                                            appointment of temporary
                                            management, and other
                                            activities approved by the
                                            Secretary).
                                        ``(V) Procedure.--The provisions of
                                    section 1128A (other than subsections
                                    (a) and (b) and except to the extent
                                    that such provisions require a hearing
                                    prior to the imposition of a civil
                                    money penalty) shall apply to a civil
                                    money penalty under this clause in the
                                    same manner as such provisions apply to
                                    a penalty or proceeding under section
                                    1128A(a).''.
                        (B) Conforming amendment.--Section 1919(h)(8) of
                    the Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is
                    amended by inserting ``and in paragraph (3)(C)(ii)''
                    after ``paragraph (2)(A)''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

        (a) Establishment.--
                (1) In general.--The Secretary, in consultation with the
            Inspector General of the Department of Health and Human
            Services, shall establish a pilot program (in this section
            referred to as the ``pilot program'') to develop, test, and
            implement use of an independent monitor to oversee interstate
            and large intrastate chains of skilled nursing facilities and
            nursing facilities.
                (2) Selection.--The Secretary shall select chains of
            skilled nursing facilities and nursing facilities described in
            paragraph (1) to participate in the pilot program from among
            those chains that submit an application to the Secretary at
            such time, in such manner, and containing such information as
            the Secretary may require.
                (3) Duration.--The Secretary shall conduct the pilot
            program for a two-year period.
                (4) Implementation.--The Secretary shall implement the
            pilot program not later than one year after the date of the
            enactment of this Act.
        (b) Requirements.--The Secretary shall evaluate chains selected to
    participate in the pilot program based on criteria selected by the
    Secretary, including where evidence suggests that one or more
    facilities of the chain are experiencing serious safety and quality of
    care problems. Such criteria may include the evaluation of a chain that
    includes one or more facilities participating in the ``Special Focus
    Facility'' program (or a successor program) or one or more facilities
    with a record of repeated serious safety and quality of care
    deficiencies.
        (c) Responsibilities of the Independent Monitor.--An independent
    monitor that enters into a contract with the Secretary to participate
    in the conduct of such program shall--
                (1) conduct periodic reviews and prepare root-cause quality
            and deficiency analyses of a chain to assess if facilities of
            the chain are in compliance with State and Federal laws and
            regulations applicable to the facilities;
                (2) undertake sustained oversight of the chain, whether
            publicly or privately held, to involve the owners of the chain
            and the principal business partners of such owners in
            facilitating compliance by facilities of the chain with State
            and Federal laws and regulations applicable to the facilities;
                (3) analyze the management structure, distribution of
            expenditures, and nurse staffing levels of facilities of the
            chain in relation to resident census, staff turnover rates, and
            tenure;
                (4) report findings and recommendations with respect to
            such reviews, analyses, and oversight to the chain and
            facilities of the chain, to the Secretary and to relevant
            States; and
                (5) publish the results of such reviews, analyses, and
            oversight.
        (d) Implementation of Recommendations.--
                (1) Receipt of finding by chain.--Not later than 10 days
            after receipt of a finding of an independent monitor under
            subsection (c)(4), a chain participating in the pilot program
            shall submit to the independent monitor a report--
                        (A) outlining corrective actions the chain will
                    take to implement the recommendations in such report;
                    or
                        (B) indicating that the chain will not implement
                    such recommendations and why it will not do so.
                (2) Receipt of report by independent monitor.--Not later
            than 10 days after the date of receipt of a report submitted by
            a chain under paragraph (1), an independent monitor shall
            finalize its recommendations and submit a report to the chain
            and facilities of the chain, the Secretary, and the State (or
            States) involved, as appropriate, containing such final
            recommendations.
        (e) Cost of Appointment.--A chain shall be responsible for a
    portion of the costs associated with the appointment of independent
    monitors under the pilot program. The chain shall pay such portion to
    the Secretary (in an amount and in accordance with procedures
    established by the Secretary).
        (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et
    seq.; 1396 et seq.) as may be necessary for the purpose of carrying out
    the pilot program.
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.
        (h) Definitions.--In this section:
                (1) Facility.--The term ``facility'' means a skilled
            nursing facility or a nursing facility.
                (2) Nursing facility.--The term ``nursing facility'' has
            the meaning given such term in section 1919(a) of the Social
            Security Act (42 U.S.C. 1396r(a)).
                (3) Secretary.--The term ``Secretary'' means the Secretary
            of Health and Human Services, acting through the Assistant
            Secretary for Planning and Evaluation.
                (4) Skilled nursing facility.--The term ``skilled nursing
            facility'' has the meaning given such term in section 1819(a)
            of the Social Security Act (42 U.S.C. 1395(a)).
        (i) Evaluation and Report.--
                (1) Evaluation.--The Inspector General of the Department of
            Health and Human Services shall evaluate the pilot program.
            Such evaluation shall--
                        (A) determine whether the independent monitor
                    program should be established on a permanent basis; and
                        (B) if the Inspector General determines that the
                    independent monitor program should be established on a
                    permanent basis, recommend appropriate procedures and
                    mechanisms for such establishment.
                (2) Report.--Not later than 180 days after the completion
            of the pilot program, the Inspector General shall submit to
            Congress and the Secretary a report containing the results of
            the evaluation conducted under paragraph (1), together with
            recommendations for such legislation and administrative action
            as the Inspector General determines appropriate.

    SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819(c) of the Social Security Act
            (42 U.S.C. 1395i-3(c)) is amended by adding at the end the
            following new paragraph:
                ``(7) Notification of facility closure.--
                        ``(A) In general.--Any individual who is the
                    administrator of a skilled nursing facility must--
                                ``(i) submit to the Secretary, the State
                            long-term care ombudsman, residents of the
                            facility, and the legal representatives of such
                            residents or other responsible parties, written
                            notification of an impending closure--
                                        ``(I) subject to subclause (II),
                                    not later than the date that is 60 days
                                    prior to the date of such closure; and
                                        ``(II) in the case of a facility
                                    where the Secretary terminates the
                                    facility's participation under this
                                    title, not later than the date that the
                                    Secretary determines appropriate;
                                ``(ii) ensure that the facility does not
                            admit any new residents on or after the date on
                            which such written notification is submitted;
                            and
                                ``(iii) include in the notice a plan for
                            the transfer and adequate relocation of the
                            residents of the facility by a specified date
                            prior to closure that has been approved by the
                            State, including assurances that the residents
                            will be transferred to the most appropriate
                            facility or other setting in terms of quality,
                            services, and location, taking into
                            consideration the needs and best interests of
                            each resident.
                        ``(B) Relocation.--
                                ``(i) In general.--The State shall ensure
                            that, before a facility closes, all residents
                            of the facility have been successfully
                            relocated to another facility or an alternative
                            home and community-based setting.
                                ``(ii) Continuation of payments until
                            residents relocated.--The Secretary may, as the
                            Secretary determines appropriate, continue to
                            make payments under this title with respect to
                            residents of a facility that has submitted a
                            notification under subparagraph (A) during the
                            period beginning on the date such notification
                            is submitted and ending on the date on which
                            the resident is successfully relocated.''.
                (2) Conforming amendments.--Section 1819(h)(4) of the
            Social Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
                        (A) in the first sentence, by striking ``the
                    Secretary shall terminate'' and inserting ``the
                    Secretary, subject to subsection (c)(7), shall
                    terminate''; and
                        (B) in the second sentence, by striking
                    ``subsection (c)(2)'' and inserting ``paragraphs (2)
                    and (7) of subsection (c)''.
        (b) Nursing Facilities.--
                (1) In general.--Section 1919(c) of the Social Security Act
            (42 U.S.C. 1396r(c)) is amended by adding at the end the
            following new paragraph:
                ``(9) Notification of facility closure.--
                        ``(A) In general.--Any individual who is an
                    administrator of a nursing facility must--
                                ``(i) submit to the Secretary, the State
                            long-term care ombudsman, residents of the
                            facility, and the legal representatives of such
                            residents or other responsible parties, written
                            notification of an impending closure--
                                        ``(I) subject to subclause (II),
                                    not later than the date that is 60 days
                                    prior to the date of such closure; and
                                        ``(II) in the case of a facility
                                    where the Secretary terminates the
                                    facility's participation under this
                                    title, not later than the date that the
                                    Secretary determines appropriate;
                                ``(ii) ensure that the facility does not
                            admit any new residents on or after the date on
                            which such written notification is submitted;
                            and
                                ``(iii) include in the notice a plan for
                            the transfer and adequate relocation of the
                            residents of the facility by a specified date
                            prior to closure that has been approved by the
                            State, including assurances that the residents
                            will be transferred to the most appropriate
                            facility or other setting in terms of quality,
                            services, and location, taking into
                            consideration the needs and best interests of
                            each resident.
                        ``(B) Relocation.--
                                ``(i) In general.--The State shall ensure
                            that, before a facility closes, all residents
                            of the facility have been successfully
                            relocated to another facility or an alternative
                            home and community-based setting.
                                ``(ii) Continuation of payments until
                            residents relocated.--The Secretary may, as the
                            Secretary determines appropriate, continue to
                            make payments under this title with respect to
                            residents of a facility that has submitted a
                            notification under subparagraph (A) during the
                            period beginning on the date such notification
                            is submitted and ending on the date on which
                            the resident is successfully relocated.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

                        PART 3--IMPROVING STAFF TRAINING

    SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

        (a) Skilled Nursing Facilities.--Section 1819(f)(2)(A)(i)(I) of the
    Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by
    inserting ``(including, in the case of initial training and, if the
    Secretary determines appropriate, in the case of ongoing training,
    dementia management training and resident abuse prevention training)''
    after ``curriculum''.
        (b) Nursing Facilities.--Section 1919(f)(2)(A)(i)(I) of the Social
    Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by inserting
    ``(including, in the case of initial training and, if the Secretary
    determines appropriate, in the case of ongoing training, dementia
    management training and resident abuse prevention training)'' after
    ``curriculum''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED FOR CERTIFIED NURSE
                  AIDES AND SUPERVISORY STAFF.

        (a) Study.--
                (1) In general.--The Secretary shall conduct a study on the
            content of training for certified nurse aides and supervisory
            staff of skilled nursing facilities and nursing facilities. The
            study shall include an analysis of the following:
                        (A) Whether the number of initial training hours
                    for certified nurse aides required under sections
                    1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) of the
                    Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(II);
                    1396r(f)(2)(A)(i)(II)) should be increased from 75 and,
                    if so, what the required number of initial training
                    hours should be, including any recommendations for the
                    content of such training (including training related to
                    dementia).
                        (B) Whether requirements for ongoing training under
                    such sections 1819(f)(2)(A)(i)(II) and
                    1919(f)(2)(A)(i)(II) should be increased from 12 hours
                    per year, including any recommendations for the content
                    of such training.
                (2) Consultation.--In conducting the analysis under
            paragraph (1)(A), the Secretary shall consult with States that,
            as of the date of the enactment of this Act, require more than
            75 hours of training for certified nurse aides.
                (3) Definitions.--In this section:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services, acting through
                    the Assistant Secretary for Planning and Evaluation.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395(a)).
        (b) Report.--Not later than 2 years after the date of the enactment
    of this Act, the Secretary shall submit to Congress a report containing
    the results of the study conducted under subsection (a), together with
    recommendations for such legislation and administrative action as the
    Secretary determines appropriate.

                        Subtitle C--Quality Measurements

    SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR QUALITY
                  IMPROVEMENT.

        Title XI of the Social Security Act, as amended by section 1401(a),
    is further amended by adding at the end the following new part:

                         ``Part E--Quality Improvement

       ``establishment of national priorities for performance improvement

        ``Sec. 1191.  (a) Establishment of National Priorities by the
    Secretary.--The Secretary shall establish and periodically update, not
    less frequently than triennially, national priorities for performance
    improvement.
        ``(b) Recommendations for National Priorities.--In establishing and
    updating national priorities under subsection (a), the Secretary shall
    solicit and consider recommendations from multiple outside
    stakeholders.
        ``(c) Considerations in Setting National Priorities.--With respect
    to such priorities, the Secretary shall ensure that priority is given
    to areas in the delivery of health care services in the United States
    that--
                ``(1) contribute to a large burden of disease, including
            those that address the health care provided to patients with
            prevalent, high-cost chronic diseases;
                ``(2) have the greatest potential to decrease morbidity and
            mortality in this country, including those that are designed to
            eliminate harm to patients;
                ``(3) have the greatest potential for improving the
            performance, affordability, and patient-centeredness of health
            care, including those due to variations in care;
                ``(4) address health disparities across groups and areas;
            and
                ``(5) have the potential for rapid improvement due to
            existing evidence, standards of care or other reasons.
        ``(d) Definitions.--In this part:
                ``(1) Consensus-based entity.--The term `consensus-based
            entity' means an entity with a contract with the Secretary
            under section 1890.
                ``(2) Quality measure.--The term `quality measure' means a
            national consensus standard for measuring the performance and
            improvement of population health, or of institutional providers
            of services, physicians, and other health care practitioners in
            the delivery of health care services.
        ``(e) Funding.--
                ``(1) In general.--The Secretary shall provide for the
            transfer, from the Federal Hospital Insurance Trust Fund under
            section 1817 and the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 (in such proportion as the
            Secretary determines appropriate), of $2,000,000, for the
            activities under this section for each of the fiscal years 2010
            through 2014.
                ``(2) Authorization of appropriations.--For purposes of
            carrying out the provisions of this section, in addition to
            funds otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services $2,000,000 for each of the fiscal
            years 2010 through 2014.''.

    SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; GAO EVALUATION OF DATA
                  COLLECTION PROCESS FOR QUALITY MEASUREMENT.

        Part E of title XI of the Social Security Act, as added by section
    1441, is amended by adding at the end the following new sections:

    ``SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.

        ``(a) Agreements With Qualified Entities.--
                ``(1) In general.--The Secretary shall enter into
            agreements with qualified entities to develop quality measures
            for the delivery of health care services in the United States.
                ``(2) Form of agreements.--The Secretary may carry out
            paragraph (1) by contract, grant, or otherwise.
                ``(3) Recommendations of consensus-based entity.--In
            carrying out this section, the Secretary shall--
                        ``(A) seek public input; and
                        ``(B) take into consideration recommendations of
                    the consensus-based entity with a contract with the
                    Secretary under section 1890(a).
        ``(b) Determination of Areas Where Quality Measures Are Required.--
    Consistent with the national priorities established under this part and
    with the programs administered by the Centers for Medicare & Medicaid
    Services and in consultation with other relevant Federal agencies, the
    Secretary shall determine areas in which quality measures for assessing
    health care services in the United States are needed.
        ``(c) Development of Quality Measures.--
                ``(1) Patient-centered and population-based measures.--
            Quality measures developed under agreements under subsection
            (a) shall be designed--
                        ``(A) to assess outcomes and functional status of
                    patients;
                        ``(B) to assess the continuity and coordination of
                    care and care transitions for patients across providers
                    and health care settings, including end of life care;
                        ``(C) to assess patient experience and patient
                    engagement;
                        ``(D) to assess the safety, effectiveness, and
                    timeliness of care;
                        ``(E) to assess health disparities including those
                    associated with individual race, ethnicity, age,
                    gender, place of residence or language;
                        ``(F) to assess the efficiency and resource use in
                    the provision of care;
                        ``(G) to the extent feasible, to be collected as
                    part of health information technologies supporting
                    better delivery of health care services;
                        ``(H) to be available free of charge to users for
                    the use of such measures; and
                        ``(I) to assess delivery of health care services to
                    individuals regardless of age.
                ``(2) Availability of measures.--The Secretary shall make
            quality measures developed under this section available to the
            public.
                ``(3) Testing of proposed measures.--The Secretary may use
            amounts made available under subsection (f) to fund the testing
            of proposed quality measures by qualified entities. Testing
            funded under this paragraph shall include testing of the
            feasibility and usability of proposed measures.
                ``(4) Updating of endorsed measures.--The Secretary may use
            amounts made available under subsection (f) to fund the
            updating (and testing, if applicable) by consensus-based
            entities of quality measures that have been previously endorsed
            by such an entity as new evidence is developed, in a manner
            consistent with section 1890(b)(3).
        ``(d) Qualified Entities.--Before entering into agreements with a
    qualified entity, the Secretary shall ensure that the entity is a
    public, nonprofit or academic institution with technical expertise in
    the area of health quality measurement.
        ``(e) Application for Grant.--A grant may be made under this
    section only if an application for the grant is submitted to the
    Secretary and the application is in such form, is made in such manner,
    and contains such agreements, assurances, and information as the
    Secretary determines to be necessary to carry out this section.
        ``(f) Funding.--
                ``(1) In general.--The Secretary shall provide for the
            transfer, from the Federal Hospital Insurance Trust Fund under
            section 1817 and the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 (in such proportion as the
            Secretary determines appropriate), of $25,000,000, to the
            Secretary for purposes of carrying out this section for each of
            the fiscal years 2010 through 2014.
                ``(2) Authorization of appropriations.--For purposes of
            carrying out the provisions of this section, in addition to
            funds otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services $25,000,000 for each of the fiscal
            years 2010 through 2014.

    ``SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROCESS FOR QUALITY
                  MEASUREMENT.

        ``(a) GAO Evaluations.--The Comptroller General of the United
    States shall conduct periodic evaluations of the implementation of the
    data collection processes for quality measures used by the Secretary.
        ``(b) Considerations.--In carrying out the evaluation under
    subsection (a), the Comptroller General shall determine--
                ``(1) whether the system for the collection of data for
            quality measures provides for validation of data as relevant
            and scientifically credible;
                ``(2) whether data collection efforts under the system use
            the most efficient and cost-effective means in a manner that
            minimizes administrative burden on persons required to collect
            data and that adequately protects the privacy of patients'
            personal health information and provides data security;
                ``(3) whether standards under the system provide for an
            appropriate opportunity for physicians and other clinicians and
            institutional providers of services to review and correct
            findings; and
                ``(4) the extent to which quality measures are consistent
            with section 1192(c)(1) or result in direct or indirect costs
            to users of such measures.
        ``(c) Report.--The Comptroller General shall submit reports to
    Congress and to the Secretary containing a description of the findings
    and conclusions of the results of each such evaluation.''.

    SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT INTO SELECTION OF
                  QUALITY MEASURES.

        Section 1808 of the Social Security Act (42 U.S.C. 1395b-9) is
    amended by adding at the end the following new subsection:
        ``(d) Multi-stakeholder Pre-rulemaking Input Into Selection of
    Quality Measures.--
                ``(1) List of measures.--Not later than December 1 before
            each year (beginning with 2011), the Secretary shall make
            public a list of measures being considered for selection for
            quality measurement by the Secretary in rulemaking with respect
            to payment systems under this title beginning in the payment
            year beginning in such year and for payment systems beginning
            in the calendar year following such year, as the case may be.
                ``(2) Consultation on selection of endorsed quality
            measures.--A consensus-based entity that has entered into a
            contract under section 1890 shall, as part of such contract,
            convene multi-stakeholder groups to provide recommendations on
            the selection of individual or composite quality measures, for
            use in reporting performance information to the public or for
            use in public health care programs.
                ``(3) Multi-stakeholder input.--Not later than February 1
            of each year (beginning with 2011), the consensus-based entity
            described in paragraph (2) shall transmit to the Secretary the
            recommendations of multi-stakeholder groups provided under
            paragraph (2). Such recommendations shall be included in the
            transmissions the consensus-based entity makes to the Secretary
            under the contract provided for under section 1890.
                ``(4) Requirement for transparency in process.--
                        ``(A) In general.--In convening multi-stakeholder
                    groups under paragraph (2) with respect to the
                    selection of quality measures, the consensus-based
                    entity described in such paragraph shall provide for an
                    open and transparent process for the activities
                    conducted pursuant to such convening.
                        ``(B) Selection of organizations participating in
                    multi-stakeholder groups.--The process under paragraph
                    (2) shall ensure that the selection of representatives
                    of multi-stakeholder groups includes provision for
                    public nominations for, and the opportunity for public
                    comment on, such selection.
                ``(5) Use of input.--The respective proposed rule shall
            contain a summary of the recommendations made by the multi-
            stakeholder groups under paragraph (2), as well as other
            comments received regarding the proposed measures, and the
            extent to which such proposed rule follows such recommendations
            and the rationale for not following such recommendations.
                ``(6) Multi-stakeholder groups.--For purposes of this
            subsection, the term `multi-stakeholder groups' means, with
            respect to a quality measure, a voluntary collaborative of
            organizations representing persons interested in or affected by
            the use of such quality measure, such as the following:
                        ``(A) Hospitals and other institutional providers.
                        ``(B) Physicians.
                        ``(C) Health care quality alliances.
                        ``(D) Nurses and other health care practitioners.
                        ``(E) Health plans.
                        ``(F) Patient advocates and consumer groups.
                        ``(G) Employers.
                        ``(H) Public and private purchasers of health care
                    items and services.
                        ``(I) Labor organizations.
                        ``(J) Relevant departments or agencies of the
                    United States.
                        ``(K) Biopharmaceutical companies and manufacturers
                    of medical devices.
                        ``(L) Licensing, credentialing, and accrediting
                    bodies.
                ``(7) Funding.--
                        ``(A) In general.--The Secretary shall provide for
                    the transfer, from the Federal Hospital Insurance Trust
                    Fund under section 1817 and the Federal Supplementary
                    Medical Insurance Trust Fund under section 1841 (in
                    such proportion as the Secretary determines
                    appropriate), of $1,000,000, to the Secretary for
                    purposes of carrying out this subsection for each of
                    the fiscal years 2010 through 2014.
                        ``(B) Authorization of appropriations.--For
                    purposes of carrying out the provisions of this
                    subsection, in addition to funds otherwise available,
                    out of any funds in the Treasury not otherwise
                    appropriated, there are appropriated to the Secretary
                    of Health and Human Services $1,000,000 for each of the
                    fiscal years 2010 through 2014.''.

    SEC. 1444. APPLICATION OF QUALITY MEASURES.

        (a) Inpatient Hospital Services.--Section 1886(b)(3)(B) of such Act
    (42 U.S.C. 1395ww(b)(3)(B)) is amended by adding at the end the
    following new clause:
        ``(x)(I) Subject to subclause (II), for purposes of reporting data
    on quality measures for inpatient hospital services furnished during
    fiscal year 2012 and each subsequent fiscal year, the quality measures
    specified under clause (viii) shall be measures selected by the
    Secretary from measures that have been endorsed by the entity with a
    contract with the Secretary under section 1890(a).
        ``(II) In the case of a specified area or medical topic determined
    appropriate by the Secretary for which a feasible and practical quality
    measure has not been endorsed by the entity with a contract under
    section 1890(a), the Secretary may specify a measure that is not so
    endorsed as long as due consideration is given to measures that have
    been endorsed or adopted by a consensus organization identified by the
    Secretary. The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (b) Outpatient Hospital Services.--Section 1833(t)(17) of such Act
    (42 U.S.C. 1395l(t)(17)) is amended by adding at the end the following
    new subparagraph:
                        ``(F) Use of endorsed quality measures.--The
                    provisions of clause (x) of section 1886(b)(3)(C) shall
                    apply to quality measures for covered OPD services
                    under this paragraph in the same manner as such
                    provisions apply to quality measures for inpatient
                    hospital services.''.
        (c) Physicians' Services.--Section 1848(k)(2)(C)(ii) of such Act
    (42 U.S.C. 1395w-4(k)(2)(C)(ii)) is amended by adding at the end the
    following: ``The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (d) Renal Dialysis Services.--Section 1881(h)(2)(B)(ii) of such Act
    (42 U.S.C. 1395rr(h)(2)(B)(ii)) is amended by adding at the end the
    following: ``The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (e) Endorsement of Standards.--Section 1890(b)(2) of the Social
    Security Act (42 U.S.C. 1395aaa(b)(2)) is amended by adding after and
    below subparagraph (B) the following:
            ``If the entity does not endorse a measure, such entity shall
            explain the reasons and provide suggestions about changes to
            such measure that might make it a potentially endorsable
            measure.''.
        (f) Effective Date.--Except as otherwise provided, the amendments
    made by this section shall apply to quality measures applied for
    payment years beginning with 2012 or fiscal year 2012, as the case may
    be.

    SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.

        Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d))
    is amended by striking ``for each of fiscal years 2009 through 2012''
    and inserting ``for fiscal year 2009, and $12,000,000 for each of the
    fiscal years 2010 through 2012''

               Subtitle D--Physician Payments Sunshine Provision

    SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BETWEEN MANUFACTURERS AND
                  DISTRIBUTORS OF COVERED DRUGS, DEVICES, BIOLOGICALS, OR
                  MEDICAL SUPPLIES UNDER MEDICARE, MEDICAID, OR CHIP AND
                  PHYSICIANS AND OTHER HEALTH CARE ENTITIES AND BETWEEN
                  PHYSICIANS AND OTHER HEALTH CARE ENTITIES.

        (a) In General.--Part A of title XI of the Social Security Act (42
    U.S.C. 1301 et seq.), as amended by section 1631(a), is further amended
    by inserting after section 1128G the following new section:

    ``SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS' FINANCIAL RELATIONSHIPS
                  WITH MANUFACTURERS AND DISTRIBUTORS OF COVERED DRUGS,
                  DEVICES, BIOLOGICALS, OR MEDICAL SUPPLIES UNDER MEDICARE,
                  MEDICAID, OR CHIP AND WITH ENTITIES THAT BILL FOR
                  SERVICES UNDER MEDICARE.

        ``(a) Reporting of Payments or Other Transfers of Value.--
                ``(1) In general.--Except as provided in this subsection,
            not later than March 31, 2011 and annually thereafter, each
            applicable manufacturer or distributor that provides a payment
            or other transfer of value to a covered recipient, or to an
            entity or individual at the request of or designated on behalf
            of a covered recipient, shall submit to the Secretary, in such
            electronic form as the Secretary shall require, the following
            information with respect to the preceding calendar year:
                        ``(A) With respect to the covered recipient, the
                    recipient's name, business address, physician
                    specialty, and national provider identifier.
                        ``(B) With respect to the payment or other transfer
                    of value, other than a drug sample--
                                ``(i) its value and date;
                                ``(ii) the name of the related drug,
                            device, or supply, if available; and
                                ``(iii) a description of its form,
                            indicated (as appropriate for all that apply)
                            as--
                                        ``(I) cash or a cash equivalent;
                                        ``(II) in-kind items or services;
                                        ``(III) stock, a stock option, or
                                    any other ownership interest, dividend,
                                    profit, or other return on investment;
                                    or
                                        ``(IV) any other form (as defined
                                    by the Secretary).
                        ``(C) With respect to a drug sample, the name,
                    number, date, and dosage units of the sample.
                ``(2) Aggregate reporting.--Information submitted by an
            applicable manufacturer or distributor under paragraph (1)
            shall include the aggregate amount of all payments or other
            transfers of value provided by the manufacturer or distributor
            to covered recipients (and to entities or individuals at the
            request of or designated on behalf of a covered recipient)
            during the year involved, including all payments and transfers
            of value regardless of whether such payments or transfer of
            value were individually disclosed.
                ``(3) Special rule for certain payments or other transfers
            of value.--In the case where an applicable manufacturer or
            distributor provides a payment or other transfer of value to an
            entity or individual at the request of or designated on behalf
            of a covered recipient, the manufacturer or distributor shall
            disclose that payment or other transfer of value under the name
            of the covered recipient.
                ``(4) Delayed reporting for payments made pursuant to
            product development agreements.--In the case of a payment or
            other transfer of value made to a covered recipient by an
            applicable manufacturer or distributor pursuant to a product
            development agreement for services furnished in connection with
            the development of a new drug, device, biological, or medical
            supply, the applicable manufacturer or distributor may report
            the value and recipient of such payment or other transfer of
            value in the first reporting period under this subsection in
            the next reporting deadline after the earlier of the following:
                        ``(A) The date of the approval or clearance of the
                    covered drug, device, biological, or medical supply by
                    the Food and Drug Administration.
                        ``(B) Two calendar years after the date such
                    payment or other transfer of value was made.
                ``(5) Delayed reporting for payments made pursuant to
            clinical investigations.--In the case of a payment or other
            transfer of value made to a covered recipient by an applicable
            manufacturer or distributor in connection with a clinical
            investigation regarding a new drug, device, biological, or
            medical supply, the applicable manufacturer or distributor may
            report as required under this section in the next reporting
            period under this subsection after the earlier of the
            following:
                        ``(A) The date that the clinical investigation is
                    registered on the website maintained by the National
                    Institutes of Health pursuant to section 671 of the
                    Food and Drug Administration Amendments Act of 2007.
                        ``(B) Two calendar years after the date such
                    payment or other transfer of value was made.
                ``(6) Confidentiality.--Information described in paragraph
            (4) or (5) shall be considered confidential and shall not be
            subject to disclosure under section 552 of title 5, United
            States Code, or any other similar Federal, State, or local law,
            until or after the date on which the information is made
            available to the public under such paragraph.
        ``(b) Reporting of Ownership Interest by Physicians in Hospitals
    and Other Entities That Bill Medicare.--Not later than March 31 of each
    year (beginning with 2011), each hospital or other health care entity
    (not including a Medicare Advantage organization) that bills the
    Secretary under part A or part B of title XVIII for services shall
    report on the ownership shares (other than ownership shares described
    in section 1877(c)) of each physician who, directly or indirectly, owns
    an interest in the entity. In this subsection, the term `physician'
    includes a physician's immediate family members (as defined for
    purposes of section 1877(a)).
        ``(c) Public Availability.--
                ``(1) In general.--The Secretary shall establish procedures
            to ensure that, not later than September 30, 2011, and on June
            30 of each year beginning thereafter, the information submitted
            under subsections (a) and (b), other than information regard
            drug samples, with respect to the preceding calendar year is
            made available through an Internet website that--
                        ``(A) is searchable and is in a format that is
                    clear and understandable;
                        ``(B) contains information that is presented by the
                    name of the applicable manufacturer or distributor, the
                    name of the covered recipient, the business address of
                    the covered recipient, the specialty (if applicable) of
                    the covered recipient, the value of the payment or
                    other transfer of value, the date on which the payment
                    or other transfer of value was provided to the covered
                    recipient, the form of the payment or other transfer of
                    value, indicated (as appropriate) under subsection
                    (a)(1)(B)(ii), the nature of the payment or other
                    transfer of value, indicated (as appropriate) under
                    subsection (a)(1)(B)(iii), and the name of the covered
                    drug, device, biological, or medical supply, as
                    applicable;
                        ``(C) contains information that is able to be
                    easily aggregated and downloaded;
                        ``(D) contains a description of any enforcement
                    actions taken to carry out this section, including any
                    penalties imposed under subsection (d), during the
                    preceding year;
                        ``(E) contains background information on industry-
                    physician relationships;
                        ``(F) in the case of information submitted with
                    respect to a payment or other transfer of value
                    described in subsection (a)(5), lists such information
                    separately from the other information submitted under
                    subsection (a) and designates such separately listed
                    information as funding for clinical research;
                        ``(G) contains any other information the Secretary
                    determines would be helpful to the average consumer;
                    and
                        ``(H) provides the covered recipient an opportunity
                    to submit corrections to the information made available
                    to the public with respect to the covered recipient.
                ``(2) Accuracy of reporting.--The accuracy of the
            information that is submitted under subsections (a) and (b) and
            made available under paragraph (1) shall be the responsibility
            of the applicable manufacturer or distributor of a covered
            drug, device, biological, or medical supply reporting under
            subsection (a) or hospital or other health care entity
            reporting physician ownership under subsection (b). The
            Secretary shall establish procedures to ensure that the covered
            recipient is provided with an opportunity to submit corrections
            to the manufacturer, distributor, hospital, or other entity
            reporting under subsection (a) or (b) with regard to
            information made public with respect to the covered recipient
            and, under such procedures, the corrections shall be
            transmitted to the Secretary.
                ``(3) Special rule for drug samples.--Information relating
            to drug samples provided under subsection (a) shall not be made
            available to the public by the Secretary but may be made
            available outside the Department of Health and Human Services
            by the Secretary for research or legitimate business purposes
            pursuant to data use agreements.
                ``(4) Special rule for national provider identifiers.--
            Information relating to national provider identifiers provided
            under subsection (a) shall not be made available to the public
            by the Secretary but may be made available outside the
            Department of Health and Human Services by the Secretary for
            research or legitimate business purposes pursuant to data use
            agreements.
        ``(d) Penalties for Noncompliance.--
                ``(1) Failure to report.--
                        ``(A) In general.--Subject to subparagraph (B),
                    except as provided in paragraph (2), any applicable
                    manufacturer or distributor that fails to submit
                    information required under subsection (a) in a timely
                    manner in accordance with regulations promulgated to
                    carry out such subsection, and any hospital or other
                    entity that fails to submit information required under
                    subsection (b) in a timely manner in accordance with
                    regulations promulgated to carry out such subsection
                    shall be subject to a civil money penalty of not less
                    than $1,000, but not more than $10,000, for each
                    payment or other transfer of value or ownership or
                    investment interest not reported as required under such
                    subsection. Such penalty shall be imposed and collected
                    in the same manner as civil money penalties under
                    subsection (a) of section 1128A are imposed and
                    collected under that section.
                        ``(B) Limitation.--The total amount of civil money
                    penalties imposed under subparagraph (A) with respect
                    to each annual submission of information under
                    subsection (a) by an applicable manufacturer or
                    distributor or other entity shall not exceed $150,000.
                ``(2) Knowing failure to report.--
                        ``(A) In general.--Subject to subparagraph (B), any
                    applicable manufacturer or distributor that knowingly
                    fails to submit information required under subsection
                    (a) in a timely manner in accordance with regulations
                    promulgated to carry out such subsection and any
                    hospital or other entity that fails to submit
                    information required under subsection (b) in a timely
                    manner in accordance with regulations promulgated to
                    carry out such subsection, shall be subject to a civil
                    money penalty of not less than $10,000, but not more
                    than $100,000, for each payment or other transfer of
                    value or ownership or investment interest not reported
                    as required under such subsection. Such penalty shall
                    be imposed and collected in the same manner as civil
                    money penalties under subsection (a) of section 1128A
                    are imposed and collected under that section.
                        ``(B) Limitation.--The total amount of civil money
                    penalties imposed under subparagraph (A) with respect
                    to each annual submission of information under
                    subsection (a) or (b) by an applicable manufacturer,
                    distributor, or entity shall not exceed $1,000,000, or,
                    if greater, 0.1 percentage of the total annual revenues
                    of the manufacturer, distributor, or entity.
                ``(3) Use of funds.--Funds collected by the Secretary as a
            result of the imposition of a civil money penalty under this
            subsection shall be used to carry out this section.
                ``(4) Enforcement through state attorneys general.--The
            attorney general of a State, after providing notice to the
            Secretary of an intent to proceed under this paragraph in a
            specific case and providing the Secretary with an opportunity
            to bring an action under this subsection and the Secretary
            declining such opportunity, may proceed under this subsection
            against a manufacturer or distributor in the State.
        ``(e) Annual Report to Congress.--Not later than April 1 of each
    year beginning with 2011, the Secretary shall submit to Congress a
    report that includes the following:
                ``(1) The information submitted under this section during
            the preceding year, aggregated for each applicable manufacturer
            or distributor of a covered drug, device, biological, or
            medical supply that submitted such information during such
            year.
                ``(2) A description of any enforcement actions taken to
            carry out this section, including any penalties imposed under
            subsection (d), during the preceding year.
        ``(f) Definitions.--In this section:
                ``(1) Applicable manufacturer; applicable distributor.--The
            term `applicable manufacturer' means a manufacturer of a
            covered drug, device, biological, or medical supply, and the
            term `applicable distributor' means a distributor of a covered
            drug, device, or medical supply.
                ``(2) Clinical investigation.--The term `clinical
            investigation' means any experiment involving one or more human
            subjects, or materials derived from human subjects, in which a
            drug or device is administered, dispensed, or used.
                ``(3) Covered drug, device, biological, or medical
            supply.--The term `covered' means, with respect to a drug,
            device, biological, or medical supply, such a drug, device,
            biological, or medical supply for which payment is available
            under title XVIII or a State plan under title XIX or XXI (or a
            waiver of such a plan).
                ``(4) Covered recipient.--The term `covered recipient'
            means the following:
                        ``(A) A physician.
                        ``(B) A physician group practice.
                        ``(C) Any other prescriber of a covered drug,
                    device, biological, or medical supply.
                        ``(D) A pharmacy or pharmacist.
                        ``(E) A health insurance issuer, group health plan,
                    or other entity offering a health benefits plan,
                    including any employee of such an issuer, plan, or
                    entity.
                        ``(F) A pharmacy benefit manager, including any
                    employee of such a manager.
                        ``(G) A hospital.
                        ``(H) A medical school.
                        ``(I) A sponsor of a continuing medical education
                    program.
                        ``(J) A patient advocacy or disease specific group.
                        ``(K) A organization of health care professionals.
                        ``(L) A biomedical researcher.
                        ``(M) A group purchasing organization.
                ``(5) Distributor of a covered drug, device, or medical
            supply.--The term `distributor of a covered drug, device, or
            medical supply' means any entity which is engaged in the
            marketing or distribution of a covered drug, device, or medical
            supply (or any subsidiary of or entity affiliated with such
            entity), but does not include a wholesale pharmaceutical
            distributor.
                ``(6) Employee.--The term `employee' has the meaning given
            such term in section 1877(h)(2).
                ``(7) Knowingly.--The term `knowingly' has the meaning
            given such term in section 3729(b) of title 31, United States
            Code.
                ``(8) Manufacturer of a covered drug, device, biological,
            or medical supply.--The term `manufacturer of a covered drug,
            device, biological, or medical supply' means any entity which
            is engaged in the production, preparation, propagation,
            compounding, conversion, processing, marketing, or distribution
            of a covered drug, device, biological, or medical supply (or
            any subsidiary of or entity affiliated with such entity).
                ``(9) Payment or other transfer of value.--
                        ``(A) In general.--The term `payment or other
                    transfer of value' means a transfer of anything of
                    value for or of any of the following:
                                ``(i) Gift, food, or entertainment.
                                ``(ii) Travel or trip.
                                ``(iii) Honoraria.
                                ``(iv) Research funding or grant.
                                ``(v) Education or conference funding.
                                ``(vi) Consulting fees.
                                ``(vii) Ownership or investment interest
                            and royalties or license fee.
                        ``(B) Inclusions.--Subject to subparagraph (C), the
                    term `payment or other transfer of value' includes any
                    compensation, gift, honorarium, speaking fee,
                    consulting fee, travel, services, dividend, profit
                    distribution, stock or stock option grant, or any
                    ownership or investment interest held by a physician in
                    a manufacturer (excluding a dividend or other profit
                    distribution from, or ownership or investment interest
                    in, a publicly traded security or mutual fund (as
                    described in section 1877(c))).
                        ``(C) Exclusions.--The term `payment or other
                    transfer of value' does not include the following:
                                ``(i) Any payment or other transfer of
                            value provided by an applicable manufacturer or
                            distributor to a covered recipient where the
                            amount transferred to, requested by, or
                            designated on behalf of the covered recipient
                            does not exceed $5.
                                ``(ii) The loan of a covered device for a
                            short-term trial period, not to exceed 90 days,
                            to permit evaluation of the covered device by
                            the covered recipient.
                                ``(iii) Items or services provided under a
                            contractual warranty, including the replacement
                            of a covered device, where the terms of the
                            warranty are set forth in the purchase or lease
                            agreement for the covered device.
                                ``(iv) A transfer of anything of value to a
                            covered recipient when the covered recipient is
                            a patient and not acting in the professional
                            capacity of a covered recipient.
                                ``(v) In-kind items used for the provision
                            of charity care.
                                ``(vi) A dividend or other profit
                            distribution from, or ownership or investment
                            interest in, a publicly traded security and
                            mutual fund (as described in section 1877(c)).
                                ``(vii) Compensation paid by a manufacturer
                            or distributor of a covered drug, device,
                            biological, or medical supply to a covered
                            recipient who is directly employed by and works
                            solely for such manufacturer or distributor.
                                ``(viii) Any discount or cash rebate.
                ``(10) Physician.--The term `physician' has the meaning
            given that term in section 1861(r). For purposes of this
            section, such term does not include a physician who is an
            employee of the applicable manufacturer that is required to
            submit information under subsection (a).
        ``(g) Annual Reports to States.--Not later than April 1 of each
    year beginning with 2011, the Secretary shall submit to States a report
    that includes a summary of the information submitted under subsections
    (a) and (d) during the preceding year with respect to covered
    recipients or other hospitals and entities in the State.
        ``(h) Relation to State Laws.--
                ``(1) In general.--Effective on January 1, 2011, subject to
            paragraph (2), the provisions of this section shall preempt any
            law or regulation of a State or of a political subdivision of a
            State that requires an applicable manufacturer and applicable
            distributor (as such terms are defined in subsection (f)) to
            disclose or report, in any format, the type of information
            (described in subsection (a)) regarding a payment or other
            transfer of value provided by the manufacturer to a covered
            recipient (as so defined).
                ``(2) No preemption of additional requirements.--Paragraph
            (1) shall not preempt any law or regulation of a State or of a
            political subdivision of a State that requires any of the
            following:
                        ``(A) The disclosure or reporting of information
                    not of the type required to be disclosed or reported
                    under this section.
                        ``(B) The disclosure or reporting, in any format,
                    of the type of information required to be disclosed or
                    reported under this section to a Federal, State, or
                    local governmental agency for public health
                    surveillance, investigation, or other public health
                    purposes or health oversight purposes.
                        ``(C) The discovery or admissibility of information
                    described in this section in a criminal, civil, or
                    administrative proceeding.''.
        (b) Availability of Information From the Disclosure of Financial
    Relationship Report (DFRR).--The Secretary of Health and Human Services
    shall submit to Congress a report on the full results of the Disclosure
    of Physician Financial Relationships surveys required pursuant to
    section 5006 of the Deficit Reduction Act of 2005. Such report shall be
    submitted to Congress not later than the date that is 6 months after
    the date such surveys are collected and shall be made publicly
    available on an Internet website of the Department of Health and Human
    Services.

       Subtitle E--Public Reporting on Health Care-Associated Infections

    SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND AMBULATORY
                  SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED INFECTIONS.

        (a) In General.--Title XI of the Social Security Act is amended by
    inserting after section 1138 the following section:

    ``SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND
                  AMBULATORY SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED
                  INFECTIONS.

        ``(a) Reporting Requirement.--
                ``(1) In general.--The Secretary shall provide that a
            hospital (as defined in subsection (g)) or ambulatory surgical
            center meeting the requirements of titles XVIII or XIX may
            participate in the programs established under such titles
            (pursuant to the applicable provisions of law, including
            sections 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in
            accordance with this section, the hospital or center reports
            such information on health care-associated infections that
            develop in the hospital or center (and such demographic
            information associated with such infections) as the Secretary
            specifies.
                ``(2) Reporting protocols.-- Such information shall be
            reported in accordance with reporting protocols established by
            the Secretary through the Director of the Centers for Disease
            Control and Prevention (in this section referred to as the
            `CDC') and to the National Healthcare Safety Network of the CDC
            or under such another reporting system of such Centers as
            determined appropriate by the Secretary in consultation with
            such Director.
                ``(3) Coordination with hit.--The Secretary, through the
            Director of the CDC and the Office of the National Coordinator
            for Health Information Technology, shall ensure that the
            transmission of information under this subsection is
            coordinated with systems established under the HITECH Act,
            where appropriate.
                ``(4) Procedures to ensure the validity of information.--
            The Secretary shall establish procedures regarding the validity
            of the information submitted under this subsection in order to
            ensure that such information is appropriately compared across
            hospitals and centers. Such procedures shall address failures
            to report as well as errors in reporting.
                ``(5) Implementation.--Not later than 1 year after the date
            of enactment of this section, the Secretary, through the
            Director of CDC, shall promulgate regulations to carry out this
            section.
        ``(b) Public Posting of Information.--The Secretary shall promptly
    post, on the official public Internet site of the Department of Health
    and Human Services, the information reported under subsection (a). Such
    information shall be set forth in a manner that allows for the
    comparison of information on health care-associated infections--
                ``(1) among hospitals and ambulatory surgical centers; and
                ``(2) by demographic information.
        ``(c) Annual Report to Congress.--On an annual basis the Secretary
    shall submit to the Congress a report that summarizes each of the
    following:
                ``(1) The number and types of health care-associated
            infections reported under subsection (a) in hospitals and
            ambulatory surgical centers during such year.
                ``(2) Factors that contribute to the occurrence of such
            infections, including health care worker immunization rates.
                ``(3) Based on the most recent information available to the
            Secretary on the composition of the professional staff of
            hospitals and ambulatory surgical centers, the number of
            certified infection control professionals on the staff of
            hospitals and ambulatory surgical centers.
                ``(4) The total increases or decreases in health care costs
            that resulted from increases or decreases in the rates of
            occurrence of each such type of infection during such year.
                ``(5) Recommendations, in coordination with the Center for
            Quality Improvement established under section 931 of the Public
            Health Service Act, for best practices to eliminate the rates
            of occurrence of each such type of infection in hospitals and
            ambulatory surgical centers.
        ``(d) Non-preemption of State Laws.--Nothing in this section shall
    be construed as preempting or otherwise affecting any provision of
    State law relating to the disclosure of information on health care-
    associated infections or patient safety procedures for a hospital or
    ambulatory surgical center.
        ``(e) Health Care-associated Infection.--For purposes of this
    section:
                ``(1) In general.--The term `health care-associated
            infection' means an infection that develops in a patient who
            has received care in any institutional setting where health
            care is delivered and is related to receiving health care.
                ``(2) Related to receiving health care.--The term `related
            to receiving health care', with respect to an infection, means
            that the infection was not incubating or present at the time
            health care was provided.
        ``(f) Application to Critical Access Hospitals.--For purposes of
    this section, the term `hospital' includes a critical access hospital,
    as defined in section 1861(mm)(1).''.
        (b) Effective Date.--With respect to section 1138A of the Social
    Security Act (as inserted by subsection (a) of this section), the
    requirement under such section that hospitals and ambulatory surgical
    centers submit reports takes effect on such date (not later than 2
    years after the date of the enactment of this Act) as the Secretary of
    Health and Human Services shall specify. In order to meet such
    deadline, the Secretary may implement such section through guidance or
    other instructions.
        (c) GAO Report.--Not later than 18 months after the date of the
    enactment of this Act, the Comptroller General of the United States
    shall submit to Congress a report on the program established under
    section 1138A of the Social Security Act, as inserted by subsection
    (a). Such report shall include an analysis of the appropriateness of
    the types of information required for submission, compliance with
    reporting requirements, the success of the validity procedures
    established, and any conflict or overlap between the reporting required
    under such section and any other reporting systems mandated by either
    the States or the Federal Government.
        (d) Report on Additional Data.--Not later than 18 months after the
    date of the enactment of this Act, the Secretary of Health and Human
    Services shall submit to the Congress a report on the appropriateness
    of expanding the requirements under such section to include additional
    information (such as health care worker immunization rates), in order
    to improve health care quality and patient safety.

                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

    SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSITIONS.

        (a) In General.--Section 1886(h) of the Social Security Act (42
    U.S.C. 1395ww(h)) is amended--
                (1) in paragraph (4)(F)(i), by striking ``paragraph (7)''
            and inserting ``paragraphs (7) and (8)'';
                (2) in paragraph (4)(H)(i), by striking ``paragraph (7)''
            and inserting ``paragraphs (7) and (8)'';
                (3) in paragraph (7)(E), by inserting ``and paragraph (8)''
            after ``this paragraph''; and
                (4) by adding at the end the following new paragraph:
                ``(8) Additional redistribution of unused residency
            positions.--
                        ``(A) Reductions in limit based on unused
                    positions.--
                                ``(i) Programs subject to reduction.--If a
                            hospital's reference resident level (specified
                            in clause (ii)) is less than the otherwise
                            applicable resident limit (as defined in
                            subparagraph (C)(ii)), effective for portions
                            of cost reporting periods occurring on or after
                            July 1, 2011, the otherwise applicable resident
                            limit shall be reduced by 90 percent of the
                            difference between such otherwise applicable
                            resident limit and such reference resident
                            level.
                                ``(ii) Reference resident level.--
                                        ``(I) In general.--Except as
                                    otherwise provided in a subsequent
                                    subclause, the reference resident level
                                    specified in this clause for a hospital
                                    is the highest resident level for any
                                    of the 3 most recent cost reporting
                                    periods (ending before the date of the
                                    enactment of this paragraph) of the
                                    hospital for which a cost report has
                                    been settled (or, if not, submitted
                                    (subject to audit)), as determined by
                                    the Secretary.
                                        ``(II) Use of most recent
                                    accounting period to recognize
                                    expansion of existing programs.--If a
                                    hospital submits a timely request to
                                    increase its resident level due to an
                                    expansion, or planned expansion, of an
                                    existing residency training program
                                    that is not reflected on the most
                                    recent settled or submitted cost
                                    report, after audit and subject to the
                                    discretion of the Secretary, subject to
                                    subclause (IV), the reference resident
                                    level for such hospital is the resident
                                    level that includes the additional
                                    residents attributable to such
                                    expansion or establishment, as
                                    determined by the Secretary. The
                                    Secretary is authorized to determine an
                                    alternative reference resident level
                                    for a hospital that submitted to the
                                    Secretary a timely request, before the
                                    start of the 2009-2010 academic year,
                                    for an increase in its reference
                                    resident level due to a planned
                                    expansion.
                                        ``(III) Special provider
                                    agreement.--In the case of a hospital
                                    described in paragraph (4)(H)(v), the
                                    reference resident level specified in
                                    this clause is the limitation
                                    applicable under subclause (I) of such
                                    paragraph.
                                        ``(IV) Previous redistribution.--
                                    The reference resident level specified
                                    in this clause for a hospital shall be
                                    increased to the extent required to
                                    take into account an increase in
                                    resident positions made available to
                                    the hospital under paragraph (7)(B)
                                    that are not otherwise taken into
                                    account under a previous subclause.
                                ``(iii) Affiliation.--The provisions of
                            clause (i) shall be applied to hospitals which
                            are members of the same affiliated group (as
                            defined by the Secretary under paragraph
                            (4)(H)(ii)) and to the extent the hospitals can
                            demonstrate that they are filling any
                            additional  resident slots allocated to other
                            hospitals through an affiliation agreement, the
                            Secretary shall adjust the determination of
                            available slots accordingly, or which the
                            Secretary otherwise has permitted the resident
                            positions (under section 402 of the Social
                            Security Amendments of 1967) to be aggregated
                            for purposes of applying the resident position
                            limitations under this subsection.
                        ``(B) Redistribution.--
                                ``(i) In general.--The Secretary shall
                            increase the otherwise applicable resident
                            limit for each qualifying hospital that submits
                            an application under this subparagraph by such
                            number as the Secretary may approve for
                            portions of cost reporting periods occurring on
                            or after July 1, 2011. The estimated aggregate
                            number of increases in the otherwise applicable
                            resident limit under this subparagraph may not
                            exceed the Secretary's estimate of the
                            aggregate reduction in such limits attributable
                            to subparagraph (A).
                                ``(ii) Requirements for qualifying
                            hospitals.--A hospital is not a qualifying
                            hospital for purposes of this paragraph unless
                            the following requirements are met:
                                        ``(I) Maintenance of primary care
                                    resident level.--The hospital maintains
                                    the number of primary care residents at
                                    a level that is not less than the base
                                    level of primary care residents
                                    increased by the number of additional
                                    primary care resident positions
                                    provided to the hospital under this
                                    subparagraph. For purposes of this
                                    subparagraph, the `base level of
                                    primary care residents' for a hospital
                                    is the level of such residents as of a
                                    base period (specified by the
                                    Secretary), determined without regard
                                    to whether such positions were in
                                    excess of the otherwise applicable
                                    resident limit for such period but
                                    taking into account the application of
                                    subclauses (II) and (III) of
                                    subparagraph (A)(ii).
                                        ``(II) Dedicated assignment of
                                    additional resident positions to
                                    primary care.--The hospital assigns all
                                    such additional resident positions for
                                    primary care residents.
                                        ``(III) Accreditation.--The
                                    hospital's residency programs in
                                    primary care are fully accredited or,
                                    in the case of a residency training
                                    program not in operation as of the base
                                    year, the hospital is actively applying
                                    for such accreditation for the program
                                    for such additional resident positions
                                    (as determined by the Secretary).
                                ``(iii) Considerations in redistribution.--
                            In determining for which qualifying hospitals
                            the increase in the otherwise applicable
                            resident limit is provided under this
                            subparagraph, the Secretary shall take into
                            account the demonstrated likelihood of the
                            hospital filling the positions within the first
                            3 cost reporting periods beginning on or after
                            July 1, 2011, made available under this
                            subparagraph, as determined by the Secretary.
                                ``(iv) Priority for certain hospitals.--In
                            determining for which qualifying hospitals the
                            increase in the otherwise applicable resident
                            limit is provided under this subparagraph, the
                            Secretary shall distribute the increase to
                            qualifying hospitals based on the following
                            criteria:
                                        ``(I) The Secretary shall give
                                    preference to hospitals that had a
                                    reduction in resident training
                                    positions under subparagraph (A).
                                        ``(II) The Secretary shall give
                                    preference to hospitals with 3-year
                                    primary care residency training
                                    programs, such as family practice and
                                    general internal medicine.
                                        ``(III) The Secretary shall give
                                    preference to hospitals insofar as they
                                    have in effect formal arrangements (as
                                    determined by the Secretary) that place
                                    greater emphasis upon training in
                                    Federally qualified health centers,
                                    rural health clinics, and other
                                    nonprovider settings, and to hospitals
                                    that receive additional payments under
                                    subsection (d)(5)(F) and emphasize
                                    training in an outpatient department.
                                        ``(IV) The Secretary shall give
                                    preference to hospitals with a number
                                    of positions (as of July 1, 2009) in
                                    excess of the otherwise applicable
                                    resident limit for such period.
                                        ``(V) The Secretary shall give
                                    preference to hospitals that place
                                    greater emphasis upon training in a
                                    health professional shortage area
                                    (designated under section 332 of the
                                    Public Health Service Act) or a health
                                    professional needs area (designated
                                    under section 2211 of such Act).
                                        ``(VI) The Secretary shall give
                                    preference to hospitals in States that
                                    have low resident-to-population ratios
                                    (including a greater preference for
                                    those States with lower resident-to-
                                    population ratios).
                                ``(v) Limitation.--In no case shall more
                            than 20 full-time equivalent additional
                            residency positions be made available under
                            this subparagraph with respect to any hospital.
                                ``(vi) Application of per resident amounts
                            for primary care.--With respect to additional
                            residency positions in a hospital attributable
                            to the increase provided under this
                            subparagraph, the approved FTE resident amounts
                            are deemed to be equal to the hospital per
                            resident amounts for primary care and
                            nonprimary care computed under paragraph (2)(D)
                            for that hospital.
                                ``(vii) Distribution.--The Secretary shall
                            distribute the increase in resident training
                            positions to qualifying hospitals under this
                            subparagraph not later than July 1, 2011.
                        ``(C) Resident level and limit defined.--In this
                    paragraph:
                                ``(i) The term `resident level' has the
                            meaning given such term in paragraph (7)(C)(i).
                                ``(ii) The term `otherwise applicable
                            resident limit' means, with respect to a
                            hospital, the limit otherwise applicable under
                            subparagraphs (F)(i) and (H) of paragraph (4)
                            on the resident level for the hospital
                            determined without regard to this paragraph but
                            taking into account paragraph (7)(A).
                        ``(D) Maintenance of primary care resident level.--
                    In carrying out this paragraph, the Secretary shall
                    require hospitals that receive additional resident
                    positions under subparagraph (B)--
                                ``(i) to maintain records, and periodically
                            report to the Secretary, on the number of
                            primary care residents in its residency
                            training programs; and
                                ``(ii) as a condition of payment for a cost
                            reporting period under this subsection for such
                            positions, to maintain the level of such
                            positions at not less than the sum of--
                                        ``(I) the base level of primary
                                    care resident positions (as determined
                                    under subparagraph (B)(ii)(I)) before
                                    receiving such additional positions;
                                    and
                                        ``(II) the number of such
                                    additional positions.''.
        (b) IME.--
                (1) In general.--Section 1886(d)(5)(B)(v) of the Social
            Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the third
            sentence, is amended--
                        (A) by striking ``subsection (h)(7)'' and inserting
                    ``subsections (h)(7) and (h)(8)''; and
                        (B) by striking ``it applies'' and inserting ``they
                    apply''.
                (2) Conforming provision.--Section 1886(d)(5)(B) of the
            Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by
            adding at the end the following clause:
        ``(x) For discharges occurring on or after July 1, 2011, insofar as
    an additional payment amount under this subparagraph is attributable to
    resident positions distributed to a hospital under subsection
    (h)(8)(B), the indirect teaching adjustment factor shall be computed in
    the same manner as provided under clause (ii) with respect to such
    resident positions.''.
        (c) Conforming Amendment.--Section 422(b)(2) of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003 (Public
    Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that
    follows and inserting ``paragraphs (7) and (8) of subsection (h) of
    section 1886 of the Social Security Act.''.

    SEC. 1502. INCREASING TRAINING IN NONPROVIDER SETTINGS.

        (a) Direct GME.--Section 1886(h)(4)(E) of the Social Security Act
    (42 U.S.C. 1395ww(h)) is amended--
                (1) by designating the first sentence as a clause (i) with
            the heading ``In general.--'' and appropriate indentation;
                (2) by striking ``shall be counted and that all the time''
            and inserting ``shall be counted and that--
                                        ``(I) effective for cost reporting
                                    periods beginning before July 1, 2009,
                                    all the time'';
                (3) in subclause (I), as inserted by paragraph (1), by
            striking the period at the end and inserting ``; and''; and
                        (A) by inserting after subclause (I), as so
                    inserted, the following:
                                        ``(II) effective for cost reporting
                                    periods beginning on or after July 1,
                                    2009, all the time so spent by a
                                    resident shall be counted towards the
                                    determination of full-time equivalency,
                                    without regard to the setting in which
                                    the activities are performed, if the
                                    hospital incurs the costs of the
                                    stipends and fringe benefits of the
                                    resident during the time the resident
                                    spends in that setting.
                            Any hospital claiming under this subparagraph
                            for time spent in a nonprovider setting shall
                            maintain and make available to the Secretary
                            records regarding the amount of such time and
                            such amount in comparison with amounts of such
                            time in such base year as the Secretary shall
                            specify.''.
        (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
                (1) by striking ``(iv) Effective for discharges occurring
            on or after October 1, 1997'' and inserting ``(iv)(I) Effective
            for discharges occurring on or after October 1, 1997, and
            before July 1, 2009''; and
                (2) by inserting after subclause (I), as inserted by
            paragraph (1), the following new subclause:
                ``(II) Effective for discharges occurring on or after July
            1, 2009, all the time spent by an intern or resident in patient
            care activities at an entity in a nonprovider setting shall be
            counted towards the determination of full-time equivalency if
            the hospital incurs the costs of the stipends and fringe
            benefits of the intern or resident during the time the intern
            or resident spends in that setting.''.
        (c) OIG Study on Impact on Training.--The Inspector General of the
    Department of Health and Human Services shall analyze the data
    collected by the Secretary of Health and Human Services from the
    records made available to the Secretary under section 1886(h)(4)(E) of
    the Social Security Act, as amended by subsection (a), in order to
    assess the extent to which there is an increase in time spent by
    medical residents in training in nonprovider settings as a result of
    the amendments made by this section. Not later than 4 years after the
    date of the enactment of this Act, the Inspector General shall submit a
    report to Congress on such analysis and assessment.
        (d) Demonstration Project for Approved Teaching Health Centers.--
                (1) In general.--The Secretary of Health and Human Services
            shall conduct a demonstration project under which an approved
            teaching health center (as defined in paragraph (3)) would be
            eligible for payment under subsections (h) and (k) of section
            1886 of the Social Security Act (42 U.S.C. 1395ww) of amounts
            for its own direct costs of graduate medical education
            activities for primary care residents, as well as for the
            direct costs of graduate medical education activities of its
            contracting hospital for such residents, in a manner similar to
            the manner in which such payments would be made to a hospital
            if the hospital were to operate such a program.
                (2) Conditions.--Under the demonstration project--
                        (A) an approved teaching health center shall
                    contract with an accredited teaching hospital to carry
                    out the inpatient responsibilities of the primary care
                    residency program of the hospital involved and is
                    responsible for payment to the hospital for the
                    hospital's costs of the salary and fringe benefits for
                    residents in the program;
                        (B) the number of primary care residents of the
                    center shall not count against the contracting
                    hospital's resident limit; and
                        (C) the contracting hospital shall agree not to
                    diminish the number of residents in its primary care
                    residency training program.
                (3) Approved teaching health center defined.--In this
            subsection, the term ``approved teaching health center'' means
            a nonprovider setting, such as a Federally qualified health
            center or rural health clinic (as defined in section 1861(aa)
            of the Social Security Act), that develops and operates an
            accredited primary care residency program for which funding
            would be available if it were operated by a hospital.

    SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY
                  ACTIVITIES AND OTHER ACTIVITIES.

        (a) Direct GME.--Section 1886(h) of the Social Security Act (42
    U.S.C. 1395ww(h)) is amended--
                (1) in paragraph (4)(E), as amended by section 1502(a)--
                        (A) in clause (i), by striking ``Such rules'' and
                    inserting ``Subject to clause (ii), such rules''; and
                        (B) by adding at the end the following new clause:
                                ``(ii) Treatment of certain nonprovider and
                            didactic activities.--Such rules shall provide
                            that all time spent by an intern or resident in
                            an approved medical residency training program
                            in a nonprovider setting that is primarily
                            engaged in furnishing patient care (as defined
                            in paragraph (5)(K)) in nonpatient care
                            activities, such as didactic conferences and
                            seminars, but not including research not
                            associated with the treatment or diagnosis of a
                            particular patient, as such time and activities
                            are defined by the Secretary, shall be counted
                            toward the determination of full-time
                            equivalency.'';
                (2) in paragraph (4), by adding at the end the following
            new subparagraph:
                        ``(I) Treatment of certain time in approved medical
                    residency training programing.--In determining the
                    hospital's number of full-time equivalent residents for
                    purposes of this subsection, all the time that is spent
                    by an intern or resident in an approved medical
                    residency training program on vacation, sick leave, or
                    other approved leave, as such time is defined by the
                    Secretary, and that does not prolong the total time the
                    resident is participating in the approved program
                    beyond the normal duration of the program shall be
                    counted toward the determination of full-time
                    equivalency.''; and
                (3) in paragraph (5), by adding at the end the following
            new subparagraph:
                        ``(K) Nonprovider setting that is primarily engaged
                    in furnishing patient care.--The term `nonprovider
                    setting that is primarily engaged in furnishing patient
                    care' means a nonprovider setting in which the primary
                    activity is the care and treatment of patients, as
                    defined by the Secretary.''.
        (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42
    U.S.C. 1395ww(d)(5)(B)), as amended by section 1501(b), is amended by
    adding at the end the following new clause:
        ``(xi)(I) The provisions of subparagraph (I) of subsection (h)(4)
    shall apply under this subparagraph in the same manner as they apply
    under such subsection.
        ``(II) In determining the hospital's number of full-time equivalent
    residents for purposes of this subparagraph, all the time spent by an
    intern or resident in an approved medical residency training program in
    nonpatient care activities, such as didactic conferences and seminars,
    as such time and activities are defined by the Secretary, that occurs
    in the hospital shall be counted toward the determination of full-time
    equivalency if the hospital--
                ``(aa) is recognized as a subsection (d) hospital;
                ``(bb) is recognized as a subsection (d) Puerto Rico
            hospital;
                ``(cc) is reimbursed under a reimbursement system
            authorized under section 1814(b)(3); or
                ``(dd) is a provider-based hospital outpatient department.
        ``(III) In determining the hospital's number of full-time
    equivalent residents for purposes of this subparagraph, all the time
    spent by an intern or resident in an approved medical residency
    training program in research activities that are not associated with
    the treatment or diagnosis of a particular patient, as such time and
    activities are defined by the Secretary, shall not be counted toward
    the determination of full-time equivalency.''.
        (c) Effective Dates; Application.--
                (1) In general.--Except as otherwise provided, the
            Secretary of Health and Human Services shall implement the
            amendments made by this section in a manner so as to apply to
            cost reporting periods beginning on or after January 1, 1983.
                (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social
            Security Act, as added by subsection (a)(1)(B), shall apply to
            cost reporting periods beginning on or after July 1, 2008.
                (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social
            Security Act, as added by subsection (b), shall apply to cost
            reporting periods beginning on or after October 1, 2001. Such
            section, as so added, shall not give rise to any inference on
            how the law in effect prior to such date should be interpreted.
                (4) Application.--The amendments made by this section shall
            not be applied in a manner that requires reopening of any
            settled hospital cost reports as to which there is not a
            jurisdictionally proper appeal pending as of the date of the
            enactment of this Act on the issue of payment for indirect
            costs of medical education under section 1886(d)(5)(B) of the
            Social Security Act or for direct graduate medical education
            costs under section 1886(h) of such Act.

    SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED
                  HOSPITALS.

        (a) Direct GME.--Section 1886(h)(4)(H) of the Social Security Act
    (42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the
    following new clause:
                                ``(vi) Redistribution of residency slots
                            after a hospital closes.--
                                        ``(I) In general.--The Secretary
                                    shall, by regulation, establish a
                                    process consistent with subclauses (II)
                                    and (III) under which, in the case
                                    where a hospital (other than a hospital
                                    described in clause (v)) with an
                                    approved medical residency program in a
                                    State closes on or after the date that
                                    is 2 years before the date of the
                                    enactment of this clause, the Secretary
                                    shall increase the otherwise applicable
                                    resident limit under this paragraph for
                                    other hospitals in the State in
                                    accordance with this clause.
                                        ``(II) Process for hospitals in
                                    certain areas.--In determining for
                                    which hospitals the increase in the
                                    otherwise applicable resident limit
                                    described in subclause (I) is provided,
                                    the Secretary shall establish a process
                                    to provide for such increase to one or
                                    more hospitals located in the State.
                                    Such process shall take into
                                    consideration the recommendations
                                    submitted to the Secretary by the
                                    senior health official (as designated
                                    by the chief executive officer of such
                                    State) if such recommendations are
                                    submitted not later than 180 days after
                                    the date of the hospital closure
                                    involved (or, in the case of a hospital
                                    that closed after the date that is 2
                                    years before the date of the enactment
                                    of this clause, 180 days after such
                                    date of enactment).
                                        ``(III) Limitation.--The estimated
                                    aggregate number of increases in the
                                    otherwise applicable resident limits
                                    for hospitals under this clause shall
                                    be equal to the estimated number of
                                    resident positions in the approved
                                    medical residency programs that closed
                                    on or after the date described in
                                    subclause (I).''.
        (b) No Effect on Temporary FTE Cap Adjustments.--The amendments
    made by this section shall not effect any temporary adjustment to a
    hospital's FTE cap under section 413.79(h) of title 42, Code of Federal
    Regulations (as in effect on the date of enactment of this Act) and
    shall not affect the application of section 1886(h)(4)(H)(v) of the
    Social Security Act.
        (c) Conforming Amendments.--
                (1) Section 422(b)(2) of the Medicare Prescription Drug,
            Improvement, and Modernization Act of 2003 (Public Law 108-
            173), as amended by section 1501(c), is amended by striking
            ``(7) and'' and inserting ``(4)(H)(vi), (7), and''.
                (2) Section 1886(h)(7)(E) of the Social Security Act (42
            U.S.C. 1395ww(h)(7)(E)) is amended by inserting ``or under
            paragraph (4)(H)(vi)'' after ``under this paragraph''.

    SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED MEDICAL RESIDENCY
                  TRAINING.

        (a) Specification of Goals for Approved Medical Residency Training
    Programs.--Section 1886(h)(1) of the Social Security Act (42 U.S.C.
    1395ww(h)(1)) is amended--
                (1) by designating the matter beginning with
            ``Notwithstanding'' as a subparagraph (A) with the heading ``In
            general.--'' and with appropriate indentation; and
                (2) by adding at the end the following new subparagraph:
                        ``(B) Goals and accountability for approved medical
                    residency training programs.--The goals of medical
                    residency training programs are to foster a physician
                    workforce so that physicians are trained to be able to
                    do the following:
                                ``(i) Work effectively in various health
                            care delivery settings, such as nonprovider
                            settings.
                                ``(ii) Coordinate patient care within and
                            across settings relevant to their specialties.
                                ``(iii) Understand the relevant cost and
                            value of various diagnostic and treatment
                            options.
                                ``(iv) Work in inter-professional teams and
                            multi-disciplinary team-based models in
                            provider and nonprovider settings to enhance
                            safety and improve quality of patient care.
                                ``(v) Be knowledgeable in methods of
                            identifying systematic errors in health care
                            delivery and in implementing systematic
                            solutions in case of such errors, including
                            experience and participation in continuous
                            quality improvement projects to improve health
                            outcomes of the population the physicians
                            serve.
                                ``(vi) Be meaningful EHR users (as
                            determined under section 1848(o)(2)) in the
                            delivery of care and in improving the quality
                            of the health of the community and the
                            individuals that the hospital serves.''
        (b) GAO Study on Evaluation of Training Programs.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study to evaluate the extent to which
            medical residency training programs--
                        (A) are meeting the goals described in section
                    1886(h)(1)(B) of the Social Security Act, as added by
                    subsection (a), in a range of residency programs,
                    including primary care and other specialties; and
                        (B) have the appropriate faculty expertise to teach
                    the topics required to achieve such goals.
                (2) Report.--Not later than 18 months after the date of the
            enactment of this Act, the Comptroller General shall submit to
            Congress a report on such study and shall include in such
            report recommendations as to how medical residency training
            programs could be further encouraged to meet such goals through
            means such as--
                        (A) development of curriculum requirements; and
                        (B) assessment of the accreditation processes of
                    the Accreditation Council for Graduate Medical
                    Education and the American Osteopathic Association and
                    effectiveness of those processes in accrediting medical
                    residency programs that meet the goals referred to in
                    paragraph (1)(A).

                          TITLE VI--PROGRAM INTEGRITY

         Subtitle A--Increased Funding to Fight Waste, Fraud, and Abuse

    SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO FIGHT FRAUD AND ABUSE.

        (a) In General.--Section 1817(k) of the Social Security Act (42
    U.S.C. 1395i(k)) is amended--
                (1) by adding at the end the following new paragraph:
                ``(7) Additional funding.--In addition to the funds
            otherwise appropriated to the Account from the Trust Fund under
            paragraphs (3) and (4) and for purposes described in paragraphs
            (3)(C) and (4)(A), there are hereby appropriated an additional
            $100,000,000 to such Account from such Trust Fund for each
            fiscal year beginning with 2011. The funds appropriated under
            this paragraph shall be allocated in the same proportion as the
            total funding appropriated with respect to paragraphs (3)(A)
            and (4)(A) was allocated with respect to fiscal year 2010, and
            shall be available without further appropriation until
            expended.''.
                (2) in paragraph (4)(A)--
                        (A) by inserting ``for activities described in
                    paragraph (3)(C) and'' after ``necessary''; and
                        (B) by inserting ``until expended'' after
                    ``appropriation''.
        (b) Flexibility in Pursuing Fraud and Abuse.--Section 1893(a) of
    the Social Security Act (42 U.S.C. 1395ddd(a)) is amended by inserting
    ``, or otherwise,'' after ``entities''.

               Subtitle B--Enhanced Penalties for Fraud and Abuse

    SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS ON PROVIDER OR
                  SUPPLIER ENROLLMENT APPLICATIONS.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)) is amended--
                (1) in paragraph (1)(D), by striking all that follows ``in
            which the person was excluded'' and inserting ``under Federal
            law from the Federal health care program under which the claim
            was made, or'';
                (2) by striking ``or'' at the end of paragraph (6);
                (3) in paragraph (7), by inserting at the end ``or'';
                (4) by inserting after paragraph (7) the following new
            paragraph:
                ``(8) knowingly makes or causes to be made any false
            statement, omission, or misrepresentation of a material fact in
            any application, agreement, bid, or contract to participate or
            enroll as a provider of services or supplier under a Federal
            health care program, including managed care organizations under
            title XIX, Medicare Advantage organizations under part C of
            title XVIII, prescription drug plan sponsors under part D of
            title XVIII, and entities that apply to participate as
            providers of services or suppliers in such managed care
            organizations and such plans;'';
                (5) in the matter following paragraph (8), as inserted by
            paragraph (4), by striking ``or in cases under paragraph (7),
            $50,000 for each such act)'' and inserting ``in cases under
            paragraph (7), $50,000 for each such act, or in cases under
            paragraph (8), $50,000 for each false statement, omission, or
            misrepresentation of a material fact)''; and
                (6) in the second sentence, by striking ``for a lawful
            purpose)'' and inserting ``for a lawful purpose, or in cases
            under paragraph (8), an assessment of not more than 3 times the
            amount claimed as the result of the false statement, omission,
            or misrepresentation of material fact claimed by a provider of
            services or supplier whose application to participate contained
            such false statement, omission, or misrepresentation)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to acts committed on or after January 1, 2010.

    SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF FALSE STATEMENTS
                  MATERIAL TO A FALSE CLAIM.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by section 1611, is further amended--
                (1) in paragraph (7), by striking ``or'' at the end;
                (2) in paragraph (8), by inserting ``or'' at the end; and
                (3) by inserting after paragraph (8), the following new
            paragraph:
                ``(9) knowingly makes, uses, or causes to be made or used,
            a false record or statement material to a false or fraudulent
            claim for payment for items and services furnished under a
            Federal health care program;''; and
                (4) in the matter following paragraph (9), as inserted by
            paragraph (3)--
                        (A) by striking ``or in cases under paragraph (8)''
                    and inserting ``in cases under paragraph (8)''; and
                        (B) by striking ``a material fact)'' and inserting
                    ``a material fact, in cases under paragraph (9),
                    $50,000 for each false record or statement)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to acts committed on or after January 1, 2010.

    SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPECTIONS.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by sections 1611 and 1612, is further
    amended--
                (1) in paragraph (8), by striking ``or'' at the end;
                (2) in paragraph (9), by inserting ``or'' at the end;
                (3) by inserting after paragraph (9) the following new
            paragraph:
                ``(10) fails to grant timely access, upon reasonable
            request (as defined by the Secretary in regulations), to the
            Inspector General of the Department of Health and Human
            Services, for the purpose of audits, investigations,
            evaluations, or other statutory functions of the Inspector
            General of the Department of Health and Human Services;''; and
                (4) in the matter following paragraph (10), as inserted by
            paragraph (3), by inserting ``, or in cases under paragraph
            (10), $15,000 for each day of the failure described in such
            paragraph'' after ``false record or statement''.
        (b) Ensuring Timely Inspections Relating to Contracts With MA
    Organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 1395w-
    27(d)(2)) is amended--
                (1) in subparagraph (A), by inserting ``timely'' before
            ``inspect''; and
                (2) in subparagraph (B), by inserting ``timely'' before
            ``audit and inspect''.
        (c) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.

        (a) Medicare.--Part A of title XVIII of the Social Security Act is
    amended by inserting after section 1819 the following new section:

    ``SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE CARE.

        ``(a) In General.--If the Secretary determines on the basis of a
    survey or otherwise, that a hospice program that is certified for
    participation under this title has demonstrated a substandard quality
    of care and failed to meet such other requirements as the Secretary may
    find necessary in the interest of the health and safety of the
    individuals who are provided care and services by the agency or
    organization involved and determines--
                ``(1) that the deficiencies involved immediately jeopardize
            the health and safety of the individuals to whom the program
            furnishes items and services, the Secretary shall take
            immediate action to remove the jeopardy and correct the
            deficiencies through the remedy specified in subsection
            (b)(2)(A)(iii) or terminate the certification of the program,
            and may provide, in addition, for 1 or more of the other
            remedies described in subsection (b)(2)(A); or
                ``(2) that the deficiencies involved do not immediately
            jeopardize the health and safety of the individuals to whom the
            program furnishes items and services, the Secretary may--
                        ``(A) impose intermediate sanctions developed
                    pursuant to subsection (b), in lieu of terminating the
                    certification of the program; and
                        ``(B) if, after such a period of intermediate
                    sanctions, the program is still not in compliance with
                    such requirements, the Secretary shall terminate the
                    certification of the program.
            If the Secretary determines that a hospice program that is
            certified for participation under this title is in compliance
            with such requirements but, as of a previous period, was not in
            compliance with such requirements, the Secretary may provide
            for a civil money penalty under subsection (b)(2)(A)(i) for the
            days in which it finds that the program was not in compliance
            with such requirements.
        ``(b) Intermediate Sanctions.--
                ``(1) Development and implementation.--The Secretary shall
            develop and implement, by not later than July 1, 2012--
                        ``(A) a range of intermediate sanctions to apply to
                    hospice programs under the conditions described in
                    subsection (a), and
                        ``(B) appropriate procedures for appealing
                    determinations relating to the imposition of such
                    sanctions.
                ``(2) Specified sanctions.--
                        ``(A) In general.--The intermediate sanctions
                    developed under paragraph (1) may include--
                                ``(i) civil money penalties in an amount
                            not to exceed $10,000 for each day of
                            noncompliance or, in the case of a per instance
                            penalty applied by the Secretary, not to exceed
                            $25,000,
                                ``(ii) denial of all or part of the
                            payments to which a hospice program would
                            otherwise be entitled under this title with
                            respect to items and services furnished by a
                            hospice program on or after the date on which
                            the Secretary determines that intermediate
                            sanctions should be imposed pursuant to
                            subsection (a)(2),
                                ``(iii) the appointment of temporary
                            management to oversee the operation of the
                            hospice program and to protect and assure the
                            health and safety of the individuals under the
                            care of the program while improvements are
                            made,
                                ``(iv) corrective action plans, and
                                ``(v) in-service training for staff.
                    The provisions of section 1128A (other than subsections
                    (a) and (b)) shall apply to a civil money penalty under
                    clause (i) in the same manner as such provisions apply
                    to a penalty or proceeding under section 1128A(a). The
                    temporary management under clause (iii) shall not be
                    terminated until the Secretary has determined that the
                    program has the management capability to ensure
                    continued compliance with all requirements referred to
                    in that clause.
                        ``(B) Clarification.--The sanctions specified in
                    subparagraph (A) are in addition to sanctions otherwise
                    available under State or Federal law and shall not be
                    construed as limiting other remedies, including any
                    remedy available to an individual at common law.
                        ``(C) Commencement of payment.--A denial of payment
                    under subparagraph (A)(ii) shall terminate when the
                    Secretary determines that the hospice program no longer
                    demonstrates a substandard quality of care and meets
                    such other requirements as the Secretary may find
                    necessary in the interest of the health and safety of
                    the individuals who are provided care and services by
                    the agency or organization involved.
                ``(3) Secretarial authority.--The Secretary shall develop
            and implement, by not later than July 1, 2011, specific
            procedures with respect to the conditions under which each of
            the intermediate sanctions developed under paragraph (1) is to
            be applied, including the amount of any fines and the severity
            of each of these sanctions. Such procedures shall be designed
            so as to minimize the time between identification of
            deficiencies and imposition of these sanctions and shall
            provide for the imposition of incrementally more severe fines
            for repeated or uncorrected deficiencies.''.
        (b) Application to Medicaid.--Section 1905(o) of the Social
    Security Act (42 U.S.C. 1396d(o)) is amended by adding at the end the
    following new paragraph:
        ``(4) The provisions of section 1819A shall apply to a hospice
    program providing hospice care under this title in the same manner as
    such provisions apply to a hospice program providing hospice care under
    title XVIII.''.
        (c) Application to CHIP.--Title XXI of the Social Security Act is
    amended by adding at the end the following new section:

    ``SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE.

        ``The provisions of section 1819A shall apply to a hospice program
    providing hospice care under this title in the same manner such
    provisions apply to a hospice program providing hospice care under
    title XVIII.''.

    SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EXCLUDED FROM PROGRAM
                  PARTICIPATION.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by the previous sections, is further
    amended--
                (1) by striking ``or'' at the end of paragraph (9);
                (2) by inserting ``or'' at the end of paragraph (10);
                (3) by inserting after paragraph (10) the following new
            paragraph:
                ``(11) orders or prescribes an item or service, including
            without limitation home health care, diagnostic and clinical
            lab tests, prescription drugs, durable medical equipment,
            ambulance services, physical or occupational therapy, or any
            other item or service, during a period when the person has been
            excluded from participation in a Federal health care program,
            and the person knows or should know that a claim for such item
            or service will be presented to such a program;''; and
                (4) in the matter following paragraph (11), as inserted by
            paragraph (2), by striking ``$15,000 for each day of the
            failure described in such paragraph'' and inserting ``$15,000
            for each day of the failure described in such paragraph, or in
            cases under paragraph (11), $50,000 for each order or
            prescription for an item or service by an excluded
            individual''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF FALSE INFORMATION BY
                  MEDICARE ADVANTAGE AND PART D PLANS.

        (a) In General.--Section 1857(g)(2)(A) of the Social Security Act
    (42 U.S.C. 1395w--27(g)(2)(A)) is amended by inserting ``except with
    respect to a determination under subparagraph (E), an assessment of not
    more than 3 times the amount claimed by such plan or plan sponsor based
    upon the misrepresentation or falsified information involved,'' after
    ``for each such determination,''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVANTAGE AND PART D
                  MARKETING VIOLATIONS.

        (a) In General.--Section 1857(g)(1) of the Social Security Act (42
    U.S.C. 1395w--27(g)(1)), as amended by section 1221(b), is amended--
                (1) in subparagraph (G), by striking ``or'' at the end;
                (2) by inserting after subparagraph (H) the following new
            subparagraphs:
                        ``(I) except as provided under subparagraph (C) or
                    (D) of section 1860D-1(b)(1), enrolls an individual in
                    any plan under this part without the prior consent of
                    the individual or the designee of the individual;
                        ``(J) transfers an individual enrolled under this
                    part from one plan to another without the prior consent
                    of the individual or the designee of the individual or
                    solely for the purpose of earning a commission;
                        ``(K) fails to comply with marketing restrictions
                    described in subsections (h) and (j) of section 1851 or
                    applicable implementing regulations or guidance; or
                        ``(L) employs or contracts with any individual or
                    entity who engages in the conduct described in
                    subparagraphs (A) through (K) of this paragraph;''; and
                (3) by adding at the end the following new sentence: ``The
            Secretary may provide, in addition to any other remedies
            authorized by law, for any of the remedies described in
            paragraph (2), if the Secretary determines that any employee or
            agent of such organization, or any provider or supplier who
            contracts with such organization, has engaged in any conduct
            described in subparagraphs (A) through (L) of this paragraph.''
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF PROGRAM AUDITS.

        (a) In General.--Section 1128(b)(2) of the Social Security Act (42
    U.S.C. 1320a-7(b)(2)) is amended--
                (1) in the heading, by inserting ``or audit'' after
            ``investigation''; and
                (2) by striking ``investigation into'' and all that follows
            through the period and inserting ``investigation or audit
            related to--''
                                ``(i) any offense described in paragraph
                            (1) or in subsection (a); or
                                ``(ii) the use of funds received, directly
                            or indirectly, from any Federal health care
                            program (as defined in section 1128B(f)).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM
                  PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS.

        (a) In General.--Section 1128(c) of the Social Security Act, as
    previously amended by this subdivision, is further amended--
                (1) in the heading, by striking ``and Period'' and
            inserting ``Period, and Effect''; and
                (2) by adding at the end the following new paragraph:
        ``(4)(A) For purposes of this Act, subject to subparagraph (C), the
    effect of exclusion is that no payment may be made by any Federal
    health care program (as defined in section 1128B(f)) with respect to
    any item or service furnished--
                ``(i) by an excluded individual or entity; or
                ``(ii) at the medical direction or on the prescription of a
            physician or other authorized individual when the person
            submitting a claim for such item or service knew or had reason
            to know of the exclusion of such individual.
        ``(B) For purposes of this section and sections 1128A and 1128B,
    subject to subparagraph (C), an item or service has been furnished by
    an individual or entity if the individual or entity directly or
    indirectly provided, ordered, manufactured, distributed, prescribed, or
    otherwise supplied the item or service regardless of how the item or
    service was paid for by a Federal health care program or to whom such
    payment was made.
        ``(C)(i) Payment may be made under a Federal health care program
    for emergency items or services (not including items or services
    furnished in an emergency room of a hospital) furnished by an excluded
    individual or entity, or at the medical direction or on the
    prescription of an excluded physician or other authorized individual
    during the period of such individual's exclusion.
        ``(ii) In the case that an individual eligible for benefits under
    title XVIII or XIX submits a claim for payment for items or services
    furnished by an excluded individual or entity, and such individual
    eligible for such benefits did not know or have reason to know that
    such excluded individual or entity was so excluded, then,
    notwithstanding such exclusion, payment shall be made for such items or
    services. In such case the Secretary shall notify such individual
    eligible for such benefits of the exclusion of the individual or entity
    furnishing the items or services. Payment shall not be made for items
    or services furnished by an excluded individual or entity to an
    individual eligible for such benefits after a reasonable time (as
    determined by the Secretary in regulations) after the Secretary has
    notified the individual eligible for such benefits of the exclusion of
    the individual or entity furnishing the items or services.
        ``(iii) In the case that a claim for payment for items or services
    furnished by an excluded individual or entity is submitted by an
    individual or entity other than an individual eligible for benefits
    under title XVIII or XIX or the excluded individual or entity, and the
    Secretary determines that the individual or entity that submitted the
    claim took reasonable steps to learn of the exclusion and reasonably
    relied upon inaccurate or misleading information from the relevant
    Federal health care program or its contractor, the Secretary may waive
    repayment of the amount paid in violation of the exclusion to the
    individual or entity that submitted the claim for the items or services
    furnished by the excluded individual or entity. If a Federal health
    care program contractor provided inaccurate or misleading information
    that resulted in the waiver of an overpayment under this clause, the
    Secretary shall take appropriate action to recover the improperly paid
    amount from the contractor.''.

             Subtitle C--Enhanced Program and Provider Protections

    SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

        (a) In General.--Title XI of the Social Security Act (42 U.S.C.
    1301 et seq.) is amended by inserting after section 1128F the following
    new section:

    ``SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PROTECTIONS IN THE
                  MEDICARE, MEDICAID, AND CHIP PROGRAMS.

        ``(a) Certain Authorized Screening, Enhanced Oversight Periods, and
    Enrollment Moratoria.--
                ``(1) In general.--For periods beginning after January 1,
            2011, in the case that the Secretary determines there is a
            significant risk of fraudulent activity (as determined by the
            Secretary based on relevant complaints, reports, referrals by
            law enforcement or other sources, data analysis, trending
            information, or claims submissions by providers of services and
            suppliers) with respect to a category of provider of services
            or supplier of items or services, including a category within a
            geographic area, under title XVIII, XIX, or XXI, the Secretary
            may impose any of the following requirements with respect to a
            provider of services or a supplier (whether such provider or
            supplier is initially enrolling in the program or is renewing
            such enrollment):
                        ``(A) Screening under paragraph (2).
                        ``(B) Enhanced oversight periods under paragraph
                    (3).
                        ``(C) Enrollment moratoria under paragraph (4).
            In applying this subsection for purposes of title XIX and XXI
            the Secretary may require a State to carry out the provisions
            of this subsection as a requirement of the State plan under
            title XIX or the child health plan under title XXI. Actions
            taken and determinations made under this subsection shall not
            be subject to review by a judicial tribunal.
                ``(2) Screening.--For purposes of paragraph (1), the
            Secretary shall establish procedures under which screening is
            conducted with respect to providers of services and suppliers
            described in such paragraph. Such screening may include--
                        ``(A) licensing board checks;
                        ``(B) screening against the list of individuals and
                    entities excluded from the program under title XVIII,
                    XIX, or XXI;
                        ``(C) the excluded provider list system;
                        ``(D) background checks; and
                        ``(E) unannounced pre-enrollment or other site
                    visits.
                ``(3) Enhanced oversight period.--For purposes of paragraph
            (1), the Secretary shall establish procedures to provide for a
            period of not less than 30 days and not more than 365 days
            during which providers of services and suppliers described in
            such paragraph, as the Secretary determines appropriate, would
            be subject to enhanced oversight, such as required or
            unannounced (or required and unannounced) site visits or
            inspections, prepayment review, enhanced review of claims, and
            such other actions as specified by the Secretary, under the
            programs under titles XVIII, XIX, and XXI. Under such
            procedures, the Secretary may extend such period for more than
            365 days if the Secretary determines that after the initial
            period such additional period of oversight is necessary.
                ``(4) Moratorium on enrollment of providers and
            suppliers.--For purposes of paragraph (1), the Secretary, based
            upon a finding of a risk of serious ongoing fraud within a
            program under title XVIII, XIX, or XXI, may impose a moratorium
            on the enrollment of providers of services and suppliers within
            a category of providers of services and suppliers (including a
            category within a specific geographic area) under such title.
            Such a moratorium may only be imposed if the Secretary makes a
            determination that the moratorium would not adversely impact
            access of individuals to care under such program.
                ``(5) Clarification.--Nothing in this subsection shall be
            interpreted to preclude or limit the ability of a State to
            engage in provider screening or enhanced provider oversight
            activities beyond those required by the Secretary.''.
        (b) Conforming Amendments.--
                (1) Medicaid.--Section 1902(a) of the Social Security Act
            (42 U.S.C. 42 U.S.C. 1396a(a)) is amended--
                        (A) in paragraph (23), by inserting before the
                    semicolon at the end the following: ``or by a person to
                    whom or entity to which a moratorium under section
                    1128G(a)(4) is applied during the period of such
                    moratorium'';
                        (B) in paragraph (72); by striking at the end
                    ``and'';
                        (C) in paragraph (73), by striking the period at
                    the end and inserting ``; and''; and
                        (D) by adding after paragraph (73) the following
                    new paragraph:
                ``(74) provide that the State will enforce any
            determination made by the Secretary under subsection (a) of
            section 1128G (relating to a significant risk of fraudulent
            activity with respect to a category of provider or supplier
            described in such subsection (a) through use of the appropriate
            procedures described in such subsection (a)), and that the
            State will carry out any activities as required by the
            Secretary for purposes of such subsection (a).''.
                (2) CHIP.--Section 2102 of such Act (42 U.S.C. 1397bb) is
            amended by adding at the end the following new subsection:
        ``(d) Program Integrity.--A State child health plan shall include a
    description of the procedures to be used by the State--
                ``(1) to enforce any determination made by the Secretary
            under subsection (a) of section 1128G (relating to a
            significant risk of fraudulent activity with respect to a
            category of provider or supplier described in such subsection
            through use of the appropriate procedures described in such
            subsection); and
                ``(2) to carry out any activities as required by the
            Secretary for purposes of such subsection.''.
                (3) Medicare.--Section 1866(j) of such Act (42 U.S.C.
            1395cc(j)) is amended by adding at the end the following new
            paragraph:
                ``(3) Program integrity.--The provisions of section
            1128G(a) apply to enrollments and renewals of enrollments of
            providers of services and suppliers under this title.''.

    SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP PROGRAM DISCLOSURE
                  REQUIREMENTS RELATING TO PREVIOUS AFFILIATIONS.

        (a) In General.--Section 1128G of the Social Security Act, as
    inserted by section 1631, is amended by adding at the end the following
    new subsection:
        ``(b) Enhanced Program Disclosure Requirements.--
                ``(1) Disclosure.--A provider of services or supplier who
            submits on or after July 1, 2011, an application for enrollment
            and renewing enrollment in a program under title XVIII, XIX, or
            XXI shall disclose (in a form and manner determined by the
            Secretary) any current affiliation or affiliation within the
            previous 10-year period with a provider of services or supplier
            that has uncollected debt or with a person or entity that has
            been suspended or excluded under such program, subject to a
            payment suspension, or has had its billing privileges revoked.
                ``(2) Enhanced safeguards.--If the Secretary determines
            that such previous affiliation of such provider or supplier
            poses a risk of fraud, waste, or abuse, the Secretary may apply
            such enhanced safeguards as the Secretary determines necessary
            to reduce such risk associated with such provider or supplier
            enrolling or participating in the program under title XVIII,
            XIX, or XXI. Such safeguards may include enhanced oversight,
            such as enhanced screening of claims, required or unannounced
            (or required and unannounced) site visits or inspections,
            additional information reporting requirements, and conditioning
            such enrollment on the provision of a surety bond.
                ``(3) Authority to deny participation.--If the Secretary
            determines that there has been at least one such affiliation
            and that such affiliation or affiliations, as applicable, of
            such provider or supplier poses a serious risk of fraud, waste,
            or abuse, the Secretary may deny the application of such
            provider or supplier.''.
        (b) Conforming Amendments.--
                (1) Medicaid.--Paragraph (74) of section 1902(a) of such
            Act (42 U.S.C. 1396a(a)), as added by section 1631(b)(1), is
            amended--
                        (A) by inserting ``or subsection (b) of such
                    section (relating to disclosure requirements)'' before
                    ``, and that the State''; and
                        (B) by inserting before the period the following:
                    ``and apply any enhanced safeguards, with respect to a
                    provider or supplier described in such subsection (b),
                    as the Secretary determines necessary under such
                    subsection (b)''.
                (2) CHIP.--Subsection (d) of section 2102 of such Act (42
            U.S.C. 1397bb), as added by section 1631(b)(2), is amended--
                        (A) in paragraph (1), by striking at the end
                    ``and'';
                        (B) in paragraph (2) by striking the period at the
                    end and inserting ``; and''' and
                        (C) by adding at the end the following new
                    paragraph:
                ``(3) to enforce any determination made by the Secretary
            under subsection (b) of section 1128G (relating to disclosure
            requirements) and to apply any enhanced safeguards, with
            respect to a provider or supplier described in such subsection,
            as the Secretary determines necessary under such subsection.''.

    SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER FOR CERTAIN
                  EVALUATION AND MANAGEMENT SERVICES.

        Section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as
    amended by section 4101 of the HITECH Act (Public Law 111-5), is
    amended by adding at the end the following new subsection:
        ``(p) Payment Modifier for Certain Evaluation and Management
    Services.--The Secretary shall establish a payment modifier under the
    fee schedule under this section for evaluation and management services
    (as specified in section 1842(b)(16)(B)(ii)) that result in the
    ordering of additional services (such as lab tests), the prescription
    of drugs, the furnishing or ordering of durable medical equipment in
    order to enable better monitoring of claims for payment for such
    additional services under this title, or the ordering, furnishing, or
    prescribing of other items and services determined by the Secretary to
    pose a high risk of waste, fraud, and abuse. The Secretary may require
    providers of services or suppliers to report such modifier in claims
    submitted for payment.''.

    SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICARE INTEGRITY
                  PROGRAM.

        (a) In General.--Section 1893(c) of the Social Security Act (42
    U.S.C. 1395ddd(c)) is amended--
                (1) in paragraph (3), by striking at the end ``and'';
                (2) by redesignating paragraph (4) as paragraph (5); and
                (3) by inserting after paragraph (3) the following new
            paragraph:
                ``(4) for the contract year beginning in 2011 and each
            subsequent contract year, the entity provides assurances to the
            satisfaction of the Secretary that the entity will conduct
            periodic evaluations of the effectiveness of the activities
            carried out by such entity under the Program and will submit to
            the Secretary an annual report on such activities; and''.
        (b) Reference to Medicaid Integrity Program.--For a similar
    provision with respect to the Medicaid Integrity Program, see section
    1752.

    SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE
                  WASTE, FRAUD, AND ABUSE.

        (a) In General.--Section 1874 of the Social Security Act (42 U.S.C.
    42 U.S.C. 1395kk) is amended by adding at the end the following new
    subsection:
        ``(e) Compliance Programs for Providers of Services and
    Suppliers.--
                ``(1) In general.--The Secretary may disenroll a provider
            of services or a supplier (other than a physician or a skilled
            nursing facility) under this title (or may impose any civil
            monetary penalty or other intermediate sanction under paragraph
            (4)) if such provider of services or supplier fails to, subject
            to paragraph (5), establish a compliance program that contains
            the core elements established under paragraph (2).
                ``(2) Establishment of core elements.--The Secretary, in
            consultation with the Inspector General of the Department of
            Health and Human Services, shall establish core elements for a
            compliance program under paragraph (1). Such elements may
            include written policies, procedures, and standards of conduct,
            a designated compliance officer and a compliance committee;
            effective training and education pertaining to fraud, waste,
            and abuse for the organization's employees and contractors; a
            confidential or anonymous mechanism, such as a hotline, to
            receive compliance questions and reports of fraud, waste, or
            abuse; disciplinary guidelines for enforcement of standards;
            internal monitoring and auditing procedures, including
            monitoring and auditing of contractors; procedures for ensuring
            prompt responses to detected offenses and development of
            corrective action initiatives, including responses to potential
            offenses; and procedures to return all identified overpayments
            to the programs under this title, title XIX, and title XXI.
                ``(3) Timeline for implementation.--The Secretary shall
            determine a timeline for the establishment of the core elements
            under paragraph (2) and the date on which a provider of
            services and suppliers (other than physicians) shall be
            required to have established such a program for purposes of
            this subsection.
                ``(4) CMS enforcement authority.--The Administrator for the
            Centers of Medicare & Medicaid Services shall have the
            authority to determine whether a provider of services or
            supplier described in subparagraph (3) has met the requirement
            of this subsection and to impose a civil monetary penalty not
            to exceed $50,000 for each violation. The Secretary may also
            impose other intermediate sanctions, including corrective
            action plans and additional monitoring in the case of a
            violation of this subsection.
                ``(5) Pilot program.--The Secretary may conduct a pilot
            program on the application of this subsection with respect to a
            category of providers of services or suppliers (other than
            physicians) that the Secretary determines to be a category
            which is at high risk for waste, fraud, and abuse before
            implementing the requirements of this subsection to all
            providers of services and suppliers described in paragraph
            (3).''.
        (b) Reference to Similar Medicaid Provision.--For a similar
    provision with respect to the Medicaid program under title XIX of the
    Social Security Act, see section 1753.

    SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO
                  NOT MORE THAN 12 MONTHS.

        (a) Purpose.--In general, the 36-month period currently allowed for
    claims filing under parts A, B, C, and, D of title XVIII of the Social
    Security Act presents opportunities for fraud schemes in which
    processing patterns of the Centers for Medicare & Medicaid Services can
    be observed and exploited. Narrowing the window for claims processing
    will not overburden providers and will reduce fraud and abuse.
        (b) Reducing Maximum Period for Submission.--
                (1) Part a.--Section 1814(a) of the Social Security Act (42
            U.S.C. 1395f(a)) is amended--
                        (A) in paragraph (1), by striking ``period of 3
                    calendar years'' and all that follows and inserting
                    ``period of 1 calendar year from which such services
                    are furnished; and''; and
                        (B) by adding at the end the following new
                    sentence: ``In applying paragraph (1), the Secretary
                    may specify exceptions to the 1 calendar year period
                    specified in such paragraph.''.
                (2) Part b.--Section 1835(a) of such Act (42 U.S.C.
            1395n(a)) is amended--
                        (A) in paragraph (1), by striking ``period of 3
                    calendar years'' and all that follows and inserting
                    ``period of 1 calendar year from which such services
                    are furnished; and''; and
                        (B) by adding at the end the following new
                    sentence: ``In applying paragraph (1), the Secretary
                    may specify exceptions to the 1 calendar year period
                    specified in such paragraph.''.
                (3) Parts c and d.--Section 1857(d) of such Act is amended
            by adding at the end the following new paragraph:
                ``(7) Period for submission of claims.--The contract shall
            require an MA organization or PDP sponsor to require any
            provider of services under contract with, in partnership with,
            or affiliated with such organization or sponsor to ensure that,
            with respect to items and services furnished by such provider
            to an enrollee of such organization, written request, signed by
            such enrollee, except in cases in which the Secretary finds it
            impracticable for the enrollee to do so, is filed for payment
            for such items and services in such form, in such manner, and
            by such person or persons as the Secretary may by regulation
            prescribe, no later than the close of the 1 calendar year
            period after such items and services are furnished. In applying
            the previous sentence, the Secretary may specify exceptions to
            the 1 calendar year period specified.''.
        (c) Effective Date.--The amendments made by subsection (b) shall be
    effective for items and services furnished on or after January 1, 2011.

    SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL EQUIPMENT OR HOME
                  HEALTH SERVICES REQUIRED TO BE MEDICARE ENROLLED
                  PHYSICIANS OR ELIGIBLE PROFESSIONALS.

        (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42
    U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and
    inserting ``physician enrolled under section 1866(j) or an eligible
    professional under section 1848(k)(3)(B)''.
        (b) Home Health Services.--
                (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C.
            1395(a)(2)) is amended in the matter preceding subparagraph (A)
            by inserting ``in the case of services described in
            subparagraph (C), a physician enrolled under section 1866(j) or
            an eligible professional under section 1848(k)(3)(B),'' before
            ``or, in the case of services''.
                (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C.
            1395n(a)(2)) is amended in the matter preceding subparagraph
            (A) by inserting ``, or in the case of services described in
            subparagraph (A), a physician enrolled under section 1866(j) or
            an eligible professional under section 1848(k)(3)(B),'' after
            ``a physician''.
        (c) Discretion to Expand Application.--The Secretary may extend the
    requirement applied by the amendments made by subsections (a) and (b)
    to durable medical equipment and home health services (relating to
    requiring certifications and written orders to be made by enrolled
    physicians and health professions) to other categories of items or
    services under this title, including covered part D drugs as defined in
    section 1860D-2(e), if the Secretary determines that such application
    would help to reduce the risk of waste, fraud, and abuse with respect
    to such other categories under title XVIII of the Social Security Act.
        (d) Effective Date.--The amendments made by this section shall
    apply to written orders and certifications made on or after July 1,
    2010.

    SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON
                  REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

        (a) Physicians and Other Suppliers.--Section 1842(h) of the Social
    Security Act, is amended by adding at the end the following new
    paragraph
        ``(10) The Secretary may disenroll, for a period of not more than
    one year for each act, a physician or supplier under section 1866(j) if
    such physician or supplier fails to maintain and, upon request of the
    Secretary, provide access to documentation relating to written orders
    or requests for payment for durable medical equipment, certifications
    for home health services, or referrals for other items or services
    written or ordered by such physician or supplier under this title, as
    specified by the Secretary.''.
        (b) Providers of Services.--Section 1866(a)(1) of such Act (42
    U.S.C. 1395cc), is amended--
                (1) in subparagraph (U), by striking at the end ``and'';
                (2) in subparagraph (V), by striking the period at the end
            and adding ``; and''; and
                (3) by adding at the end the following new subparagraph:
                        ``(W) maintain and, upon request of the Secretary,
                    provide access to documentation relating to written
                    orders or requests for payment for durable medical
                    equipment, certifications for home health services, or
                    referrals for other items or services written or
                    ordered by the provider under this title, as specified
                    by the Secretary.''.
        (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the
    Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting
    ``, ordering, referring for furnishing, or certifying the need for''
    after ``furnishing''.
        (d) Effective Date.--The amendments made by this section shall
    apply to orders, certifications, and referrals made on or after January
    1, 2010.

    SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE
                  PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH
                  SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

        (a) Condition of Payment for Home Health Services.--
                (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                        (A) by striking ``and such services'' and inserting
                    ``such services''; and
                        (B) by inserting after ``care of a physician'' the
                    following: ``, and, in the case of a certification or
                    recertification made by a physician after January 1,
                    2010, prior to making such certification the physician
                    must document that the physician has had a face-to-face
                    encounter (including through use of telehealth and
                    other than with respect to encounters that are incident
                    to services involved) with the individual during the 6-
                    month period preceding such certification, or other
                    reasonable timeframe as determined by the Secretary''.
                (2) Part b.--Section 1835(a)(2)(A) of the Social Security
            Act is amended--
                        (A) by striking ``and'' before ``(iii)''; and
                        (B) by inserting after ``care of a physician'' the
                    following: ``, and (iv) in the case of a certification
                    or recertification after January 1, 2010, prior to
                    making such certification the physician must document
                    that the physician has had a face-to-face encounter
                    (including through use of telehealth and other than
                    with respect to encounters that are incident to
                    services involved) with the individual during the 6-
                    month period preceding such certification or
                    recertification, or other reasonable timeframe as
                    determined by the Secretary''.
        (b) Condition of Payment for Durable Medical Equipment.--Section
    1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B))
    is amended by adding before the period at the end the following: ``and
    shall require that such an order be written pursuant to the physician
    documenting that the physician has had a face-to-face encounter
    (including through use of telehealth and other than with respect to
    encounters that are incident to services involved) with the individual
    involved during the 6-month period preceding such written order, or
    other reasonable timeframe as determined by the Secretary''.
        (c) Application to Other Areas Under Medicare.--The Secretary may
    apply the face-to-face encounter requirement described in the
    amendments made by subsections (a) and (b) to other items and services
    for which payment is provided under title XVIII of the Social Security
    Act based upon a finding that such an decision would reduce the risk of
    waste, fraud, or abuse.
        (d) Application to Medicaid and CHIP.--The requirements pursuant to
    the amendments made by subsections (a) and (b) shall apply in the case
    of physicians making certifications for home health services under
    title XIX or XXI of the Social Security Act, in the same manner and to
    the same extent as such requirements apply in the case of physicians
    making such certifications under title XVIII of such Act.

    SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AUTHORITY TO PROGRAM
                  EXCLUSION INVESTIGATIONS.

        (a) In General.--Section 1128(f) of the Social Security Act (42
    U.S.C. 1320a-7(f)) is amended by adding at the end the following new
    paragraph:
        ``(4) The provisions of subsections (d) and (e) of section 205
    shall apply with respect to this section to the same extent as they are
    applicable with respect to title II. The Secretary may delegate the
    authority granted by section 205(d) (as made applicable to this
    section) to the Inspector General of the Department of Health and Human
    Services or the Administrator of the Centers for Medicare & Medicaid
    Services for purposes of any investigation under this section.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to investigations beginning on or after January 1, 2010.

    SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND MEDICAID OVERPAYMENTS.

        Section 1128G of the Social Security Act, as inserted by section
    1631 and amended by section 1632, is further amended by adding at the
    end the following new subsection:
        ``(c) Reports on and Repayment of Overpayments Identified Through
    Internal Audits and Reviews.--
                ``(1) Reporting and returning overpayments.--If a person
            knows of an overpayment, the person must--
                        ``(A) report and return the overpayment to the
                    Secretary, the State, an intermediary, a carrier, or a
                    contractor, as appropriate, at the correct address, and
                        ``(B) notify the Secretary, the State,
                    intermediary, carrier, or contractor to whom the
                    overpayment was returned in writing of the reason for
                    the overpayment.
                ``(2) Timing.--An overpayment must be reported and returned
            under paragraph (1)(A) by not later than the date that is 60
            days after the date the person knows of the overpayment.
            Any known overpayment retained later than the applicable date
            specified in this paragraph creates an obligation as defined in
            section 3729(b)(3) of title 31 of the United States Code.
                ``(3) Clarification.--Repayment of any overpayments (or
            refunding by withholding of future payments) by a provider of
            services or supplier does not otherwise limit the provider or
            supplier's potential liability for administrative obligations
            such as applicable interests, fines, and specialties or civil
            or criminal sanctions involving the same claim if it is
            determined later that the reason for the overpayment was
            related to fraud by the provider or supplier or the employees
            or agents of such provider or supplier.
                ``(4) Definitions.--In this subsection:
                        ``(A) Knows.--The term `knows' has the meaning
                    given the terms `knowing' and `knowingly' in section
                    3729(b) of title 31 of the United States Code.
                        ``(B) Overpayment.--The term ``overpayment'' means
                    any finally determined funds that a person receives or
                    retains under title XVIII, XIX, or XXI to which the
                    person, after applicable reconciliation, is not
                    entitled under such title.
                        ``(C) Person.--The term `person' means a provider
                    of services, supplier, Medicaid managed care
                    organization (as defined in section 1903(m)(1)(A)),
                    Medicare Advantage organization (as defined in section
                    1859(a)(1)), or PDP sponsor (as defined in section
                    1860D-41(a)(13)), but excluding a beneficiary.''.

    SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIVERS FOR OIG EXCLUSIONS
                  TO BENEFICIARIES OF ANY FEDERAL HEALTH CARE PROGRAM.

        Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
    7(c)(3)(B)) is amended by striking ``individuals entitled to benefits
    under part A of title XVIII or enrolled under part B of such title, or
    both'' and inserting ``beneficiaries (as defined in section
    1128A(i)(5)) of that program''.

    SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL DIALYSIS FACILITIES.

        Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is
    amended by adding at the end the following new paragraph:
        ``(15) For purposes of evaluating or auditing payments made to
    renal dialysis facilities for items and services under this section
    under paragraph (1), each such renal dialysis facility, upon the
    request of the Secretary, shall provide to the Secretary access to
    information relating to any ownership or compensation arrangement
    between such facility and the medical director of such facility or
    between such facility and any physician.''.

    SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES
                  REQUIRED TO REGISTER UNDER MEDICARE.

        (a) Medicare.--Section 1866(j)(1) of the Social Security Act (42
    U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new
    subparagraph:
                        ``(D) Billing agents and clearinghouses required to
                    be registered under medicare.--Any agent,
                    clearinghouse, or other alternate payee that submits
                    claims on behalf of a health care provider must be
                    registered with the Secretary in a form and manner
                    specified by the Secretary.''.
        (b) Medicaid.--For a similar provision with respect to the Medicaid
    program under title XIX of the Social Security Act, see section 1759.
        (c) Effective Date.--The amendment made by subsection (a) shall
    apply to claims submitted on or after January 1, 2012.

    SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO FALSE CLAIMS ACT
                  AMENDMENTS.

        Section 1128A of the Social Security Act, as amended by sections
    1611, 1612, 1613, and 1615, is further amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), by striking ``to an officer,
                    employee, or agent of the United States, or of any
                    department or agency thereof, or of any State agency
                    (as defined in subsection (i)(1))'';
                        (B) in paragraph (4)--
                                (i) in the matter preceding subparagraph
                            (A), by striking ``participating in a program
                            under title XVIII or a State health care
                            program'' and inserting ``participating in a
                            Federal health care program (as defined in
                            section 1128B(f))''; and
                                (ii) in subparagraph (A), by striking
                            ``title XVIII or a State health care program''
                            and inserting ``a Federal health care program
                            (as defined in section 1128B(f))'';
                        (C) by striking ``or'' at the end of paragraph
                    (10);
                        (D) by inserting after paragraph (11) the following
                    new paragraphs:
                ``(12) conspires to commit a violation of this section; or
                ``(13) knowingly makes, uses, or causes to be made or used,
            a false record or statement material to an obligation to pay or
            transmit money or property to a Federal health care program, or
            knowingly conceals or knowingly and improperly avoids or
            decreases an obligation to pay or transmit money or property to
            a Federal health care program;''; and
                        (E) in the matter following paragraph (13), as
                    inserted by subparagraph (D)--
                                (i) by striking ``or'' before ``in cases
                            under paragraph (11)''; and
                                (ii) by inserting ``, in cases under
                            paragraph (12), $50,000 for any violation
                            described in this section committed in
                            furtherance of the conspiracy involved; or in
                            cases under paragraph (13), $50,000 for each
                            false record or statement, or concealment,
                            avoidance, or decrease'' after ``by an excluded
                            individual''; and
                        (F) in the second sentence, by striking ``such
                    false statement, omission, or misrepresentation)'' and
                    inserting ``such false statement or misrepresentation,
                    in cases under paragraph (12), an assessment of not
                    more than 3 times the total amount that would otherwise
                    apply for any violation described in this section
                    committed in furtherance of the conspiracy involved, or
                    in cases under paragraph (13), an assessment of not
                    more than 3 times the total amount of the obligation to
                    which the false record or statement was material or
                    that was avoided or decreased)''.
                (2) in subsection (c)(1), by striking ``six years'' and
            inserting ``10 years''; and
                (3) in subsection (i)--
                        (A) by amending paragraph (2) to read as follows:
                ``(2) The term `claim' means any application, request, or
            demand, whether under contract, or otherwise, for money or
            property for items and services under a Federal health care
            program (as defined in section 1128B(f)), whether or not the
            United States or a State agency has title to the money or
            property, that--
                        ``(A) is presented or caused to be presented to an
                    officer, employee, or agent of the United States, or of
                    any department or agency thereof, or of any State
                    agency (as defined in subsection (i)(1)); or
                        ``(B) is made to a contractor, grantee, or other
                    recipient if the money or property is to be spent or
                    used on the Federal health care program's behalf or to
                    advance a Federal health care program interest, and if
                    the Federal health care program--
                                ``(i) provides or has provided any portion
                            of the money or property requested or demanded;
                            or
                                ``(ii) will reimburse such contractor,
                            grantee, or other recipient for any portion of
                            the money or property which is requested or
                            demanded.'';
                        (B) by amending paragraph (3) to read as follows:
                ``(3) The term `item or service' means, without limitation,
            any medical, social, management, administrative, or other item
            or service used in connection with or directly or indirectly
            related to a Federal health care program.'';
                        (C) in paragraph (6)--
                                (i) in subparagraph (C), by striking at the
                            end ``or'';
                                (ii) in the first subparagraph (D), by
                            striking at the end the period and inserting
                            ``; or''; and
                                (iii) by redesignating the second
                            subparagraph (D) as a subparagraph (E);
                        (D) by amending paragraph (7) to read as follows:
                ``(7) The terms `knowing', `knowingly', and `should know'
            mean that a person, with respect to information--
                        ``(A) has actual knowledge of the information;
                        ``(B) acts in deliberate ignorance of the truth or
                    falsity of the information; or
                        ``(C) acts in reckless disregard of the truth or
                    falsity of the information;
            and require no proof of specific intent to defraud.''; and
                        (E) by adding at the end the following new
                    paragraphs:
                ``(8) The term `obligation' means an established duty,
            whether or not fixed, arising from an express or implied
            contractual, grantor-grantee, or licensor-licensee
            relationship, from a fee-based or similar relationship, from
            statute or regulation, or from the retention of any
            overpayment.
                ``(9) The term `material' means having a natural tendency
            to influence, or be capable of influencing, the payment or
            receipt of money or property.''.

     Subtitle D--Access to Information Needed to Prevent Fraud, Waste, and
                                     Abuse

    SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDENTIFY FRAUD, WASTE,
                  AND ABUSE.

        Section 1128G of the Social Security Act, as added by section 1631
    and amended by sections 1632 and 1641, is further amended by adding at
    the end the following new subsection;
        ``(d) Access to Information Necessary to Identify Fraud, Waste, and
    Abuse.--For purposes of law enforcement activity, and to the extent
    consistent with applicable disclosure, privacy, and security laws,
    including the Health Insurance Portability and Accountability Act of
    1996 and the Privacy Act of 1974, and subject to any information
    systems security requirements enacted by law or otherwise required by
    the Secretary, the Attorney General shall have access, facilitation by
    the Inspector General of the Department of Health and Human Services,
    to claims and payment data relating to titles XVIII and XIX, in
    consultation with the Centers for Medicare & Medicaid Services or the
    owner of such data.''.

    SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY
                  AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER
                  DATA BANK.

        (a) In General.--To eliminate duplication between the Healthcare
    Integrity and Protection Data Bank (HIPDB) established under section
    1128E of the Social Security Act and the National Practitioner Data
    Bank (NPBD) established under the Health Care Quality Improvement Act
    of 1986, section 1128E of the Social Security Act (42 U.S.C. 1320a-7e)
    is amended--
                (1) in subsection (a), by striking ``Not later than'' and
            inserting ``Subject to subsection (h), not later than'';
                (2) in the first sentence of subsection (d)(2), by striking
            ``(other than with respect to requests by Federal agencies)'';
            and
                (3) by adding at the end the following new subsection:
        ``(h) Sunset of the Healthcare Integrity and Protection Data Bank;
    Transition Process.--Effective upon the enactment of this subsection,
    the Secretary shall implement a process to eliminate duplication
    between the Healthcare Integrity and Protection Data Bank (in this
    subsection referred to as the `HIPDB' established pursuant to
    subsection (a) and the National Practitioner Data Bank (in this
    subsection referred to as the `NPDB') as implemented under the Health
    Care Quality Improvement Act of 1986 and section 1921 of this Act,
    including systems testing necessary to ensure that information formerly
    collected in the HIPDB will be accessible through the NPDB, and other
    activities necessary to eliminate duplication between the two data
    banks. Upon the completion of such process, notwithstanding any other
    provision of law, the Secretary shall cease the operation of the HIPDB
    and shall collect information required to be reported under the
    preceding provisions of this section in the NPDB. Except as otherwise
    provided in this subsection, the provisions of subsections (a) through
    (g) shall continue to apply with respect to the reporting of (or
    failure to report), access to, and other treatment of the information
    specified in this section.''.
        (b) Elimination of the Responsibility of the HHS Office of the
    Inspector General.--Section 1128C(a)(1) of the Social Security Act (42
    U.S.C. 1320a-7c(a)(1)) is amended--
                (1) in subparagraph (C), by adding at the end ``and'';
                (2) in subparagraph (D), by striking at the end ``, and''
            and inserting a period; and
                (3) by striking subparagraph (E).
        (c) Special Provision for Access to the National Practitioner Data
    Bank by the Department of Veterans Affairs.--
                (1) In general.--Notwithstanding any other provision of
            law, during the one year period that begins on the effective
            date specified in subsection (e)(1), the information described
            in paragraph (2) shall be available from the National
            Practitioner Data Bank (described in section 1921 of the Social
            Security Act) to the Secretary of Veterans Affairs without
            charge.
                (2) Information described.--For purposes of paragraph (1),
            the information described in this paragraph is the information
            that would, but for the amendments made by this section, have
            been available to the Secretary of Veterans Affairs from the
            Healthcare Integrity and Protection Data Bank.
        (d) Funding.--Notwithstanding any provisions of this division,
    sections 1128E(d)(2) and 1817(k)(3) of the Social Security Act, or any
    other provision of law, there shall be available for carrying out the
    transition process under section 1128E(h) of the Social Security Act
    over the period required to complete such process, and for operation of
    the National Practitioner Data Bank until such process is completed,
    without fiscal year limitation--
                (1) any fees collected pursuant to section 1128E(d)(2) of
            such Act; and
                (2) such additional amounts as necessary, from
            appropriations available to the Secretary and to the Office of
            the Inspector General of the Department of Health and Human
            Services under clauses (i) and (ii), respectively, of section
            1817(k)(3)(A) of such Act, for costs of such activities during
            the first 12 months following the date of the enactment of this
            Act.
        (e) Effective Date.--The amendments made--
                (1) by subsection (a)(2) shall take effect on the first day
            after the Secretary of Health and Human Services certifies that
            the process implemented pursuant to section 1128E(h) of the
            Social Security Act (as added by subsection (a)(3)) is
            complete; and
                (2) by subsection (b) shall take effect on the earlier of
            the date specified in paragraph (1) or the first day of the
            second succeeding fiscal year after the fiscal year during
            which this Act is enacted.

    SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECURITY STANDARDS.

        The provisions of sections 262(a) and 264 of the Health Insurance
    Portability and Accountability Act of 1996 (and standards promulgated
    pursuant to such sections) and the Privacy Act of 1974 shall apply with
    respect to the provisions of this subtitle and amendments made by this
    subtitle.

                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

    SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME BELOW 133\1/3\
                  PERCENT OF THE FEDERAL POVERTY LEVEL.

        (a) Eligibility for Non-traditional Individuals With Income Below
    133 Percent of the Federal Poverty Level.--
                (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i) is amended--
                        (A) by striking ``or'' at the end of subclause
                    (VI);
                        (B) by adding ``or'' at the end of subclause (VII);
                    and
                        (C) by adding at the end the following new
                    subclause:
                                        ``(VIII) who are under 65 years of
                                    age, who are not described in a
                                    previous subclause of this clause, and
                                    who are in families whose income
                                    (determined using methodologies and
                                    procedures specified by the Secretary
                                    in consultation with the Health Choices
                                    Commissioner) does not exceed 133\1/3\
                                    percent of the income official poverty
                                    line (as defined by the Office of
                                    Management and Budget, and revised
                                    annually in accordance with section
                                    673(2) of the Omnibus Budget
                                    Reconciliation Act of 1981) applicable
                                    to a family of the size involved;''.
                (2) 100% fmap for non-traditional medicaid eligible
            individuals.--Section 1905 of such Act (42 U.S.C. 1396d) is
            amended--
                        (A) in the third sentence of subsection (b) by
                    inserting before the period at the end the following:
                    ``and with respect to amounts described in subsection
                    (y)''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(y) Additional Expenditures Subject to 100% FMAP.--For purposes
    of section 1905(b), the amounts described in this subsection are the
    following:
                ``(1) Amounts expended for medical assistance for
            individuals described in subclause (VIII) of section
            1902(a)(10)(A)(i).''.
                (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (VIII)
            of section 1902(a)(10)(A)(i) of the Social Security Act, as
            added by paragraph (1) of, and an increased FMAP under the
            amendment made by paragraph (2) for, an individual who has been
            provided medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
                (4) Conforming amendment.--Section 1903(f)(4) of the Social
            Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting
            ``1902(a)(10)(A)(i)(VIII),'' after ``1902(a)(10)(A)(i)(VII),''.
        (b) Eligibility for Traditional Medicaid Eligible Individuals With
    Income Not Exceeding 133\1/3\ Percent of the Federal Poverty Level.--
                (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i)), as amended by
            subsection (a), is amended--
                        (A) by striking ``or'' at the end of subclause
                    (VII);
                        (B) by adding ``or'' at the end of subclause
                    (VIII); and
                        (C) by adding at the end the following new
                    subclause:
                                        ``(IX) who are under 65 years of
                                    age, who would be eligible for medical
                                    assistance under the State plan under
                                    one of subclauses (I) through (VII)
                                    (based on the income standards,
                                    methodologies, and procedures in effect
                                    as of June 16, 2009) but for income and
                                    who are in families whose income does
                                    not exceed 133\1/3\ percent of the
                                    income official poverty line (as
                                    defined by the Office of Management and
                                    Budget, and revised annually in
                                    accordance with section 673(2) of the
                                    Omnibus Budget Reconciliation Act of
                                    1981) applicable to a family of the
                                    size involved;''.
                (2) 100% fmap for certain traditional medicaid eligible
            individuals.--Section 1905(y) of such Act (42 U.S.C. 1396d(b)),
            as added by subsection (a)(2)(B), is amended by inserting ``or
            (IX)'' after ``(VIII)''.
                (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (IX) of
            section 1902(a)(10)(A)(i) of the Social Security Act, as added
            by paragraph (1) of, and an increased FMAP under the amendment
            made by paragraph (2) for, an individual who has been provided
            medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
                (4) Conforming amendment.--Section 1903(f)(4) of the Social
            Security Act (42 U.S.C. 1396b(f)(4)), as amended by subsection
            (a)(4), is amended by inserting ``1902(a)(10)(A)(i)(IX),''
            after ``1902(a)(10)(A)(i)(VIII),''.
        (c) 100% Matching Rate for Temporary Coverage of Certain
    Newborns.--Section 1905(y) of such Act, as added by subsection
    (a)(2)(B), is amended--
                (1) in paragraph (1), by inserting before the period at the
            end the following: ``, and who is not provided medical
            assistance under section 1943(b)(2) of this title or section
            205(d)(1)(B) of the America's Affordable Health Choices Act of
            2009''; and
                (2) by adding at the end the following:
                ``(2) Amounts expended for medical assistance for children
            described in section 203(d)(1)(A) of the America's Affordable
            Health Choices Act of 2009 during the time period specified in
            such section.''.
        (d) Network Adequacy.--Section 1932(a)(2) of the Social Security
    Act (42 U.S.C. 1396u-2(a)(2)) is amended by adding at the end the
    following new subparagraph:
                        ``(D) Enrollment of non-traditional medicaid
                    eligibles.--A State may not require under paragraph (1)
                    the enrollment in a managed care entity of an
                    individual described in section 1902(a)(10)(A)(i)(VIII)
                    unless the State demonstrates, to the satisfaction of
                    the Secretary, that the entity, through its provider
                    network and other arrangements, has the capacity to
                    meet the health, mental health, and substance abuse
                    needs of such individuals.''.
        (e) Effective Date.--The amendments made by this section shall take
    effect on the first day of Y1, and shall apply with respect to items
    and services furnished on or after such date.

    SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CERTAIN MEDICAID ELIGIBLE
                  INDIVIDUALS.

        (a) In General.--Title XIX of the Social Security Act is amended by
    adding at the end the following new section:

        ``requirements and special rules for certain medicaid eligible
                                  individuals

        ``Sec. 1943.  (a) Coordination With NHI Exchange Through Memorandum
    of Understanding.--
                ``(1) In general.--The State shall enter into a Medicaid
            memorandum of understanding described in section 204(e)(4) of
            the America's Affordable Health Choices Act of 2009 with the
            Health Choices Commissioner, acting in consultation with the
            Secretary, with respect to coordinating the implementation of
            the provisions of subdivision A of such Act with the State plan
            under this title in order to ensure the enrollment of Medicaid
            eligible individuals in acceptable coverage. Nothing in this
            section shall be construed as permitting such memorandum to
            modify or vitiate any requirement of a State plan under this
            title.
                ``(2) Enrollment of exchange-referred individuals.--
                        ``(A) Non-traditional individuals.--Pursuant to
                    such memorandum the State shall accept without further
                    determination the enrollment under this title of an
                    individual determined by the Commissioner to be a non-
                    traditional Medicaid eligible individual. The State
                    shall not do any redeterminations of eligibility for
                    such individuals unless the periodicity of such
                    redeterminations is consistent with the periodicity for
                    redeterminations by the Commissioner of eligibility for
                    affordability credits under subtitle C of title II of
                    subdivision A of the America's Affordable Health
                    Choices Act of 2009, as specified under such
                    memorandum.
                        ``(B) Traditional individuals.--
                                ``(i) Regular enrollment option.--Pursuant
                            to such memorandum, insofar as the memorandum
                            has selected the option described in section
                            205(e)(3)(A) of the America's Affordable Health
                            Choices Act of 2009, the State shall accept
                            without further determination the enrollment
                            under this title of an individual determined by
                            the Commissioner to be a traditional Medicaid
                            eligible individual. The State may do
                            redeterminations of eligibility of such
                            individual consistent with such section and the
                            memorandum.
                                ``(ii) Presumptive eligibility option.--
                            Pursuant to such memorandum, insofar as the
                            memorandum has selected the option described in
                            section 205(e)(3)(B) of the America's
                            Affordable Health Choices Act of 2009, the
                            State shall provide for making medical
                            assistance available during the presumptive
                            eligibility period and shall, upon application
                            of the individual for medical assistance under
                            this title, promptly make a determination (and
                            subsequent redeterminations) of eligibility in
                            the same manner as if the individual had
                            applied directly to the State for such
                            assistance except that the State shall use the
                            income-related information used by the
                            Commissioner and provided to the State under
                            the memorandum in making the presumptive
                            eligibility determination to the maximum extent
                            feasible.
                ``(3) Determinations of eligibility for affordability
            credits.--If the Commissioner determines that a State Medicaid
            agency has the capacity to make determinations of eligibility
            for affordability credits under subtitle C of title II of
            subdivision A of the America's Affordable Health Choices Act of
            2009, under such memorandum--
                        ``(A) the State Medicaid agency shall conduct such
                    determinations for any Exchange-eligible individual who
                    requests such a determination;
                        ``(B) in the case that a State Medicaid agency
                    determines that an Exchange-eligible individual is not
                    eligible for affordability credits, the agency shall
                    forward the information on the basis of which such
                    determination was made to the Commissioner; and
                        ``(C) the Commissioner shall reimburse the State
                    Medicaid agency for the costs of conducting such
                    determinations.
        ``(b) Treatment of Certain Newborns.--
                ``(1) In general.--In the case of a child who is deemed
            under section 205(d)(1) of the America's Affordable Health
            Choices Act of 2009 to be a non-traditional Medicaid eligible
            individual and enrolled under this title pursuant to such
            section, the State shall provide for a determination, by not
            later than the end of the period referred to in subparagraph
            (A) of such section, of the child's eligibility for medical
            assistance under this title.
                ``(2) Extended treatment as traditional medicaid eligible
            individual.--In accordance with subparagraph (B) of section
            205(d)(1) of the America's Affordable Health Choices Act of
            2009, in the case of a child described in subparagraph (A) of
            such section who at the end of the period referred to in such
            subparagraph is not otherwise covered under acceptable
            coverage, the child shall be deemed (until such time as the
            child obtains such coverage or the State otherwise makes a
            determination of the child's eligibility for medical assistance
            under its plan under this title pursuant to paragraph (1)) to
            be a traditional Medicaid eligible individual described in
            section 1902(l)(1)(B).
        ``(c) Definitions .--In this section:
                ``(1) Medicaid eligible individuals.--In this section, the
            terms `Medicaid eligible individual', `traditional Medicaid
            eligible individual', and `non-traditional Medicaid eligible
            individual' have the meanings given such terms in section
            205(e)(5) of the America's Affordable Health Choices Act of
            2009.
                ``(2) Memorandum.--The term `memorandum' means a Medicaid
            memorandum of understanding under section 205(e)(4) of the
            America's Affordable Health Choices Act of 2009.
                ``(3) Y1.--The term `Y1' has the meaning given such term in
            section 100(c) of the America's Affordable Health Choices Act
            of 2009.''.
        (b) Conforming Amendments to Error Rate.--
                (1) Section 1903(u)(1)(D) of the Social Security Act (42
            U.S.C. 1396b(u)(1)(D)) is amended by adding at the end the
            following new clause:
        ``(vi) In determining the amount of erroneous excess payments,
    there shall not be included any erroneous payments made that are
    attributable to an error in an eligibility determination under subtitle
    C of title II of subdivision A of the America's Affordable Health
    Choices Act of 2009.''.
                (2) Section 2105(c)(11) of such Act (42 U.S.C.
            1397ee(c)(11)) is amended by adding at the end the following
            new sentence: ``Clause (vi) of section 1903(u)(1)(D) shall
            apply with respect to the application of such requirements
            under this title and title XIX.''.

    SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.

        (a) CHIP Maintenance of Effort.--Section 1902 of the Social
    Security Act (42 U.S.C. 1396a) is amended--
                (1) in subsection (a), as amended by section
            1631(b)(1)(D)--
                        (A) by striking ``and'' at the end of paragraph
                    (72);
                        (B) by striking the period at the end of paragraph
                    (73) and inserting ``; and''; and
                        (C) by inserting after paragraph (74) the following
                    new paragraph:
                ``(75) provide for maintenance of effort under the State
            child health plan under title XXI in accordance with subsection
            (gg).''; and
                (2) by adding at the end the following new subsection:
        ``(gg) CHIP Maintenance of Effort Requirement.--
                ``(1) In general.--Subject to paragraph (2), as a condition
            of its State plan under this title under subsection (a)(75) and
            receipt of any Federal financial assistance under section
            1903(a) for calendar quarters beginning after the date of the
            enactment of this subsection and before CHIP MOE termination
            date specified in paragraph (3), a State shall not have in
            effect eligibility standards, methodologies, or procedures
            under its State child health plan under title XXI (including
            any waiver under such title or under section 1115 that is
            permitted to continue effect) that are more restrictive than
            the eligibility standards, methodologies, or procedures,
            respectively, under such plan (or waiver) as in effect on June
            16, 2009.
                ``(2) Limitation.--Paragraph (1) shall not be construed as
            preventing a State from imposing a limitation described in
            section 2110(b)(5)(C)(i)(II) for a fiscal year in order to
            limit expenditures under its State child health plan under
            title XXI to those for which Federal financial participation is
            available under section 2105 for the fiscal year.
                ``(3) CHIP moe termination date.--In paragraph (1), the
            `CHIP MOE termination date' for a State is the date that is the
            first day of Y1 (as defined in section 100(c) of the America's
            Affordable Health Choices Act of 2009) or, if later, the first
            day after such date that both of the following determinations
            have been made:
                        ``(A) The Health Choices Commissioner has
                    determined that the Health Insurance Exchange has the
                    capacity to support the participation of CHIP enrollees
                    who are Exchange-eligible individuals (as defined in
                    section 202(b) of the America's Affordable Health
                    Choices Act of 2009),
                        ``(B) The Secretary has determined that such
                    Exchange, the State, and employers have procedures in
                    effect to ensure the timely transition without
                    interruption of coverage of CHIP enrollees from
                    assistance under title XXI to acceptable coverage (as
                    defined for purposes of such Act).
            In this paragraph, the term `CHIP enrollee' means a targeted
            low-income child or (if the State has elected the option under
            section 2112, a targeted low-income pregnant woman) who is or
            otherwise would be (but for acceptable coverage) eligible for
            child health assistance or pregnancy-related assistance,
            respectively, under the State child health plan referred to in
            paragraph (1).''.
        (b) Medicaid Maintenance of Effort; Simplifying and Coordinating
    Eligibility Rules Between Exchange and Medicaid.--
                (1) In general.--Section 1903 of such Act (42 U.S.C. 1396b)
            is amended by adding at the end the following new subsection:
        ``(aa) Maintenance of Medicaid Effort; Simplifying and Coordinating
    Eligibility Rules Between Health Insurance Exchange and Medicaid.--
                ``(1) Maintenance of effort.--A State is not eligible for
            payment under subsection (a) for a calendar quarter beginning
            after the date of the enactment of this subsection if
            eligibility standards, methodologies, or procedures under its
            plan under this title (including any waiver under this title or
            under section 1115 that is permitted to continue effect) that
            are more restrictive than the eligibility standards,
            methodologies, or procedures, respectively, under such plan (or
            waiver) as in effect on June 16, 2009. The Secretary shall
            extend such a waiver (including the availability of Federal
            financial participation under such waiver) for such period as
            may be required for a State to meet the requirement of the
            previous sentence.
                ``(2) Removal of asset test for certain eligibility
            categories.--
                        ``(A) In general.--A State is not eligible for
                    payment under subsection (a) for a calendar quarter
                    beginning on or after the first day of Y1 (as defined
                    in section 100(c) of the America's Affordable Health
                    Choices Act of 2009), if the State applies any asset or
                    resource test in determining (or redetermining)
                    eligibility of any individual on or after such first
                    day under any of the following:
                                ``(i) Subclause (I), (III), (IV), or (VI)
                            of section 1902(a)(10)(A)(i).
                                ``(ii) Subclause (II), (IX), (XIV) or
                            (XVII) of section 1902(a)(10)(A)(ii).
                                ``(iii) Section 1931(b).
                        ``(B) Overriding contrary provisions; references.--
                    The provisions of this title that prevent the waiver of
                    an asset or resource test described in subparagraph (A)
                    are hereby waived.
                        ``(C) References.--Any reference to a provision
                    described in a provision in subparagraph (A) shall be
                    deemed to be a reference to such provision as modified
                    through the application of subparagraphs (A) and
                    (B).''.
                (2) Conforming amendments.--(A) Section 1902(a)(10)(A) of
            such Act (42 U.S.C. 1396a(a)(10)(A)) is amended, in the matter
            before clause (i), by inserting ``subject to section
            1903(aa)(2),'' after ``(A)''.
                (B) Section 1931(b)(2) of such Act (42 U.S.C. 1396u-
            1(b)(1)) is amended by inserting ``subject to section
            1903(aa)(2)'' after ``and (3)''.
        (c) Standards for Benchmark Packages.--Section 1937(b) of such Act
    (42 U.S.C. 1396u-7(b)) is amended--
                (1) in paragraph (1), by inserting ``subject to paragraph
            (5)''; and
                (2) by adding at the end the following new paragraph:
                ``(5) Minimum standards.--Effective January 1, 2013, any
            benchmark benefit package (or benchmark equivalent coverage
            under paragraph (2)) must meet the minimum benefits and cost-
            sharing standards of a basic plan offered through the Health
            Insurance Exchange.''.

    SEC. 1704. REDUCTION IN MEDICAID DSH.

        (a) Report.--
                (1) In general.--Not later than January 1, 2016, the
            Secretary of Health and Human Services (in this title referred
            to as the ``Secretary'') shall submit to Congress a report
            concerning the extent to which, based upon the impact of the
            health care reforms carried out under subdivision A in reducing
            the number of uninsured individuals, there is a continued role
            for Medicaid DSH. In preparing the report, the Secretary shall
            consult with community-based health care networks serving low-
            income beneficiaries.
                (2) Matters to be included.--The report shall include the
            following:
                        (A) Recommendations.--Recommendations regarding--
                                (i) the appropriate targeting of Medicaid
                            DSH within States; and
                                (ii) the distribution of Medicaid DSH among
                            the States.
                        (B) Specification of dsh health reform
                    methodology.--The DSH Health Reform methodology
                    described in paragraph (2) of subsection (b) for
                    purposes of implementing the requirements of such
                    subsection.
                (3) Coordination with medicare dsh report.--The Secretary
            shall coordinate the report under this subsection with the
            report on Medicare DSH under section 1112.
                (4) Medicaid dsh.--In this section, the term ``Medicaid
            DSH'' means adjustments in payments under section 1923 of the
            Social Security Act for inpatient hospital services furnished
            by disproportionate share hospitals.
        (b) Medicaid DSH Reductions.--
                (1) In general.--The Secretary shall reduce Medicaid DSH so
            as to reduce total Federal payments to all States for such
            purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000
            in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.
                (2) DSH health reform methodology.--The Secretary shall
            carry out paragraph (1) through use of a DSH Health Reform
            methodology issued by the Secretary that imposes the largest
            percentage reductions on the States that--
                        (A) have the lowest percentages of uninsured
                    individuals (determined on the basis of audited
                    hospital cost reports) during the most recent year for
                    which such data are available; or
                        (B) do not target their DSH payments on--
                                (i) hospitals with high volumes of Medicaid
                            inpatients (as defined in section 1923(b)(1)(A)
                            of the Social Security Act (42 U.S.C. 1396r-
                            4(b)(1)(A)); and
                                (ii) hospitals that have high levels of
                            uncompensated care (excluding bad debt).
                (3) DSH allotment publications.--
                        (A) In general.--Not later than the publication
                    deadline specified in subparagraph (B), the Secretary
                    shall publish in the Federal Register a notice
                    specifying the DSH allotment to each State under
                    1923(f) of the Social Security Act for the respective
                    fiscal year specified in such subparagraph, consistent
                    with the application of the DSH Health Reform
                    methodology described in paragraph (2).
                        (B) Publication deadline.--The publication deadline
                    specified in this subparagraph is--
                                (i) January 1, 2016, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2017;
                                (ii) January 1, 2017, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2018; and
                                (iii) January 1, 2018, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2019.
        (c) Conforming Amendments.--
                (1) Section 1923(f) of the Social Security Act (42 U.S.C.
            1396r-4(f)) is amended--
                        (A) by redesignating paragraph (7) as paragraph
                    (8); and
                        (B) by inserting after paragraph (6) the following
                    new paragraph:
                ``(7) Special rule for fiscal years 2017, 2018, and 2019.--
                        ``(A) Fiscal year 2017.--Notwithstanding paragraph
                    (2), the total DSH allotments for all States for--
                                ``(i) fiscal year 2017, shall be the total
                            DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $1,500,000,000;
                                ``(ii) fiscal year 2018, shall be the total
                            DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $2,500,000,000; and
                                ``(iii) fiscal year 2019, shall be the
                            total DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $6,000,000,000.''.
                (2) Section 1923(b)(4) of such Act (42 U.S.C. 1396r-
            4(b)(4)) is amended by adding before the period the following:
            ``or to affect the authority of the Secretary to issue and
            implement the DSH Health Reform methodology under section
            1704(b)(2) of the America's Health Choices Act of 2009''.
        (d) Disproportionate Share Hospitals (DSH) and Essential Access
    Hospital (EAH) Non-Discrimination.--
                (1) In general.--Section 1923(d) of the Social Security Act
            (42 U.S.C. 1396r-4) is amended by adding at the end the
            following new paragraph:
                ``(4) No hospital may be defined or deemed as a
            disproportionate share hospital, or as an essential access
            hospital (for purposes of subsection (f)(6)(A)(iv), under a
            State plan under this title or subsection (b) of this section
            (including any waiver under section 1115) unless the hospital--
                        ``(A) provides services to beneficiaries under this
                    title without discrimination on the ground of race,
                    color, national origin, creed, source of payment,
                    status as a beneficiary under this title, or any other
                    ground unrelated to such beneficiary's need for the
                    services or the availability of the needed services in
                    the hospital; and
                        ``(B) makes arrangements for, and accepts,
                    reimbursement under this title for services provided to
                    eligible beneficiaries under this title.''.
                (2) Effective date.--The amendment made by subsection (a)
            shall be apply to expenditures made on or after July 1, 2010.

    SEC. 1705. EXPANDED OUTSTATIONING.

        (a) In General.--Section 1902(a)(55) of the Social Security Act (42
    U.S.C. 1396a(a)(55)) is amended by striking ``under subsection
    (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or
    (a)(10)(A)(ii)(IX)'' and inserting ``(including receipt and processing
    of applications of individuals for affordability credits under subtitle
    C of title II of subdivision A of the America's Affordable Health
    Choices Act of 2009 pursuant to a Medicaid memorandum of understanding
    under section 1943(a)(1))''.
        (b) Effective Date.--
                (1) Except as provided in paragraph (2), the amendment made
            by subsection (a) shall apply to services furnished on or after
            July 1, 2010, without regard to whether or not final
            regulations to carry out such amendment have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirement imposed
            by the amendment made by this section, the State plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

                             Subtitle B--Prevention

    SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERVICES.

        (a) Coverage.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by section 1701(a)(2)(B), is amended--
                (1) in subsection (a)(4)--
                        (A) by striking ``and'' before ``(C)''; and
                        (B) by inserting before the semicolon at the end
                    the following: ``and (D) preventive services described
                    in subsection (z)''; and
                (2) by adding at the end the following new subsection:
        ``(z) Preventive Services.--The preventive services described in
    this subsection are services not otherwise described in subsection (a)
    or (r) that the Secretary determines are--
                ``(1)(A) recommended with a grade of A or B by the Task
            Force for Clinical Preventive Services; or
                ``(B) vaccines recommended for use as appropriate by the
            Director of the Centers for Disease Control and Prevention; and
                ``(2) appropriate for individuals entitled to medical
            assistance under this title.''.
        (b) Conforming Amendment.--Section 1928 of such Act (42 U.S.C.
    1396s) is amended--
                (1) in subsection (c)(2)(B)(i), by striking ``the advisory
            committee referred to in subsection (e)'' and inserting ``the
            Director of the Centers for Disease Control and Prevention'';
                (2) in subsection (e), by striking ``Advisory Committee''
            and all that follows and inserting ``Director of the Centers
            for Disease Control and Prevention.''; and
                (3) by striking subsection (g).
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after July 1, 2010, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirements imposed
            by the amendments made by this section, the State plan shall
            not be regarded as failing to comply with the requirements of
            such title solely on the basis of its failure to meet these
            additional requirements before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1712. TOBACCO CESSATION.

        (a) Dropping Tobacco Cessation Exclusion From Covered Outpatient
    Drugs.--Section 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
    8(d)(2)) is amended--
                (1) by striking subparagraph (E);
                (2) in subparagraph (G), by inserting before the period at
            the end the following: ``, except agents approved by the Food
            and Drug Administration for purposes of promoting, and when
            used to promote, tobacco cessation''; and
                (3) by redesignating subparagraphs (F) through (K) as
            subparagraphs (E) through (J), respectively.
        (b) Effective Date.--The amendments made by this section shall
    apply to drugs and services furnished on or after January 1, 2010.

    SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITATION SERVICES.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by sections 1701(a)(2) and 1711(a), is amended--
                (1) in subsection (a)--
                        (A) in paragraph (27), by striking ``and'' at the
                    end;
                        (B) by redesignating paragraph (28) as paragraph
                    (29); and
                        (C) by inserting after paragraph (27) the following
                    new paragraph:
                ``(28) nurse home visitation services (as defined in
            subsection (aa)); and''; and
                (2) by adding at the end the following new subsection:
        ``(aa) The term `nurse home visitation services' means home visits
    by trained nurses to families with a first-time pregnant woman, or a
    child (under 2 years of age), who is eligible for medical assistance
    under this title, but only, to the extent determined by the Secretary
    based upon evidence, that such services are effective in one or more of
    the following:
                ``(1) Improving maternal or child health and pregnancy
            outcomes or increasing birth intervals between pregnancies.
                ``(2) Reducing the incidence of child abuse, neglect, and
            injury, improving family stability (including reduction in the
            incidence of intimate partner violence), or reducing maternal
            and child involvement in the criminal justice system.
                ``(3) Increasing economic self-sufficiency, employment
            advancement, school-readiness, and educational achievement, or
            reducing dependence on public assistance.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2010.
        (c) Construction.--Nothing in the amendments made by this section
    shall be construed as affecting the ability of a State under title XIX
    or XXI of the Social Security Act to provide nurse home visitation
    services as part of another class of items and services falling within
    the definition of medical assistance or child health assistance under
    the respective title, or as an administrative expenditure for which
    payment is made under section 1903(a) or 2105(a) of such Act,
    respectively, on or after the date of the enactment of this Act.

    SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

        (a) Coverage as Optional Categorically Needy Group.--
                (1) In general.--Section 1902(a)(10)(A)(ii) of the Social
            Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                        (A) in subclause (XVIII), by striking ``or'' at the
                    end;
                        (B) in subclause (XIX), by adding ``or'' at the
                    end; and
                        (C) by adding at the end the following new
                    subclause:
                ``(XX) who are described in subsection (hh) (relating to
            individuals who meet certain income standards);''.
                (2) Group described.--Section 1902 of such Act (42 U.S.C.
            1396a), as amended by section 1703, is amended by adding at the
            end the following new subsection:
        ``(hh)(1) Individuals described in this subsection are
    individuals--
                        ``(A) whose income does not exceed an income
                    eligibility level established by the State that does
                    not exceed the highest income eligibility level
                    established under the State plan under this title (or
                    under its State child health plan under title XXI) for
                    pregnant women; and
                        ``(B) who are not pregnant.
                ``(2) At the option of a State, individuals described in
            this subsection may include individuals who, had individuals
            applied on or before January 1, 2007, would have been made
            eligible pursuant to the standards and processes imposed by
            that State for benefits described in clause (XV) of the matter
            following subparagraph (G) of section subsection (a)(10)
            pursuant to a waiver granted under section 1115.
                ``(3) At the option of a State, for purposes of subsection
            (a)(17)(B), in determining eligibility for services under this
            subsection, the State may consider only the income of the
            applicant or recipient.''.
                (3) Limitation on benefits.--Section 1902(a)(10) of such
            Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following
            subparagraph (G)--
                        (A) by striking ``and (XIV)'' and inserting
                    ``(XIV)''; and
                        (B) by inserting ``, and (XV) the medical
                    assistance made available to an individual described in
                    subsection (hh) shall be limited to family planning
                    services and supplies described in section
                    1905(a)(4)(C) including medical diagnosis and treatment
                    services that are provided pursuant to a family
                    planning service in a family planning setting'' after
                    ``cervical cancer''.
                (4) Conforming amendments.--Section 1905(a) of such Act (42
            U.S.C. 1396d(a)), as amended by section 1731(c), is amended in
            the matter preceding paragraph (1)--
                        (A) in clause (xiii), by striking ``or'' at the
                    end;
                        (B) in clause (xiv), by adding ``or'' at the end;
                    and
                        (C) by inserting after clause (xiv) the following:
                                ``(xv) individuals described in section
                            1902(hh),''.
        (b) Presumptive Eligibility.--
                (1) In general.--Title XIX of the Social Security Act (42
            U.S.C. 1396 et seq.) is amended by inserting after section
            1920B the following:

             ``presumptive eligibility for family planning services

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

                               Subtitle C--Access

    SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS.

        (a) In General.--
                (1) Fee-for-service payments.--Section 1902(a)(13) of the
            Social Security Act (42 U.S.C. 1396b(a)(13)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (A);
                        (B) by adding ``and'' at the end of subparagraph
                    (B); and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(C) payment for primary care services (as defined
                    in section 1848(j)(5)(A), but applied without regard to
                    clause (ii) thereof) furnished by physicians (or for
                    services furnished by other health care professionals
                    that would be primary care services under such section
                    if furnished by a physician) at a rate not less than 80
                    percent of the payment rate applicable to such services
                    and physicians or professionals (as the case may be)
                    under part B of title XVIII for services furnished in
                    2010, 90 percent of such rate for services and
                    physicians (or professionals) furnished in 2011, and
                    100 percent of such payment rate for services and
                    physicians (or professionals) furnished in 2012 or a
                    subsequent year;''.
                (2) Under medicaid managed care plans.--Section 1923(f) of
            such Act (42 U.S.C. 1396u-2(f)) is amended--
                        (A) in the heading, by adding at the end the
                    following: ``; Adequacy of Payment for Primary Care
                    Services''; and
                        (B) by inserting before the period at the end the
                    following: ``and, in the case of primary care services
                    described in section 1902(a)(13)(C), consistent with
                    the minimum payment rates specified in such section
                    (regardless of the manner in which such payments are
                    made, including in the form of capitation or partial
                    capitation)''.
        (b) Increase in Payment Using 100% FMAP.--Section 1905(y), as added
    by section 1701(a)(2)(B) and as amended by section 1701(c)(2), is
    amended by adding at the end the following:
                ``(3)(A) The portion of the amounts expended for medical
            assistance for services described in section 1902(a)(13)(C)
            furnished on or after January 1, 2010, that is attributable to
            the amount by which the minimum payment rate required under
            such section (or, by application, section 1932(f)) exceeds the
            payment rate applicable to such services under the State plan
            as of June 16, 2009.
                ``(B) Subparagraphs (A) shall not be construed as
            preventing the payment of Federal financial participation based
            on the Federal medical assistance percentage for amounts in
            excess of those specified under such subparagraphs.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2010.

    SEC. 1722. MEDICAL HOME PILOT PROGRAM.

        (a) In General.--The Secretary of Health and Human Services shall
    establish under this section a medical home pilot program under which a
    State may apply to the Secretary for approval of a medical home pilot
    project described in subsection (b) (in this section referred to as a
    ``pilot project'') for the application of the medical home concept
    under title XIX of the Social Security Act. The pilot program shall
    operate for a period of up to 5 years.
        (b) Pilot Project Described.--
                (1) In general.--A pilot project is a project that applies
            one or more of the medical home models described in section
            1866E(a)(3) of the Social Security Act (as inserted by section
            1302(a)) or such other model as the Secretary may approve, to
            high need beneficiaries (including medically fragile children
            and high-risk pregnant women) who are eligible for medical
            assistance under title XIX of the Social Security Act. The
            Secretary shall provide for appropriate coordination of the
            pilot program under this section with the medical home pilot
            program under section 1866E of such Act.
                (2) Limitation.--A pilot project shall be for a duration of
            not more than 5 years.
        (c) Additional Incentives.--In the case of a pilot project, the
    Secretary may--
                (1) waive the requirements of section 1902(a)(1) of the
            Social Security Act (relating to statewideness) and section
            1902(a)(10)(B) of such Act (relating to comparability); and
                (2) increase to up to 90 percent (for the first 2 years of
            the pilot program) or 75 percent (for the next 3 years) the
            matching percentage for administrative expenditures (such as
            those for community care workers).
        (d) Medically Fragile Children.--In the case of a model involving
    medically fragile children, the model shall ensure that the patient-
    centered medical home services received by each child, in addition to
    fulfilling the requirements under 1866E(b)(1) of the Social Security
    Act, provide for continuous involvement and education of the parent or
    caregiver and for assistance to the child in obtaining necessary
    transitional care if a child's enrollment ceases for any reason.
        (e) Evaluation; Report.--
                (1) Evaluation.--The Secretary, using the criteria
            described in section 1866E(g)(1) of the Social Security Act (as
            inserted by section 1123), shall conduct an evaluation of the
            pilot program under this section.
                (2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under such paragraph.
        (f) Funding.--The additional Federal financial participation
    resulting from the implementation of the pilot program under this
    section may not exceed in the aggregate $1,235,000,000 over the 5-year
    period of the program.

    SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.

        (a) In General.--Section 1903(a)(2)(E) of the Social Security Act
    (42 U.S.C. 1396b(a)(2)), as added by section 201(b)(2)(A) of the
    Children's Health Insurance Program Reauthorization Act of 2009 (Public
    Law 111-3), is amended by inserting ``and other individuals'' after
    ``children of families''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to payment for translation or interpretation services furnished
    on or after January 1, 2010.

    SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by section 1713(a), is amended--
                (1) in subsection (a)--
                        (A) by redesignating paragraph (29) as paragraph
                    (30);
                        (B) in paragraph (28), by striking at the end
                    ``and''; and
                        (C) by inserting after paragraph (28) the following
                    new paragraph:
                ``(29) freestanding birth center services (as defined in
            subsection (l)(3)(A)) and other ambulatory services that are
            offered by a freestanding birth center (as defined in
            subsection (l)(3)(B)) and that are otherwise included in the
            plan; and''; and
                (2) in subsection (l), by adding at the end the following
            new paragraph:
        ``(3)(A) The term `freestanding birth center services' means
    services furnished to an individual at a freestanding birth center (as
    defined in subparagraph (B)), including by a licensed birth attendant
    (as defined in subparagraph (C)) at such center.
        ``(B) The term `freestanding birth center' means a health
    facility--
                ``(i) that is not a hospital; and
                ``(ii) where childbirth is planned to occur away from the
            pregnant woman's residence.
        ``(C) The term `licensed birth attendant' means an individual who
    is licensed or registered by the State involved to provide health care
    at childbirth and who provides such care within the scope of practice
    under which the individual is legally authorized to perform such care
    under State law (or the State regulatory mechanism provided by State
    law), regardless of whether the individual is under the supervision of,
    or associated with, a physician or other health care provider. Nothing
    in this subparagraph shall be construed as changing State law
    requirements applicable to a licensed birth attendant.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after the date of the
    enactment of this Act.

    SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER THE VACCINES FOR
                  CHILDREN PROGRAM.

        Section 1928(b)(2)(A)(iii)(I) of the Social Security Act (42 U.S.C.
    1396s(b)(2)(A)(iii)(I)) is amended--
                (1) by striking ``or a rural health clinic'' and inserting
            ``, a rural health clinic''; and
                (2) by inserting ``or a public health clinic,'' after
            ```1905(l)(1)),''.

                              Subtitle D--Coverage

    SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-INCOME HIV-INFECTED
                  INDIVIDUALS.

        (a) In General.--Section 1902 of the Social Security Act (42 U.S.C.
    1396a), as amended by section 1714(a)(1), is amended--
                (1) in subsection (a)(10)(A)(ii)--
                        (A) by striking ``or'' at the end of subclause
                    (XIX);
                        (B) by adding ``or'' at the end of subclause (XX);
                    and
                        (C) by adding at the end the following:
                ``(XXI) who are described in subsection (ii) (relating to
            HIV-infected individuals);''; and
                (2) by adding at the end, as amended by sections 1703 and
            1714(a), the following:
        ``(ii) individuals described in this subsection are individuals not
    described in subsection (a)(10)(A)(i)--
                ``(1) who have HIV infection;
                ``(2) whose income (as determined under the State plan
            under this title with respect to disabled individuals) does not
            exceed the maximum amount of income a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan; and
                ``(3) whose resources (as determined under the State plan
            under this title with respect to disabled individuals) do not
            exceed the maximum amount of resources a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan.''.
        (b) Enhanced Match.--The first sentence of section 1905(b) of such
    Act (42 U.S.C. 1396d(b)) is amended by striking ``section
    1902(a)(10)(A)(ii)(XVIII)'' and inserting ``subclause (XVIII) or (XX)
    of section 1902(a)(10)(A)(ii)''.
        (c) Conforming Amendments.--Section 1905(a) of such Act (42 U.S.C.
    1396d(a)) is amended, in the matter preceding paragraph (1)--
                (1) by striking ``or'' at the end of clause (xii);
                (2) by adding ``or'' at the end of clause (xiii); and
                (3) by inserting after clause (xiii) the following:
                                ``(xiv) individuals described in section
                            1902(ii),''.
        (d) Exemption From Funding Limitation for Territories.--Section
    1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is amended by
    adding at the end the following:
                ``(5) Disregarding medical assistance for optional low-
            income hiv-infected individuals.--The limitations under
            subsection (f) and the previous provisions of this subsection
            shall not apply to amounts expended for medical assistance for
            individuals described in section 1902(ii) who are only eligible
            for such assistance on the basis of section
            1902(a)(10)(A)(ii)(XX).''.
        (e) Effective Date; Sunset.--The amendments made by this section
    shall apply to expenditures for calendar quarters beginning on or after
    the date of the enactment of this Act, and before January 1, 2013,
    without regard to whether or not final regulations to carry out such
    amendments have been promulgated by such date.

    SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSISTANCE (TMA).

        Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42
    U.S.C. 1396a(e)(1)(B), 1396r-6(f)), as amended by section 5004(a)(1) of
    the American Recovery and Reinvestment Act of 2009 (Public Law 111-5),
    are each amended by striking ``December 31, 2010'' and inserting
    ``December 31, 2012''.

    SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COVERAGE UNDER CERTAIN
                  CHIP PROGRAMS.

        (a) In General.--Section 2102(b) of the Social Security Act (42
    U.S.C. 1397bb(b)) is amended by adding at the end the following new
    paragraph:
                ``(6) Requirement for 12-month continuous eligibility.--In
            the case of a State child health plan that provides child
            health assistance under this title through a means other than
            described in section 2101(a)(2), the plan shall provide for
            implementation under this title of the 12-month continuous
            eligibility option described in section 1902(e)(12) for
            targeted low-income children whose family income is below 200
            percent of the poverty line.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to determinations (and redeterminations) of eligibility made on
    or after January 1, 2010.

                             Subtitle E--Financing

    SEC. 1741. PAYMENTS TO PHARMACISTS.

        (a) Pharmacy Reimbursement Limits.--
                (1) In general.--Section 1927(e) of the Social Security Act
            (42 U.S.C. 1396r-8(e)) is amended--
                        (A) by striking paragraph (5) and inserting the
                    following:
                ``(5) Use of amp in upper payment limits.--The Secretary
            shall calculate the Federal upper reimbursement limit
            established under paragraph (4) as 130 percent of the weighted
            average (determined on the basis of manufacturer utilization)
            of monthly average manufacturer prices.''.
                (2) Definition of amp.--Section 1927(k)(1)(B) of such Act
            (42 U.S.C. 1396r-8(k)(1)(B)) is amended--
                        (B) in the heading, by striking ``extended to
                    wholesalers'' and inserting ``and other payments''; and
                        (C) by striking ``regard to'' and all that follows
                    through the period and inserting the following:
                    ``regard to--
                                ``(i) customary prompt pay discounts
                            extended to wholesalers;
                                ``(ii) bona fide service fees paid by
                            manufacturers;
                                ``(iii) reimbursement by manufacturers for
                            recalled, damaged, expired, or otherwise
                            unsalable returned goods, including
                            reimbursement for the cost of the goods and any
                            reimbursement of costs associated with return
                            goods handling and processing, reverse
                            logistics, and drug destruction;
                                ``(iv) sales directly to, or rebates,
                            discounts, or other price concessions provided
                            to, pharmacy benefit managers, managed care
                            organizations, health maintenance
                            organizations, insurers, mail order pharmacies
                            that are not open to all members of the public,
                            or long term care providers, provided that
                            these rebates, discounts, or price concessions
                            are not passed through to retail pharmacies;
                                ``(v) sales directly to, or rebates,
                            discounts, or other price concessions provided
                            to, hospitals, clinics, and physicians, unless
                            the drug is an inhalation, infusion, or
                            injectable drug, or unless the Secretary
                            determines, as allowed for in Agency
                            administrative procedures, that it is necessary
                            to include such sales, rebates, discounts, and
                            price concessions in order to obtain an
                            accurate AMP for the drug. Such a determination
                            shall not be subject to judicial review; or
                                ``(vi) rebates, discounts, and other price
                            concessions required to be provided under
                            agreements under subsections (f) and (g) of
                            section 1860D-2(f).''.
                (3) Manufacturer reporting requirements.--Section
            1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                        (A) in subparagraph (A), by adding at the end the
                    following new clause:
                                ``(iv) not later than 30 days after the
                            last day of each month of a rebate period under
                            the agreement, on the manufacturer's total
                            number of units that are used to calculate the
                            monthly average manufacturer price for each
                            covered outpatient drug.''.
                (4) Authority to promulgate regulation.--The Secretary of
            Health and Human Services may promulgate regulations to clarify
            the requirements for upper payment limits and for the
            determination of the average manufacturer price in an expedited
            manner. Such regulations may become effective on an interim
            final basis, pending opportunity for public comment.
                (5) Pharmacy reimbursements through december 31, 2010.--The
            specific upper limit under section 447.332 of title 42, Code of
            Federal Regulations (as in effect on December 31, 2006)
            applicable to payments made by a State for multiple source
            drugs under a State Medicaid plan shall continue to apply
            through December 31, 2010, for purposes of the availability of
            Federal financial participation for such payments.
        (b) Disclosure of Price Information to the Public.--Section
    1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                (1) in subparagraph (A)--
                        (A) in clause (i), in the matter preceding
                    subclause (I), by inserting ``month of a'' after
                    ``each''; and
                        (B) in the last sentence, by striking ``and
                    shall,'' and all that follows through the period; and
                (2) in subparagraph (D)(v), by inserting ``weighted''
            before ``average manufacturer prices''.

    SEC. 1742. PRESCRIPTION DRUG REBATES.

        (a) Additional Rebate for New Formulations of Existing Drugs.--
                (1) In general.--Section 1927(c)(2) of the Social Security
            Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end
            the following new subparagraph:
                        ``(C) Treatment of new formulations.--In the case
                    of a drug that is a line extension of a single source
                    drug or an innovator multiple source drug that is an
                    oral solid dosage form, the rebate obligation with
                    respect to such drug under this section shall be the
                    amount computed under this section for such new drug
                    or, if greater, the product of--
                                ``(i) the average manufacturer price of the
                            line extension of a single source drug or an
                            innovator multiple source drug that is an oral
                            solid dosage form;
                                ``(ii) the highest additional rebate
                            (calculated as a percentage of average
                            manufacturer price) under this section for any
                            strength of the original single source drug or
                            innovator multiple source drug; and
                                ``(iii) the total number of units of each
                            dosage form and strength of the line extension
                            product paid for under the State plan in the
                            rebate period (as reported by the State).
                    In this subparagraph, the term `line extension' means,
                    with respect to a drug, an extended release formulation
                    of the drug.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to drugs dispensed after December 31, 2009.
        (b) Increase Minimum Rebate Percentage for Single Source Drugs.--
    Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r-
    8(c)(1)(B)(i)) is amended--
                (1) in subclause (IV), by striking ``and'' at the end;
                (2) in subclause (V)--
                        (A) by inserting ``and before January 1, 2010''
                    after ``December 31, 1995,''; and
                        (B) by striking the period at the end and inserting
                    ``; and''; and
                (3) by adding at the end the following new subclause:
                                        ``(VI) after December 31, 2009, is
                                    22.1 percent.''.

    SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF
                  MEDICAID MANAGED CARE ORGANIZATIONS.

        (a) In General.--Section 1903(m)(2)(A) of the Social Security Act
    (42 U.S.C. 1396b(m)(2)(A)) is amended--
                (1) in clause (xi), by striking ``and'' at the end;
                (2) in clause (xii), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(xiii) such contract provides that the entity shall
            report to the State such information, on such timely and
            periodic basis as specified by the Secretary, as the State may
            require in order to include, in the information submitted by
            the State to a manufacturer under section 1927(b)(2)(A),
            information on covered outpatient drugs dispensed to
            individuals eligible for medical assistance who are enrolled
            with the entity and for which the entity is responsible for
            coverage of such drugs under this subsection.''.
        (b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C.
    1396r-8) is amended----
                (1) in the first sentence of subsection (b)(1)(A), by
            inserting before the period at the end the following: ``,
            including such drugs dispensed to individuals enrolled with a
            medicaid managed care organization if the organization is
            responsible for coverage of such drugs'';
                (2) in subsection (b)(2), by adding at the end the
            following new subparagraph:
                        ``(C) Reporting on mmco drugs.--On a quarterly
                    basis, each State shall report to the Secretary the
                    total amount of rebates in dollars received from
                    pharmacy manufacturers for drugs provided to
                    individuals enrolled with Medicaid managed care
                    organizations that contract under section 1903(m).'';
                    and
                (3) in subsection (j)--
                        (A) in the heading by striking ``Exemption'' and
                    inserting ``Special Rules''; and
                        (B) in paragraph (1), by striking ``not''.
        (c) Effective Date.--The amendments made by this section take
    effect on July 1, 2010, and shall apply to drugs dispensed on or after
    such date, without regard to whether or not final regulations to carry
    out such amendments have been promulgated by such date.

    SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDUCATION.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by sections 1701(a)(2), 1711(a), and 1713(a), is
    amended by adding at the end the following new subsection:
        ``(bb) Payment for Graduate Medical Education.--
                ``(1) In general.--The term `medical assistance' includes
            payment for costs of graduate medical education consistent with
            this subsection, whether provided in or outside of a hospital.
                ``(2) Submission of information.--For purposes of paragraph
            (1) and section 1902(a)(13)(A)(v), payment for such costs is
            not consistent with this subsection unless--
                        ``(A) the State submits to the Secretary, in a
                    timely manner and on an annual basis specified by the
                    Secretary, information on total payments for graduate
                    medical education and how such payments are being used
                    for graduate medical education, including--
                                ``(i) the institutions and programs
                            eligible for receiving the funding;
                                ``(ii) the manner in which such payments
                            are calculated;
                                ``(iii) the types and fields of education
                            being supported;
                                ``(iv) the workforce or other goals to
                            which the funding is being applied;
                                ``(v) State progress in meeting such goals;
                            and
                                ``(vi) such other information as the
                            Secretary determines will assist in carrying
                            out paragraphs (3) and (4); and
                        ``(B) such expenditures are made consistent with
                    such goals and requirements as are established under
                    paragraph (4).
                ``(3) Review of information.--The Secretary shall make the
            information submitted under paragraph (2) available to the
            Advisory Committee on Health Workforce Evaluation and
            Assessment (established under section 2261 of the Public Health
            Service Act). The Secretary and the Advisory Committee shall
            independently review the information submitted under paragraph
            (2), taking into account State and local workforce needs.
                ``(4) Specification of goals and requirements.--The
            Secretary shall specify by rule, initially published by not
            later than December 31, 2011--
                        ``(A) program goals for the use of funds described
                    in paragraph (1), taking into account recommendations
                    of the such Advisory Committee and the goals for
                    approved medical residency training programs described
                    in section 1886(h)(1)(B); and
                        ``(B) requirements for use of such funds consistent
                    with such goals.
            Such rule may be effective on an interim basis pending revision
            after an opportunity for public comment.''.
        (b) Conforming Amendment.--Section 1902(a)(13)(A) of such Act (42
    U.S.C. 1396a(a)(13)(A)) is amended--
                (1) by striking ``and'' at the end of clause (iii);
                (2) by striking ``; and'' and inserting ``, and''; and
                (3) by adding at the end the following new clause:
                                ``(v) in the case of hospitals and at the
                            option of a State, such rates may include, to
                            the extent consistent with section 1905(bb),
                            payment for graduate medical education; and''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act. Nothing in this
    section shall be construed as affecting payments made before such date
    under a State plan under title XIX of the Social Security Act for
    graduate medical education.

                      Subtitle F--Waste, Fraud, and Abuse

    SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS.

        (a) Medicaid Non-Payment for Certain Health Care-Acquired
    Conditions.--Section 1903(i) of the Social Security Act (42 U.S.C.
    1396b(i)) is amended--
                (1) by striking ``or'' at the end of paragraph (23);
                (2) by striking the period at the end of paragraph (24) and
            inserting ``; or''; and
                (3) by inserting after paragraph (24) the following new
            paragraph:
                ``(25) with respect to amounts expended for services
            related to the presence of a condition that could be identified
            by a secondary diagnostic code described in section
            1886(d)(4)(D)(iv) and for any health care acquired condition
            determined as a non-covered service under title XVIII.''.
        (b) Application to CHIP.--Section 2107(e)(1)(G) of such Act (42
    U.S.C. 1397gg(e)(1)(G)) is amended by striking ``and (17)'' and
    inserting ``(17), and (25)''.
        (c) Permission To Include Additional Health Care-Acquired
    Conditions.--Nothing in this section shall prevent a State from
    including additional health care-acquired conditions for non-payment in
    its Medicaid program under title XIX of the Social Security Act.
        (d) Effective Date.--The amendments made by this section shall
    apply to discharges occurring on or after January 1, 2010.

    SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICAID INTEGRITY
                  PROGRAM.

        Section 1936(c)(2)) of the Social Security Act (42 U.S.C. 1396u-
    7(c)(2)) is amended--
                (1) by redesignating subparagraph (D) as subparagraph (E);
            and
                (2) by inserting after subparagraph (C) the following new
            subparagraph:
                        ``(D) For the contract year beginning in 2011 and
                    each subsequent contract year, the entity provides
                    assurances to the satisfaction of the Secretary that
                    the entity will conduct periodic evaluations of the
                    effectiveness of the activities carried out by such
                    entity under the Program and will submit to the
                    Secretary an annual report on such activities.''.

    SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE
                  WASTE, FRAUD, AND ABUSE.

        Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as
    amended by sections 1631(b)(1) and 1703, is further amended--
                (1) in paragraph (74), by striking at the end ``and'';
                (2) in paragraph (75), by striking at the end the period
            and inserting ``; and''; and
                (3) by inserting after paragraph (75) the following new
            paragraph:
                ``(76) provide that any provider or supplier (other than a
            physician or nursing facility) providing services under such
            plan shall, subject to paragraph (5) of section 1874(d),
            establish a compliance program described in paragraph (1) of
            such section in accordance with such section.''.

    SEC. 1754. OVERPAYMENTS.

        (a) In General.--Section 1903(d)(2)(C) of the Social Security Act
    (42 U.S.C. 1396b(d)(2)(C)) is amended by inserting ``(or 1 year in the
    case of overpayments due to fraud)'' after ``60 days''.
        (b) Effective Date.--In the case overpayments discovered on or
    after the date of the enactment of this Act.

    SEC. 1755. MANAGED CARE ORGANIZATIONS.

        (a) Minimum Medical Loss Ratio.--
                (1) Medicaid.--Section 1903(m)(2)(A) of the Social Security
            Act (42 U.S.C. 1396b(m)(2)(A)), as amended by section
            1743(a)(3), is amended--
                        (A) by striking ``and'' at the end of clause (xii);
                        (B) by striking the period at the end of clause
                    (xiii) and inserting ``; and''; and
                        (C) by adding at the end the following new clause:
                ``(xiv) such contract has a medical loss ratio, as
            determined in accordance with a methodology specified by the
            Secretary that is a percentage (not less than 85 percent) as
            specified by the Secretary.''.
                (2) CHIP.--Section 2107(e)(1) of such Act (42 U.S.C.
            1397gg(e)(1)) is amended--
                        (A) by redesignating subparagraphs (H) through (L)
                    as subparagraphs (I) through (M); and
                        (B) by inserting after subparagraph (G) the
                    following new subparagraph:
                        ``(H) Section 1903(m)(2)(A)(xiv) (relating to
                    application of minimum loss ratios), with respect to
                    comparable contracts under this title.''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to contracts entered into or renewed on or after
            July 1, 2010.
        (b) Patient Encounter Data.--
                (1) In general.--Section 1903(m)(2)(A)(xi) of the Social
            Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by
            inserting ``and for the provision of such data to the State at
            a frequency and level of detail to be specified by the
            Secretary'' after ``patients''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply with respect to contract years beginning on or
            after January 1, 2010.

    SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID AND
                  CHIP IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN OR
                  CHILD HEALTH PLAN.

        (a) State Plan Requirement.--Section 1902(a)(39) of the Social
    Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting
    after ``1128A,'' the following: ``terminate the participation of any
    individual or entity in such program if (subject to such exceptions are
    permitted with respect to exclusion under sections 1128(b)(3)(C) and
    1128(d)(3)(B)) participation of such individual or entity is terminated
    under title XVIII, any other State plan under this title, or any child
    health plan under title XXI,''.
        (b) Application to CHIP.--Section 2107(e)(1)(A) of such Act (42
    U.S.C. 1397gg(e)(1)(A)) is amended by inserting before the period at
    the end the following: ``and section 1902(a)(39) (relating to exclusion
    and termination of participation)''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after January 1, 2011, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act or a child health
            plan under title XXI of such Act which the Secretary of Health
            and Human Services determines requires State legislation (other
            than legislation appropriating funds) in order for the plan to
            meet the additional requirement imposed by the amendments made
            by this section, the State plan or child health plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATION RELATING TO
                  CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

        (a) State Plan Requirement.--Section 1902(a) of the Social Security
    Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703, and
    1753, is further amended--
                (1) in paragraph (75), by striking at the end ``and'';
                (2) in paragraph (76), by striking at the end the period
            and inserting ``; and''; and
                (3) by inserting after paragraph (76) the following new
            paragraph:
                ``(77) provide that the State agency described in paragraph
            (9) exclude, with respect to a period, any individual or entity
            from participation in the program under the State plan if such
            individual or entity owns, controls, or manages an entity that
            (or if such entity is owned, controlled, or managed by an
            individual or entity that)--
                        ``(A) has unpaid overpayments under this title
                    during such period determined by the Secretary or the
                    State agency to be delinquent;
                        ``(B) is suspended or excluded from participation
                    under or whose participation is terminated under this
                    title during such period; or
                        ``(C) is affiliated with an individual or entity
                    that has been suspended or excluded from participation
                    under this title or whose participation is terminated
                    under this title during such period.''.
        (b) Child Health Plan Requirement.--Section 2107(e)(1)(A) of such
    Act (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is
    amended by striking ``section 1902(a)(39)'' and inserting ``sections
    1902(a)(39) and 1902(a)(77)''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after January 1, 2011, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act or a child health
            plan under title XXI of such Act which the Secretary of Health
            and Human Services determines requires State legislation (other
            than legislation appropriating funds) in order for the plan to
            meet the additional requirement imposed by the amendments made
            by this section, the State plan or child health plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER
                  MMIS TO DETECT FRAUD AND ABUSE.

        Section 1903(r)(1)(F) of the Social Security Act (42 U.S.C.
    1396b(r)(1)(F)) is amended by inserting after ``necessary'' the
    following: ``and including, for data submitted to the Secretary on or
    after July 1, 2010, data elements from the automated data system that
    the Secretary determines to be necessary for detection of waste, fraud,
    and abuse''.

    SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES
                  REQUIRED TO REGISTER UNDER MEDICAID.

        (a) In General.--Section 1902(a) of the Social Security Act (42
    U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703, 1753,
    and 1757, is further amended--
                (1) in paragraph (76); by striking at the end ``and'';
                (2) in paragraph (77), by striking the period at the end
            and inserting ``and''; and
                (3) by inserting after paragraph (77) the following new
            paragraph:
                ``(78) provide that any agent, clearinghouse, or other
            alternate payee that submits claims on behalf of a health care
            provider must register with the State and the Secretary in a
            form and manner specified by the Secretary under section
            1866(j)(1)(D).''.
        (b) Denial of Payment.--Section 1903(i) of such Act (42 U.S.C.
    1396b(i)), as amended by section 1753, is amended--
                (1) by striking ``or'' at the end of paragraph (24);
                (2) by striking the period at the end of paragraph (25) and
            inserting ``; or''; and
                (3) by inserting after paragraph (25) the following new
            paragraph:
                ``(26) with respect to any amount paid to a billing agent,
            clearinghouse, or other alternate payee that is not registered
            with the State and the Secretary as required under section
            1902(a)(78).''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to claims submitted on or
            after January 1, 2012, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirement imposed
            by the amendments made by this section, the State plan or child
            health plan shall not be regarded as failing to comply with the
            requirements of such title solely on the basis of its failure
            to meet this additional requirement before the first day of the
            first calendar quarter beginning after the close of the first
            regular session of the State legislature that begins after the
            date of the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RELATED MISCONDUCT.

        (a) In General.--Section 1903(i) of the Social Security Act (42
    U.S.C. 1396b(i)), as previously amended is amended--
                (1) by striking ``or'' at the end of paragraph (25);
                (2) by striking the period at the end of paragraph (26) and
            inserting a semicolon; and
                (3) by inserting after paragraph (26) the following new
            paragraphs:
                ``(27) with respect to any amount expended--
                        ``(A) on litigation in which a court imposes
                    sanctions on the State, its employees, or its counsel
                    for litigation-related misconduct; or
                        ``(B) to reimburse (or otherwise compensate) a
                    managed care entity for payment of legal expenses
                    associated with any action in which a court imposes
                    sanctions on the managed care entity for litigation-
                    related misconduct.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to amounts expended on or after January 1, 2010.

                  Subtitle G--Puerto Rico and the Territories

    SEC. 1771. PUERTO RICO AND TERRITORIES.

        (a) Increase in Cap.--
                (1) In general.--Section 1108(g) of the Social Security Act
            (42 U.S.C. 1308(g)) is amended--
                        (A) in paragraph (4) by striking ``and (3)'' and by
                    inserting ``(3), (6), and (7)''; and
                        (B) by inserting after paragraph (5), as added by
                    section 1731(d), the following new paragraph:
                ``(6) Fiscal years 2011 through 2019.--The amounts
            otherwise determined under this subsection for Puerto Rico, the
            Virgin Islands, Guam, the Northern Mariana Islands, and
            American Samoa for fiscal year 2011 and each succeeding fiscal
            year through fiscal year 2019 shall be increased by the
            percentage specified under section 1771(c) of the America's
            Affordable Health Choices Act of 2009 for purposes of this
            paragraph of the amounts otherwise determined under this
            section (without regard to this paragraph).
                ``(7) Fiscal year 2020 and subsequent fiscal years.--The
            amounts otherwise determined under this subsection for Puerto
            Rico, the Virgin Islands, Guam, the Northern Mariana Islands,
            and American Samoa for fiscal year 2020 and each succeeding
            fiscal year shall be the amount provided in paragraph (6) or
            this paragraph for the preceding fiscal year for the respective
            territory increased by the percentage increase referred to in
            paragraph (1)(B), rounded to the nearest $10,000 (or $100,000
            in the case of Puerto Rico).''.
                (2) Coordination with arra.--Section 5001(d) of the
            American Recovery and Reinvestment Act of 2009 shall not apply
            during any period for which section 1108(g)(6) of the Social
            Security Act, as added by paragraph (1), applies.
        (b) Increase in FMAP.--
                (1) In general.--Section 1905(b)(2) of the Social Security
            Act (42 U.S.C. 1396d(b)(2)) is amended by striking ``50 per
            centum'' and inserting ``for fiscal years 2011 through 2019,
            the percentage specified under section 1771(c) of the America's
            Affordable Health Choices Act of 2009 for purposes of this
            clause for such fiscal year and for subsequent fiscal years the
            percentage so specified for fiscal year 2019''.
                (2) Effective date.--The amendment made by subsection (a)
            shall apply to items and services furnished on or after October
            1, 2010.
        (c) Specification of Percentages.--The Secretary of Health and
    Human Services shall specify, before January 1, 2011, the percentages
    to be applied under section 1108(g)(6) of the Social Security Act, as
    added by subsection (a)(1), and under section 1905(b)(2) of such Act,
    as amended by subsection (b)(1), in a manner so that for the period
    beginning with 2011 and ending with 2019 the total estimated additional
    Federal expenditures resulting from the application of such percentages
    will be equal to $10,350,000,000.

                           Subtitle H--Miscellaneous

    SEC. 1781. TECHNICAL CORRECTIONS.

        (a) Technical Correction to Section 1144 of the Social Security
    Act.--The first sentence of section 1144(c)(3) of the Social Security
    Act (42 U.S.C. 1320b--14(c)(3)) is amended--
                (1) by striking ``transmittal''; and
                (2) by inserting before the period the following: ``as
            specified in section 1935(a)(4)''.
        (b) Clarifying Amendment to Section 1935 of the Social Security
    Act.--Section 1935(a)(4) of the Social Security Act (42 U.S.C. 1396u--
    5(a)(4)), as amended by section 113(b) of Public Law 110-275, is
    amended--
                (1) by striking the second sentence;
                (2) by redesignating the first sentence as a subparagraph
            (A) with appropriate indentation and with the following
            heading: ``In general'';
                (3) by adding at the end the following subparagraphs:
                        ``(B) Furnishing medical assistance with reasonable
                    promptness.--For the purpose of a State's obligation
                    under section 1902(a)(8) to furnish medical assistance
                    with reasonable promptness, the date of the electronic
                    transmission of low-income subsidy program data, as
                    described in section 1144(c), from the Commissioner of
                    Social Security to the State Medicaid Agency, shall
                    constitute the date of filing of such application for
                    benefits under the Medicare Savings Program.
                        ``(C) Determining availability of medical
                    assistance.--For the purpose of determining when
                    medical assistance will be made available, the State
                    shall consider the date of the individual's application
                    for the low income subsidy program to constitute the
                    date of filing for benefits under the Medicare Savings
                    Program.''.
        (c) Effective Date Relating to Medicaid Agency Consideration of
    Low-income Subsidy Application and Data Transmittal.--The amendments
    made by subsections (a) and (b) shall be effective as if included in
    the enactment of section 113(b) of Public Law 110-275.
        (d) Technical Correction to Section 605 of CHIPRA.--Section 605 of
    the Children's Health Insurance Program Reauthorization Act of 2009
    (Public Law 111-3) is amended by striking ``legal residents'' and
    inserting ``lawfully residing in the United States''.
        (e) Technical Correction to Section 1905 of the Social Security
    Act.--Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a))
    is amended by inserting ``or the care and services themselves, or
    both'' before ``(if provided in or after''.
        (f) Clarifying Amendment to Section 1115 of the Social Security
    Act.--Section 1115(a) of the Social Security Act (42 U.S.C. 1315(a)) is
    amended by adding at the end the following: ``If an experimental,
    pilot, or demonstration project that relates to title XIX is approved
    pursuant to any part of this subsection, such project shall be treated
    as part of the State plan, all medical assistance provided on behalf of
    any individuals affected by such project shall be medical assistance
    provided under the State plan, and all provisions of this Act not
    explicitly waived in approving such project shall remain fully
    applicable to all individuals receiving benefits under the State
    plan.''.

    SEC. 1782. EXTENSION OF QI PROGRAM.

        (a) In General.--Section 1902(a)(10)(E)(iv) of the Social Security
    Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is amended--
                (1) by striking ``sections 1933 and'' and by inserting
            ``section''; and
                (2) by striking ``December 2010'' and inserting ``December
            2012''.
        (b) Elimination of Funding Limitation.--
                (1) In general.--Section 1933 of such Act (42 U.S.C. 1396u-
            3) is amended--
                        (A) in subsection (a), by striking ``who are
                    selected to receive such assistance under subsection
                    (b)'';
                        (B) by striking subsections (b), (c), (e), and (g);
                        (C) in subsection (d), by striking ``furnished in a
                    State'' and all that follows and inserting ``the
                    Federal medical assistance percentage shall be equal to
                    100 percent.''; and
                        (D) by redesignating subsections (d) and (f) as
                    subsections (b) and (c), respectively.
                (2) Conforming amendment.--Section 1905(b) of such Act (42
            U.S.C. 1396d(b)) is amended by striking ``1933(d)'' and
            inserting ``1933(b)''.
                (3) Effective date.--The amendments made by paragraph (1)
            shall take effect on January 1, 2011.

                     TITLE VIII--REVENUE-RELATED PROVISIONS

    SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION OF INDIVIDUALS
                  LIKELY TO BE INELIGIBLE FOR THE LOW-INCOME ASSISTANCE
                  UNDER THE MEDICARE PRESCRIPTION DRUG PROGRAM TO ASSIST
                  SOCIAL SECURITY ADMINISTRATION'S OUTREACH TO ELIGIBLE
                  INDIVIDUALS.

        (a) In General.--Paragraph (19) of section 6103(l) of the Internal
    Revenue Code of 1986 is amended to read as follows:
                ``(19) Disclosures to facilitate identification of
            individuals likely to be ineligible for low-income subsidies
            under medicare prescription drug program to assist social
            security administration's outreach to eligible individuals.--
                        ``(A) In general.--Upon written request from the
                    Commissioner of Social Security, the following return
                    information (including such information disclosed to
                    the Social Security Administration under paragraph (1)
                    or (5)) shall be disclosed to officers and employees of
                    the Social Security Administration, with respect to any
                    taxpayer identified by the Commissioner of Social
                    Security--
                                ``(i) return information for the applicable
                            year from returns with respect to wages (as
                            defined in section 3121(a) or 3401(a)) and
                            payments of retirement income (as described in
                            paragraph (1) of this subsection),
                                ``(ii) unearned income information and
                            income information of the taxpayer from
                            partnerships, trusts, estates, and subchapter S
                            corporations for the applicable year,
                                ``(iii) if the individual filed an income
                            tax return for the applicable year, the filing
                            status, number of dependents, income from
                            farming, and income from self-employment, on
                            such return,
                                ``(iv) if the individual is a married
                            individual filing a separate return for the
                            applicable year, the social security number (if
                            reasonably available) of the spouse on such
                            return,
                                ``(v) if the individual files a joint
                            return for the applicable year, the social
                            security number, unearned income information,
                            and income information from partnerships,
                            trusts, estates, and subchapter S corporations
                            of the individual's spouse on such return, and
                                ``(vi) such other return information
                            relating to the individual (or the individual's
                            spouse in the case of a joint return) as is
                            prescribed by the Secretary by regulation as
                            might indicate that the individual is likely to
                            be ineligible for a low-income prescription
                            drug subsidy under section 1860D-14 of the
                            Social Security Act.
                        ``(B) Applicable year.--For the purposes of this
                    paragraph, the term `applicable year' means the most
                    recent taxable year for which information is available
                    in the Internal Revenue Service's taxpayer information
                    records.
                        ``(C) Restriction on individuals for whom
                    disclosure may be requested.--The Commissioner of
                    Social Security shall request information under this
                    paragraph only with respect to--
                                ``(i) individuals the Social Security
                            Administration has identified, using all other
                            reasonably available information, as likely to
                            be eligible for a low-income prescription drug
                            subsidy under section 1860D-14 of the Social
                            Security Act and who have not applied for such
                            subsidy, and
                                ``(ii) any individual the Social Security
                            Administration has identified as a spouse of an
                            individual described in clause (i).
                        ``(D) Restriction on use of disclosed
                    information.--Return information disclosed under this
                    paragraph may be used only by officers and employees of
                    the Social Security Administration solely for purposes
                    of identifying individuals likely to be ineligible for
                    a low-income prescription drug subsidy under section
                    1860D-14 of the Social Security Act for use in outreach
                    efforts under section 1144 of the Social Security
                    Act.''.
        (b) Safeguards.--Paragraph (4) of section 6103(p) of such Code is
    amended--
                (1) by striking ``(19),'' each place it appears, and
                (2) by striking ``or (17)'' each place it appears and
            inserting ``(17), or (19)''.
        (c) Conforming Amendment.--Paragraph (3) of section 6103(a) of such
    Code is amended by striking ``(19),''.
        (d) Effective Date.--The amendments made by this section shall
    apply to disclosures made after the date which is 12 months after the
    date of the enactment of this Act.

    SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND; FINANCING FOR
                  TRUST FUND.

        (a) Establishment of Trust Fund.--
                (1) In general.--Subchapter A of chapter 98 of the Internal
            Revenue Code of 1986 (relating to trust fund code) is amended
            by adding at the end the following new section:

    ``SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND.

        ``(a) Creation of Trust Fund.--There is established in the Treasury
    of the United States a trust fund to be known as the `Health Care
    Comparative Effectiveness Research Trust Fund' (hereinafter in this
    section referred to as the `CERTF'), consisting of such amounts as may
    be appropriated or credited to such Trust Fund as provided in this
    section and section 9602(b).
        ``(b) Transfers to Fund.--There are hereby appropriated to the
    Trust Fund the following:
                ``(1) For fiscal year 2010, $90,000,000.
                ``(2) For fiscal year 2011, $100,000,000.
                ``(3) For fiscal year 2012, $110,000,000.
                ``(4) For each fiscal year beginning with fiscal year
            2013--
                        ``(A) an amount equivalent to the net revenues
                    received in the Treasury from the fees imposed under
                    subchapter B of chapter 34 (relating to fees on health
                    insurance and self-insured plans) for such fiscal year;
                    and
                        ``(B) subject to subsection (c)(2), amounts
                    determined by the Secretary of Health and Human
                    Services to be equivalent to the fair share per capita
                    amount computed under subsection (c)(1) for the fiscal
                    year multiplied by the average number of individuals
                    entitled to benefits under part A, or enrolled under
                    part B, of title XVIII of the Social Security Act
                    during such fiscal year.
    The amounts appropriated under paragraphs (1), (2), (3), and (4)(B)
    shall be transferred from the Federal Hospital Insurance Trust Fund and
    from the Federal Supplementary Medical Insurance Trust Fund
    (established under section 1841 of such Act), and from the Medicare
    Prescription Drug Account within such Trust Fund, in proportion (as
    estimated by the Secretary) to the total expenditures during such
    fiscal year that are made under title XVIII of such Act from the
    respective trust fund or account.
        ``(c) Fair Share Per Capita Amount.--
                ``(1) Computation.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    fair share per capita amount under this paragraph for a
                    fiscal year (beginning with fiscal year 2013) is an
                    amount computed by the Secretary of Health and Human
                    Services for such fiscal year that, when applied under
                    this section and subchapter B of chapter 34 of the
                    Internal Revenue Code of 1986, will result in revenues
                    to the CERTF of $375,000,000 for the fiscal year.
                        ``(B) Alternative computation.--
                                ``(i) In general.--If the Secretary is
                            unable to compute the fair share per capita
                            amount under subparagraph (A) for a fiscal
                            year, the fair share per capita amount under
                            this paragraph for the fiscal year shall be the
                            default amount determined under clause (ii) for
                            the fiscal year.
                                ``(ii) Default amount.--The default amount
                            under this clause for--
                                        ``(I) fiscal year 2013 is equal to
                                    $2; or
                                        ``(II) a subsequent year is equal
                                    to the default amount under this clause
                                    for the preceding fiscal year increased
                                    by the annual percentage increase in
                                    the medical care component of the
                                    consumer price index (United States
                                    city average) for the 12-month period
                                    ending with April of the preceding
                                    fiscal year.
                            Any amount determined under subclause (II)
                            shall be rounded to the nearest penny.
                ``(2) Limitation on medicare funding.--In no case shall the
            amount transferred under subsection (b)(4)(B) for any fiscal
            year exceed $90,000,000.
        ``(d) Expenditures From Fund.--
                ``(1) In general.--Subject to paragraph (2), amounts in the
            CERTF are available, without the need for further
            appropriations and without fiscal year limitation, to the
            Secretary of Health and Human Services for carrying out section
            1181 of the Social Security Act.
                ``(2) Allocation for commission.--Not less than the
            following amounts in the CERTF for a fiscal year shall be
            available to carry out the activities of the Comparative
            Effectiveness Research Commission established under section
            1181(b) of the Social Security Act for such fiscal year:
                        ``(A) For fiscal year 2010, $7,000,000.
                        ``(B) For fiscal year 2011, $9,000,000.
                        ``(C) For each fiscal year beginning with 2012,
                    $10,000,000.
            Nothing in this paragraph shall be construed as preventing
            additional amounts in the CERTF from being made available to
            the Comparative Effectiveness Research Commission for such
            activities.
        ``(e) Net Revenues.--For purposes of this section, the term `net
    revenues' means the amount estimated by the Secretary based on the
    excess of--
                ``(1) the fees received in the Treasury under subchapter B
            of chapter 34, over
                ``(2) the decrease in the tax imposed by chapter 1
            resulting from the fees imposed by such subchapter.''.
                (2) Clerical amendment.--The table of sections for such
            subchapter A is amended by adding at the end thereof the
            following new item:

    ``Sec. 9511. Health Care Comparative Effectiveness Research Trust
                                Fund.''.
        (b) Financing for Fund From Fees on Insured and Self-Insured Health
    Plans.--
                (1) General rule.--Chapter 34 of the Internal Revenue Code
            of 1986 is amended by adding at the end the following new
            subchapter:

             ``Subchapter B--Insured and Self-Insured Health Plans

    ``Sec. 4375. Health insurance.
    ``Sec. 4376. Self-insured health plans.
    ``Sec. 4377. Definitions and special rules.

    ``SEC. 4375. HEALTH INSURANCE.

        ``(a) Imposition of Fee.--There is hereby imposed on each specified
    health insurance policy for each policy year a fee equal to the fair
    share per capita amount determined under section 9511(c)(1) multiplied
    by the average number of lives covered under the policy.
        ``(b) Liability for Fee.--The fee imposed by subsection (a) shall
    be paid by the issuer of the policy.
        ``(c) Specified Health Insurance Policy.--For purposes of this
    section:
                ``(1) In general.--Except as otherwise provided in this
            section, the term `specified health insurance policy' means any
            accident or health insurance policy issued with respect to
            individuals residing in the United States.
                ``(2) Exemption for certain policies.--The term `specified
            health insurance policy' does not include any insurance if
            substantially all of its coverage is of excepted benefits
            described in section 9832(c).
                ``(3) Treatment of prepaid health coverage arrangements.--
                        ``(A) In general.--In the case of any arrangement
                    described in subparagraph (B)--
                                ``(i) such arrangement shall be treated as
                            a specified health insurance policy, and
                                ``(ii) the person referred to in such
                            subparagraph shall be treated as the issuer.
                        ``(B) Description of arrangements.--An arrangement
                    is described in this subparagraph if under such
                    arrangement fixed payments or premiums are received as
                    consideration for any person's agreement to provide or
                    arrange for the provision of accident or health
                    coverage to residents of the United States, regardless
                    of how such coverage is provided or arranged to be
                    provided.

    ``SEC. 4376. SELF-INSURED HEALTH PLANS.

        ``(a) Imposition of Fee.--In the case of any applicable self-
    insured health plan for each plan year, there is hereby imposed a fee
    equal to the fair share per capita amount determined under section
    9511(c)(1) multiplied by the average number of lives covered under the
    plan.
        ``(b) Liability for Fee.--
                ``(1) In general.--The fee imposed by subsection (a) shall
            be paid by the plan sponsor.
                ``(2) Plan sponsor.--For purposes of paragraph (1) the term
            `plan sponsor' means--
                        ``(A) the employer in the case of a plan
                    established or maintained by a single employer,
                        ``(B) the employee organization in the case of a
                    plan established or maintained by an employee
                    organization,
                        ``(C) in the case of--
                                ``(i) a plan established or maintained by 2
                            or more employers or jointly by 1 or more
                            employers and 1 or more employee organizations,
                                ``(ii) a multiple employer welfare
                            arrangement, or
                                ``(iii) a voluntary employees' beneficiary
                            association described in section 501(c)(9),
                    the association, committee, joint board of trustees, or
                    other similar group of representatives of the parties
                    who establish or maintain the plan, or
                        ``(D) the cooperative or association described in
                    subsection (c)(2)(F) in the case of a plan established
                    or maintained by such a cooperative or association.
        ``(c) Applicable Self-Insured Health Plan.--For purposes of this
    section, the term `applicable self-insured health plan' means any plan
    for providing accident or health coverage if--
                ``(1) any portion of such coverage is provided other than
            through an insurance policy, and
                ``(2) such plan is established or maintained--
                        ``(A) by one or more employers for the benefit of
                    their employees or former employees,
                        ``(B) by one or more employee organizations for the
                    benefit of their members or former members,
                        ``(C) jointly by 1 or more employers and 1 or more
                    employee organizations for the benefit of employees or
                    former employees,
                        ``(D) by a voluntary employees' beneficiary
                    association described in section 501(c)(9),
                        ``(E) by any organization described in section
                    501(c)(6), or
                        ``(F) in the case of a plan not described in the
                    preceding subparagraphs, by a multiple employer welfare
                    arrangement (as defined in section 3(40) of Employee
                    Retirement Income Security Act of 1974), a rural
                    electric cooperative (as defined in section
                    3(40)(B)(iv) of such Act), or a rural telephone
                    cooperative association (as defined in section
                    3(40)(B)(v) of such Act).

    ``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

        ``(a) Definitions.--For purposes of this subchapter--
                ``(1) Accident and health coverage.--The term `accident and
            health coverage' means any coverage which, if provided by an
            insurance policy, would cause such policy to be a specified
            health insurance policy (as defined in section 4375(c)).
                ``(2) Insurance policy.--The term `insurance policy' means
            any policy or other instrument whereby a contract of insurance
            is issued, renewed, or extended.
                ``(3) United states.--The term `United States' includes any
            possession of the United States.
        ``(b) Treatment of Governmental Entities.--
                ``(1) In general.--For purposes of this subchapter--
                        ``(A) the term `person' includes any governmental
                    entity, and
                        ``(B) notwithstanding any other law or rule of law,
                    governmental entities shall not be exempt from the fees
                    imposed by this subchapter except as provided in
                    paragraph (2).
                ``(2) Treatment of exempt governmental programs.--In the
            case of an exempt governmental program, no fee shall be imposed
            under section 4375 or section 4376 on any covered life under
            such program.
                ``(3) Exempt governmental program defined.--For purposes of
            this subchapter, the term `exempt governmental program' means--
                        ``(A) any insurance program established under title
                    XVIII of the Social Security Act,
                        ``(B) the medical assistance program established by
                    title XIX or XXI of the Social Security Act,
                        ``(C) any program established by Federal law for
                    providing medical care (other than through insurance
                    policies) to individuals (or the spouses and dependents
                    thereof) by reason of such individuals being--
                                ``(i) members of the Armed Forces of the
                            United States, or
                                ``(ii) veterans, and
                        ``(D) any program established by Federal law for
                    providing medical care (other than through insurance
                    policies) to members of Indian tribes (as defined in
                    section 4(d) of the Indian Health Care Improvement
                    Act).
        ``(c) Treatment as Tax.--For purposes of subtitle F, the fees
    imposed by this subchapter shall be treated as if they were taxes.
        ``(d) No Cover Over to Possessions.--Notwithstanding any other
    provision of law, no amount collected under this subchapter shall be
    covered over to any possession of the United States.''.
                (2) Clerical amendments.--
                        (A) Chapter 34 of such Code is amended by striking
                    the chapter heading and inserting the following:

               ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

              ``subchapter a. policies issued by foreign insurers

             ``subchapter b. insured and self-insured health plans

             ``Subchapter A--Policies Issued By Foreign Insurers''.

                        (B) The table of chapters for subtitle D of such
                    Code is amended by striking the item relating to
                    chapter 34 and inserting the following new item:

              ``Chapter 34--Taxes on Certain Insurance Policies''.

                (3) Effective date.--The amendments made by this subsection
            shall apply with respect to policies and plans for portions of
            policy or plan years beginning on or after October 1, 2012.

                       TITLE IX--MISCELLANEOUS PROVISIONS

    SEC. 1901. REPEAL OF TRIGGER PROVISION.

        Subtitle A of title VIII of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 (Public Law 108-173) is
    repealed and the provisions of law amended by such subtitle are
    restored as if such subtitle had never been enacted.

    SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM.

        Section 1860C-1 of the Social Security Act (42 U.S.C. 1395w-29), as
    added by section 241(a) of the Medicare Prescription Drug, Improvement,
    and Modernization Act of 2003 (Public Law 108-173), is repealed.

    SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

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

    SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITATION PROGRAMS FOR
                  FAMILIES WITH YOUNG CHILDREN AND FAMILIES EXPECTING
                  CHILDREN.

        Part B of title IV of the Social Security Act (42 U.S.C. 621-629i)
    is amended by adding at the end the following:

           ``Subpart 3--Support for Quality Home Visitation Programs

    ``SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES WITH YOUNG CHILDREN
                  AND FAMILIES EXPECTING CHILDREN.

        ``(a) Purpose.--The purpose of this section is to improve the well-
    being, health, and development of children by enabling the
    establishment and expansion of high quality programs providing
    voluntary home visitation for families with young children and families
    expecting children.
        ``(b) Grant Application.--A State that desires to receive a grant
    under this section shall submit to the Secretary for approval, at such
    time and in such manner as the Secretary may require, an application
    for the grant that includes the following:
                ``(1) Description of home visitation programs.--A
            description of the high quality programs of home visitation for
            families with young children and families expecting children
            that will be supported by a grant made to the State under this
            section, the outcomes the programs are intended to achieve, and
            the evidence supporting the effectiveness of the programs.
                ``(2) Results of needs assessment.--The results of a
            statewide needs assessment that describes--
                        ``(A) the number, quality, and capacity of home
                    visitation programs for families with young children
                    and families expecting children in the State;
                        ``(B) the number and types of families who are
                    receiving services under the programs;
                        ``(C) the sources and amount of funding provided to
                    the programs;
                        ``(D) the gaps in home visitation in the State,
                    including identification of communities that are in
                    high need of the services; and
                        ``(E) training and technical assistance activities
                    designed to achieve or support the goals of the
                    programs.
                ``(3) Assurances.--Assurances from the State that--
                        ``(A) in supporting home visitation programs using
                    funds provided under this section, the State shall
                    identify and prioritize serving communities that are in
                    high need of such services, especially communities with
                    a high proportion of low-income families or a high
                    incidence of child maltreatment;
                        ``(B) the State will reserve 5 percent of the grant
                    funds for training and technical assistance to the home
                    visitation programs using such funds;
                        ``(C) in supporting home visitation programs using
                    funds provided under this section, the State will
                    promote coordination and collaboration with other home
                    visitation programs (including programs funded under
                    title XIX) and with other child and family services,
                    health services, income supports, and other related
                    assistance;
                        ``(D) home visitation programs supported using such
                    funds will, when appropriate, provide referrals to
                    other programs serving children and families; and
                        ``(E) the State will comply with subsection (i),
                    and cooperate with any evaluation conducted under
                    subsection (j).
                ``(4) Other information.--Such other information as the
            Secretary may require.
        ``(c) Allotments.--
                ``(1) Indian tribes.--From the amount reserved under
            subsection (l)(2) for a fiscal year, the Secretary shall allot
            to each Indian tribe that meets the requirement of subsection
            (d), if applicable, for the fiscal year the amount that bears
            the same ratio to the amount so reserved as the number of
            children in the Indian tribe whose families have income that
            does not exceed 200 percent of the poverty line bears to the
            total number of children in such Indian tribes whose families
            have income that does not exceed 200 percent of the poverty
            line.
                ``(2) States and territories.--From the amount appropriated
            under subsection (m) for a fiscal year that remains after
            making the reservations required by subsection (l), the
            Secretary shall allot to each State that is not an Indian tribe
            and that meets the requirement of subsection (d), if
            applicable, for the fiscal year the amount that bears the same
            ratio to the remainder of the amount so appropriated as the
            number of children in the State whose families have income that
            does not exceed 200 percent of the poverty line bears to the
            total number of children in such States whose families have
            income that does not exceed 200 percent of the poverty line.
                ``(3) Reallotments.--The amount of any allotment to a State
            under a paragraph of this subsection for any fiscal year that
            the State certifies to the Secretary will not be expended by
            the State pursuant to this section shall be available for
            reallotment using the allotment methodology specified in that
            paragraph. Any amount so reallotted to a State is deemed part
            of the allotment of the State under this subsection.
        ``(d) Maintenance of Effort.--Beginning with fiscal year 2011, a
    State meets the requirement of this subsection for a fiscal year if the
    Secretary finds that the aggregate expenditures by the State from State
    and local sources for programs of home visitation for families with
    young children and families expecting children for the then preceding
    fiscal year was not less than 100 percent of such aggregate
    expenditures for the then 2nd preceding fiscal year.
        ``(e) Payment of Grant.--
                ``(1) In general.--The Secretary shall make a grant to each
            State that meets the requirements of subsections (b) and (d),
            if applicable, for a fiscal year for which funds are
            appropriated under subsection (m), in an amount equal to the
            reimbursable percentage of the eligible expenditures of the
            State for the fiscal year, but not more than the amount
            allotted to the State under subsection (c) for the fiscal year.
                ``(2) Reimbursable percentage defined.--In paragraph (1),
            the term `reimbursable percentage' means, with respect to a
            fiscal year--
                        ``(A) 85 percent, in the case of fiscal year 2010;
                        ``(B) 80 percent, in the case of fiscal year 2011;
                    or
                        ``(C) 75 percent, in the case of fiscal year 2012
                    and any succeeding fiscal year.
        ``(f) Eligible Expenditures.--
                ``(1) In general.--In this section, the term `eligible
            expenditures'--
                        ``(A) means expenditures to provide voluntary home
                    visitation for as many families with young children
                    (under the age of school entry) and families expecting
                    children as practicable, through the implementation or
                    expansion of high quality home visitation programs
                    that--
                                ``(i) adhere to clear evidence-based models
                            of home visitation that have demonstrated
                            positive effects on important program-
                            determined child and parenting outcomes, such
                            as reducing abuse and neglect and improving
                            child health and development;
                                ``(ii) employ well-trained and competent
                            staff, maintain high quality supervision,
                            provide for ongoing training and professional
                            development, and show strong organizational
                            capacity to implement such a program;
                                ``(iii) establish appropriate linkages and
                            referrals to other community resources and
                            supports;
                                ``(iv) monitor fidelity of program
                            implementation to ensure that services are
                            delivered according to the specified model; and
                                ``(v) provide parents with--
                                        ``(I) knowledge of age-appropriate
                                    child development in cognitive,
                                    language, social, emotional, and motor
                                    domains (including knowledge of second
                                    language acquisition, in the case of
                                    English language learners);
                                        ``(II) knowledge of realistic
                                    expectations of age-appropriate child
                                    behaviors;
                                        ``(III) knowledge of health and
                                    wellness issues for children and
                                    parents;
                                        ``(IV) modeling, consulting, and
                                    coaching on parenting practices;
                                        ``(V) skills to interact with their
                                    child to enhance age-appropriate
                                    development;
                                        ``(VI) skills to recognize and seek
                                    help for issues related to health,
                                    developmental delays, and social,
                                    emotional, and behavioral skills; and
                                        ``(VII) activities designed to help
                                    parents become full partners in the
                                    education of their children;
                        ``(B) includes expenditures for training, technical
                    assistance, and evaluations related to the programs;
                    and
                        ``(C) does not include any expenditure with respect
                    to which a State has submitted a claim for payment
                    under any other provision of Federal law.
                ``(2) Priority funding for programs with strongest
            evidence.--
                        ``(A) In general.--The expenditures, described in
                    paragraph (1), of a State for a fiscal year that are
                    attributable to the cost of programs that do not adhere
                    to a model of home visitation with the strongest
                    evidence of effectiveness shall not be considered
                    eligible expenditures for the fiscal year to the extent
                    that the total of the expenditures exceeds the
                    applicable percentage for the fiscal year of the
                    allotment of the State under subsection (c) for the
                    fiscal year.
                        ``(B) Applicable percentage defined.--In
                    subparagraph (A), the term `applicable percentage'
                    means, with respect to a fiscal year--
                                ``(i) 60 percent for fiscal year 2010;
                                ``(ii) 55 percent for fiscal year 2011;
                                ``(iii) 50 percent for fiscal year 2012;
                                ``(iv) 45 percent for fiscal year 2013; or
                                ``(v) 40 percent for fiscal year 2014.
        ``(g) No Use of Other Federal Funds for State Match.--A State to
    which a grant is made under this section may not expend any Federal
    funds to meet the State share of the cost of an eligible expenditure
    for which the State receives a payment under this section.
        ``(h) Waiver Authority.--
                ``(1) In general.--The Secretary may waive or modify the
            application of any provision of this section, other than
            subsection (b) or (f), to an Indian tribe if the failure to do
            so would impose an undue burden on the Indian tribe.
                ``(2) Special rule.--An Indian tribe is deemed to meet the
            requirement of subsection (d) for purposes of subsections (c)
            and (e) if--
                        ``(A) the Secretary waives the requirement; or
                        ``(B) the Secretary modifies the requirement, and
                    the Indian tribe meets the modified requirement.
        ``(i) State Reports.--Each State to which a grant is made under
    this section shall submit to the Secretary an annual report on the
    progress made by the State in addressing the purposes of this section.
    Each such report shall include a description of--
                ``(1) the services delivered by the programs that received
            funds from the grant;
                ``(2) the characteristics of each such program, including
            information on the service model used by the program and the
            performance of the program;
                ``(3) the characteristics of the providers of services
            through the program, including staff qualifications, work
            experience, and demographic characteristics;
                ``(4) the characteristics of the recipients of services
            provided through the program, including the number of the
            recipients, the demographic characteristics of the recipients,
            and family retention;
                ``(5) the annual cost of implementing the program,
            including the cost per family served under the program;
                ``(6) the outcomes experienced by recipients of services
            through the program;
                ``(7) the training and technical assistance provided to aid
            implementation of the program, and how the training and
            technical assistance contributed to the outcomes achieved
            through the program;
                ``(8) the indicators and methods used to monitor whether
            the program is being implemented as designed; and
                ``(9) other information as determined necessary by the
            Secretary.
        ``(j) Evaluation.--
                ``(1) In general.--The Secretary shall, by grant or
            contract, provide for the conduct of an independent evaluation
            of the effectiveness of home visitation programs receiving
            funds provided under this section, which shall examine the
            following:
                        ``(A) The effect of home visitation programs on
                    child and parent outcomes, including child
                    maltreatment, child health and development, school
                    readiness, and links to community services.
                        ``(B) The effectiveness of home visitation programs
                    on different populations, including the extent to which
                    the ability of programs to improve outcomes varies
                    across programs and populations.
                ``(2) Reports to the congress.--
                        ``(A) Interim report.--Within 3 years after the
                    date of the enactment of this section, the Secretary
                    shall submit to the Congress an interim report on the
                    evaluation conducted pursuant to paragraph (1).
                        ``(B) Final report.--Within 5 years after the date
                    of the enactment of this section, the Secretary shall
                    submit to the Congress a final report on the evaluation
                    conducted pursuant to paragraph (1).
        ``(k) Annual Reports to the Congress.--The Secretary shall submit
    annually to the Congress a report on the activities carried out using
    funds made available under this section, which shall include a
    description of the following:
                ``(1) The high need communities targeted by States for
            programs carried out under this section.
                ``(2) The service delivery models used in the programs
            receiving funds provided under this section.
                ``(3) The characteristics of the programs, including--
                        ``(A) the qualifications and demographic
                    characteristics of program staff; and
                        ``(B) recipient characteristics including the
                    number of families served, the demographic
                    characteristics of the families served, and family
                    retention and duration of services.
                ``(4) The outcomes reported by the programs.
                ``(5) The research-based instruction, materials, and
            activities being used in the activities funded under the grant.
                ``(6) The training and technical activities, including on-
            going professional development, provided to the programs.
                ``(7) The annual costs of implementing the programs,
            including the cost per family served under the programs.
                ``(8) The indicators and methods used by States to monitor
            whether the programs are being been implemented as designed.
        ``(l) Reservations of Funds.--From the amounts appropriated for a
    fiscal year under subsection (m), the Secretary shall reserve--
                ``(1) an amount equal to 5 percent of the amounts to pay
            the cost of the evaluation provided for in subsection (j), and
            the provision to States of training and technical assistance,
            including the dissemination of best practices in early
            childhood home visitation; and
                ``(2) after making the reservation required by paragraph
            (1), an amount equal to 3 percent of the amount so
            appropriated, to pay for grants to Indian tribes under this
            section.
        ``(m) Appropriations.--Out of any money in the Treasury of the
    United States not otherwise appropriated, there is appropriated to the
    Secretary to carry out this section--
                ``(1) $50,000,000 for fiscal year 2010;
                ``(2) $100,000,000 for fiscal year 2011;
                ``(3) $150,000,000 for fiscal year 2012;
                ``(4) $200,000,000 for fiscal year 2013; and
                ``(5) $250,000,000 for fiscal year 2014.
        ``(n) Indian Tribes Treated as States.--In this section, paragraphs
    (4), (5), and (6) of section 431(a) shall apply.''.

    SEC. 1905. IMPROVED COORDINATION AND PROTECTION FOR DUAL ELIGIBLES.

        Title XI of the Social Security Act is amended by inserting after
    section 1150 the following new section:

           ``improved coordination and protection for dual eligibles

        ``Sec. 1150A.  (a) In General.--The Secretary shall provide,
    through an identifiable office or program within the Centers for
    Medicare & Medicaid Services, for a focused effort to provide for
    improved coordination between Medicare and Medicaid and protection in
    the case of dual eligibles (as defined in subsection (e)). The office
    or program shall--
                ``(1) review Medicare and Medicaid policies related to
            enrollment, benefits, service delivery, payment, and grievance
            and appeals processes under parts A and B of title XVIII, under
            the Medicare Advantage program under part C of such title, and
            under title XIX;
                ``(2) identify areas of such policies where better
            coordination and protection could improve care and costs; and
                ``(3) issue guidance to States regarding improving such
            coordination and protection.
        ``(b) Elements.--The improved coordination and protection under
    this section shall include efforts--
                ``(1) to simplify access of dual eligibles to benefits and
            services under Medicare and Medicaid;
                ``(2) to improve care continuity for dual eligibles and
            ensure safe and effective care transitions;
                ``(3) to harmonize regulatory conflicts between Medicare
            and Medicaid rules with regard to dual eligibles; and
                ``(4) to improve total cost and quality performance under
            Medicare and Medicaid for dual eligibles.
        ``(c) Responsibilities.--In carrying out this section, the
    Secretary shall provide for the following:
                ``(1) An examination of Medicare and Medicaid payment
            systems to develop strategies to foster more integrated and
            higher quality care.
                ``(2) Development of methods to facilitate access to post-
            acute and community-based services and to identify actions that
            could lead to better coordination of community-based care.
                ``(3) A study of enrollment of dual eligibles in the
            Medicare Savings Program (as defined in section 1144(c)(7)),
            under Medicaid, and in the low-income subsidy program under
            section 1860D-14 to identify methods to more efficiently and
            effectively reach and enroll dual eligibles.
                ``(4) An assessment of communication strategies for dual
            eligibles to determine whether additional informational
            materials or outreach is needed, including an assessment of the
            Medicare website, 1-800-MEDICARE, and the Medicare handbook.
                ``(5) Research and evaluation of areas where service
            utilization, quality, and access to cost sharing protection
            could be improved and an assessment of factors related to
            enrollee satisfaction with services and care delivery.
                ``(6) Collection (and making available to the public) of
            data and a database that describe the eligibility, benefit and
            cost-sharing assistance available to dual eligibles by State.
                ``(7) Monitoring total combined Medicare and Medicaid
            program costs in serving dual eligibles and making
            recommendations for optimizing total quality and cost
            performance across both programs.
                ``(8) Coordination of activities relating to Medicare
            Advantage plans under 1859(b)(6)(B)(ii) and Medicaid.
        ``(d) Periodic Reports.--Not later than 1 year after the date of
    the enactment of this section and every 3 years thereafter the
    Secretary shall submit to Congress a report on progress in activities
    conducted under this section.
        ``(e) Definitions.--In this section:
                ``(1) Dual eligible.--The term `dual eligible' means an
            individual who is dually eligible for benefits under title
            XVIII, and medical assistance under title XIX, including such
            individuals who are eligible for benefits under the Medicare
            Savings Program (as defined in section 1144(c)(7)).
                ``(2) Medicare; medicaid.--The terms `Medicare' and
            `Medicaid' mean the programs under titles XVIII and XIX,
            respectively.''.

    SEC. 1906. ASSESSMENT OF MEDICARE COST-INTENSIVE DISEASES AND
                  CONDITIONS.

        (a) Initial Assessment.--
                (1) In general.--The Administrator of the Centers for
            Medicare & Medicaid Services shall conduct an assessment of the
            diseases and conditions that are the most cost-intensive for
            the Medicare program. The assessment shall inform research
            priorities within the Department of Health and Human Services
            in order improve the prevention, or treatment or cure, of such
            diseases and conditions.
                (2) Report.-- Not later than January 1, 2011, the
            Administrator shall submit to the Secretary of Health and Human
            Services a report on such assessment and the Secretary shall
            transmit such report to the Congress.
        (b) Updates of Assessment.--Not later than January 1, 2013, and
    biennially thereafter, the Administrator of the Centers for Medicare &
    Medicaid Services shall review and update the assessment described in
    subsection (a) and make such recommendations to the Secretary on
    changes in research priorities referred to in such subsection as may be
    appropriate. The Secretary shall submit to the Congress a report on
    such recommendations.
        (c) Medicare Cost-Intensive Research Fund.--There is established in
    the Treasury of the United States a Fund to be known as the Medicare
    Cost-Intensive Research Fund (in this subsection referred to as the
    ``Fund''), consisting of such amounts as may be appropriated or
    credited to such Fund for research priorities identified as a result of
    the assessments conducted under this section.

             SUBDIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

    SEC. 2001. TABLE OF CONTENTS; REFERENCES.

        (a) Table of Contents.--The table of contents of this subdivision
    is as follows:

    Sec. 2001. Table of contents; references.
    Sec. 2002. Public Health Investment Fund.
                       TITLE I--COMMUNITY HEALTH CENTERS

    Sec. 2101. Increased funding.
                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     Part 1--National Health Service Corps

    Sec. 2201. National Health Service Corps.
    Sec. 2202. Authorizations of appropriations.
                Part 2--Promotion of Primary Care and Dentistry

    Sec. 2211. Frontline health providers.
                 ``subpart xi--health professional needs areas

            ``Sec. 340H. In general.
            ``Sec. 340I. Loan repayments.
            ``Sec. 340J. Report.
            ``Sec. 340K. Allocation.
    Sec. 2212. Primary care student loan funds.
    Sec. 2213. Training in family medicine, general internal medicine,
                                general pediatrics, geriatrics, and
                                physician assistantship.
    Sec. 2214. Training of medical residents in community-based settings.
    Sec. 2215. Training for general, pediatric, and public health dentists
                                and dental hygienists.
    Sec. 2216. Authorization of appropriations.
                         Subtitle B--Nursing Workforce

    Sec. 2221. Amendments to Public Health Service Act.
                      Subtitle C--Public Health Workforce

    Sec. 2231. Public Health Workforce Corps.
                     ``subpart xii--public health workforce

            ``Sec. 340L. Public Health Workforce Corps.
            ``Sec. 340M. Public Health Workforce Scholarship Program.
            ``Sec. 340N. Public Health Workforce Loan Repayment Program.
    Sec. 2232. Enhancing the public health workforce.
    Sec. 2233. Public health training centers.
    Sec. 2234. Preventive medicine and public health training grant
                                program.
    Sec. 2235. Authorization of appropriations.
         Subtitle D--Adapting Workforce to Evolving Health System Needs

               Part 1--Health Professions Training for Diversity

    Sec. 2241. Scholarships for disadvantaged students, loan repayments and
                                fellowships regarding faculty positions,
                                and educational assistance in the health
                                professions regarding individuals from
                                disadvantaged backgrounds.
    Sec. 2242. Nursing workforce diversity grants.
    Sec. 2243. Coordination of diversity and cultural competency programs.
                  Part 2--Interdisciplinary Training Programs

    Sec. 2251. Cultural and linguistic competency training for health care
                                professionals.
    Sec. 2252. Innovations in interdisciplinary care training.
         Part 3--Advisory Committee on Health Workforce Evaluation and
                                   Assessment

    Sec. 2261. Health workforce evaluation and assessment.
                      Part 4--Health Workforce Assessment

    Sec. 2271. Health workforce assessment.
                    Part 5--Authorization of Appropriations

    Sec. 2281. Authorization of appropriations.
                       TITLE III--PREVENTION AND WELLNESS

    Sec. 2301. Prevention and wellness.
                     ``TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

            ``Sec. 3111. Prevention and Wellness Trust.
            ``Subtitle B--National Prevention and Wellness Strategy

            ``Sec. 3121. National Prevention and Wellness Strategy.
                      ``Subtitle C--Prevention Task Forces

            ``Sec. 3131. Task Force on Clinical Preventive Services.
            ``Sec. 3132. Task Force on Community Preventive Services.
                 ``Subtitle D--Prevention and Wellness Research

            ``Sec. 3141. Prevention and wellness research activity
                                coordination.
            ``Sec. 3142. Community prevention and wellness research grants.
      ``Subtitle E--Delivery of Community Prevention and Wellness Services

            ``Sec. 3151. Community prevention and wellness services grants.
                ``Subtitle F--Core Public Health Infrastructure

            ``Sec. 3161. Core public health infrastructure for State,
                                local, and tribal health departments.
            ``Sec. 3162. Core public health infrastructure and activities
                                for CDC.
                        ``Subtitle G--General Provisions

            ``Sec. 3171. Definitions.
                       TITLE IV--QUALITY AND SURVEILLANCE

    Sec. 2401. Implementation of best practices in the delivery of health
                                care.
    Sec. 2402. Assistant Secretary for Health Information.
    Sec. 2403. Authorization of appropriations.
                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    Sec. 2501. Expanded participation in 340B program.
    Sec. 2502. Extension of discounts to inpatient drugs.
    Sec. 2503. Effective date.
                    Subtitle B--School-Based Health Clinics

    Sec. 2511. School-based health clinics.
                  Subtitle C--National Medical Device Registry

    Sec. 2521. National medical device registry.
     Subtitle D--Grants for Comprehensive Programs To Provide Education to
                    Nurses and Create a Pipeline to Nursing

    Sec. 2531. Establishment of grant program.
     Subtitle E--States Failing To Adhere to Certain Employment Obligations

    Sec. 2541. Limitation on Federal funds.
        (b) References.--Except as otherwise specified, whenever in this
    subdivision an amendment is expressed in terms of an amendment to a
    section or other provision, the reference shall be considered to be
    made to a section or other provision of the Public Health Service Act
    (42 U.S.C. 201 et seq.).

    SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

        (a) Establishment of Funds.--
                (1) In general.--There is established a fund to be known as
            the ``Public Health Investment Fund'' (referred to in this
            section as the ``Fund'').
                (2) Funding.--
                        (A) There shall be deposited into the Fund--
                                (i) for fiscal year 2010, $4,600,000,000;
                                (ii) for fiscal year 2011, $5,600,000,000;
                                (iii) for fiscal year 2012, $6,900,000,000;
                                (iv) for fiscal year 2013, $7,800,000,000;
                                (v) for fiscal year 2014, $9,000,000,000;
                                (vi) for fiscal year 2015, $9,400,000,000;
                                (vii) for fiscal year 2016,
                            $10,100,000,000;
                                (viii) for fiscal year 2017,
                            $10,800,000,000;
                                (ix) for fiscal year 2018, $11,800,000,000;
                            and
                                (x) for fiscal year 2019, $12,700,000,000.
                        (B) Amounts deposited into the Fund shall be
                    derived from general revenues of the Treasury.
        (b) Authorization of Appropriations From the Fund.--
                (1) New funding.--
                        (A) In general.--Amounts in the Fund are authorized
                    to be appropriated by the Committees on Appropriations
                    of the House of Representatives and the Senate for
                    carrying out activities under designated public health
                    provisions.
                        (B) Designated provisions.--For purposes of this
                    paragraph, the term ``designated public health
                    provisions'' means the provisions for which amounts are
                    authorized to be appropriated under section 330(s),
                    338(c), 338H-1, 799C, 872, or 3111 of the Public Health
                    Service Act, as added by this subdivision.
                (2) Baseline funding.--
                        (A) In general.--Amounts in the Fund are authorized
                    to be appropriated (as described in paragraph (1)) for
                    a fiscal year only if (excluding any amounts in or
                    appropriated from the Fund)--
                                (i) the amounts specified in subparagraph
                            (B) for the fiscal year involved are equal to
                            or greater than the amounts specified in
                            subparagraph (B) for fiscal year 2008; and
                                (ii) the amounts appropriated, out of the
                            general fund of the Treasury, to the Prevention
                            and Wellness Trust under section 3111 of the
                            Public Health Service Act, as added by this
                            subdivision, for the fiscal year involved are
                            equal to or greater than the funds--
                                        (I) appropriated under the heading
                                    ``Prevention and Wellness Fund'' in
                                    title VIII of division A of the
                                    American Recovery and Reinvestment Act
                                    of 2009 (Public Law 111-5); and
                                        (II) allocated by the second
                                    proviso under such heading for
                                    evidence-based clinical and community-
                                    based prevention and wellness
                                    strategies.
                        (B) Amounts specified.--The amounts specified in
                    this subparagraph, with respect to a fiscal year, are
                    the amounts appropriated for the following:
                                (i) Community health centers (including
                            funds appropriated under the authority of
                            section 330 of the Public Health Service Act
                            (42 U.S.C. 254b)).
                                (ii) The National Health Service Corps
                            Program (including funds appropriated under the
                            authority of section 338 of such Act (42 U.S.C.
                            254k)).
                                (iii) The National Health Service Corps
                            Scholarship and Loan Repayment Programs
                            (including funds appropriated under the
                            authority of section 338H of such Act (42
                            U.S.C. 254q)).
                                (iv) Primary care loan funds (including
                            funds appropriated for schools of medicine or
                            osteopathic medicine under the authority of
                            section 735(f) of such Act (42 U.S.C.
                            292y(f))).
                                (v) Primary care education programs
                            (including funds appropriated under the
                            authority of sections 736, 740, 741, and 747 of
                            such Act (42 U.S.C. 293, 293d, and 293k)).
                                (vi) Sections 761 and 770 of such Act (42
                            U.S.C. 294n and 295e).
                                (vii) Nursing workforce development
                            (including funds appropriated under the
                            authority of title VIII of such Act (42 U.S.C.
                            296 et seq.)).
                                (viii) The National Center for Health
                            Statistics (including funds appropriated under
                            the authority of sections 304, 306, 307, and
                            308 of such Act (42 U.S.C. 242b, 242k, 242l,
                            and 242m)).
                                (ix) The Agency for Healthcare Research and
                            Quality (including funds appropriated under the
                            authority of title IX of such Act (42 U.S.C.
                            299 et seq.)).
                (3) Budgetary implications.--Amounts appropriated under
            this section, and outlays flowing from such appropriations,
            shall not be taken into account for purposes of any budget
            enforcement procedures including allocations under section
            302(a) and (b) of the Balanced Budget and Emergency Deficit
            Control Act and budget resolutions for fiscal years during
            which appropriations are made from the Fund.

                       TITLE I--COMMUNITY HEALTH CENTERS

    SEC. 2101. INCREASED FUNDING.

        Section 330 of the Public Health Service Act (42 U.S.C. 254b) is
    amended--
                (1) in subsection (r)(1)--
                        (A) in subparagraph (D), by striking ``and'' at the
                    end;
                        (B) in subparagraph (E), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by inserting at the end the following:
                        ``(F) Such sums as may be necessary for each of
                    fiscal years 2013 and 2019.''; and
                (2) by inserting after subsection (r) the following:
        ``(s) Additional Funding.--For the purpose of carrying out this
    section, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
                ``(1) For fiscal year 2010, $1,000,000,000.
                ``(2) For fiscal year 2011, $1,500,000,000.
                ``(3) For fiscal year 2012, $2,500,000,000.
                ``(4) For fiscal year 2013, $3,000,000,000.
                ``(5) For fiscal year 2014, $4,000,000,000.
                ``(6) For fiscal year 2015, $4,400,000,000.
                ``(7) For fiscal year 2016, $4,800,000,000.
                ``(8) For fiscal year 2017, $5,300,000,000.
                ``(9) For fiscal year 2018, $5,900,000,000.
                ``(10) For fiscal year 2019, $6,400,000,000.''.

                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     PART 1--NATIONAL HEALTH SERVICE CORPS

    SEC. 2201. NATIONAL HEALTH SERVICE CORPS.

        (a) Fulfillment of Obligated Service Requirement Through Half-Time
    Service.--
                (1) Waivers.--Subsection (i) of section 331 (42 U.S.C.
            254d) is amended--
                        (A) in paragraph (1), by striking ``In carrying out
                    subpart III'' and all that follows through the period
                    and inserting ``In carrying out subpart III, the
                    Secretary may, in accordance with this subsection,
                    issue waivers to individuals who have entered into a
                    contract for obligated service under the Scholarship
                    Program or the Loan Repayment Program under which the
                    individuals are authorized to satisfy the requirement
                    of obligated service through providing clinical
                    practice that is half-time.'';
                        (B) in paragraph (2)--
                                (i) in subparagraphs (A)(ii) and (B), by
                            striking ``less than full time'' each place it
                            appears and inserting ``half time'';
                                (ii) in subparagraphs (C) and (F), by
                            striking ``less than full-time service'' each
                            place it appears and inserting ``half-time
                            service''; and
                                (iii) by amending subparagraphs (D) and (E)
                            to read as follows:
                ``(D) the entity and the Corps member agree in writing that
            the Corps member will perform half-time clinical practice;
                ``(E) the Corps member agrees in writing to fulfill all of
            the service obligations under section 338C through half-time
            clinical practice and either--
                        ``(i) double the period of obligated service; or
                        ``(ii) in the case of contracts entered into under
                    section 338B, accept a minimum service obligation of 2
                    years with an award amount equal to 50 percent of the
                    amount that would otherwise be payable for full-time
                    service; and''; and
                        (C) in paragraph (3), by striking ``In evaluating a
                    demonstration project described in paragraph (1)'' and
                    inserting ``In evaluating waivers issued under
                    paragraph (1)''.
                (2) Definitions.--Subsection (j) of section 331 (42 U.S.C.
            254d) is amended by adding at the end the following:
                ``(5) The terms `full time' and `full-time' mean a minimum
            of 40 hours per week in a clinical practice, for a minimum of
            45 weeks per year.
                ``(6) The terms `half time' and `half-time' mean a minimum
            of 20 hours per week (not to exceed 39 hours per week) in a
            clinical practice, for a minimum of 45 weeks per year.''.
        (b) Reappointment to National Advisory Council.--Section 337(b)(1)
    (42 U.S.C. 254j(b)(1)) is amended by striking ``Members may not be
    reappointed to the Council.''.
        (c) Loan Repayment Amount.--Section 338B(g)(2)(A) is amended (42
    U.S.C. 254l-1(g)(2)(A)) by striking ``$35,000'' and inserting
    ``$50,000, plus, beginning with fiscal year 2012, an amount determined
    by the Secretary on an annual basis to reflect inflation,''.
        (d) Treatment of Teaching as Obligated Service.--Subsection (a) of
    section 338C (42 U.S.C. 254m) is amended by adding at the end the
    following: ``The Secretary may treat teaching as clinical practice for
    up to 20 percent of such period of obligated service.''.

    SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.

        (a) National Health Service Corps Program.--Section 338 (42 U.S.C.
    254k) is amended--
                (1) in subsection (a), by striking ``2012'' and inserting
            ``2019''; and
                (2) by adding at the end the following:
        ``(c) For the purpose of carrying out this subpart, in addition to
    any other amounts authorized to be appropriated for such purpose, there
    are authorized to be appropriated, out of any monies in the Public
    Health Investment Fund, the following:
                ``(1) $63,000,000 for fiscal year 2010.
                ``(2) $66,000,000 for fiscal year 2011.
                ``(3) $70,000,000 for fiscal year 2012.
                ``(4) $73,000,000 for fiscal year 2013.
                ``(5) $77,000,000 for fiscal year 2014.
                ``(6) $81,000,000 for fiscal year 2015.
                ``(7) $85,000,000 for fiscal year 2016.
                ``(8) $89,000,000 for fiscal year 2017.
                ``(9) $94,000,000 for fiscal year 2018.
                ``(10) $98,000,000 for fiscal year 2019.''.
        (b) Scholarship and Loan Repayment Programs.--Subpart III of part D
    of title III of the Public Health Service Act (42 U.S.C. 254l et seq.)
    is amended--
                (1) in section 338H(a)--
                        (A) in paragraph (4), by striking ``and'' at the
                    end;
                        (B) in paragraph (5), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(6) for fiscal years 2013 and 2019, such sums as may be
            necessary.''; and
                (2) by inserting after section 338H the following:

    ``SEC. 338H-1. ADDITIONAL FUNDING.

        ``For the purpose of carrying out this subpart, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
                ``(1) $254,000,000 for fiscal year 2010.
                ``(2) $266,000,000 for fiscal year 2011.
                ``(3) $278,000,000 for fiscal year 2012.
                ``(4) $292,000,000 for fiscal year 2013.
                ``(5) $306,000,000 for fiscal year 2014.
                ``(6) $321,000,000 for fiscal year 2015.
                ``(7) $337,000,000 for fiscal year 2016.
                ``(8) $354,000,000 for fiscal year 2017.
                ``(9) $372,000,000 for fiscal year 2018.
                ``(10) $391,000,000 for fiscal year 2019.''.

                PART 2--PROMOTION OF PRIMARY CARE AND DENTISTRY

    SEC. 2211. FRONTLINE HEALTH PROVIDERS.

        Part D of title III (42 U.S.C. 254b et seq.) is amended by adding
    at the end the following:

                 ``Subpart XI--Health Professional Needs Areas

    ``SEC. 340H. IN GENERAL.

        ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration, shall establish a
    program, to be known as the Frontline Health Providers Loan Repayment
    Program, to address unmet health care needs in health professional
    needs areas through loan repayments under section 340I.
        ``(b) Designation of Health Professional Needs Areas.--
                ``(1) In general.--In this subpart, the term `health
            professional needs area' means an area, population, or facility
            that is designated by the Secretary in accordance with
            paragraph (2).
                ``(2) Designation.--To be designated by the Secretary as a
            health professional needs area under this subpart:
                        ``(A) In the case of an area, the area must be a
                    rational area for the delivery of health services.
                        ``(B) The area, population, or facility must have,
                    in one or more health disciplines, specialties, or
                    subspecialties for the population served, as determined
                    by the Secretary--
                                ``(i) insufficient capacity of health
                            professionals; or
                                ``(ii) high needs for health services.
                        ``(C) With respect to the delivery of primary
                    health services, the area, population, or facility must
                    not include a health professional shortage area (as
                    designated under section 332), except that the area,
                    population, or facility may include such a health
                    professional shortage area to which no member of the
                    National Health Service Corps is currently assigned.
        ``(c) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1) hold a degree in a course of study or program
            (approved by the Secretary) from a school defined in section
            799B(1)(A) (other than a school of public health);
                ``(2) hold a degree in a course of study or program
            (approved by the Secretary) from a school or program defined in
            subparagraph (C), (D), or (E)(4) of section 799B(1), as
            designated by the Secretary;
                ``(3) be enrolled as a full-time student--
                        ``(A) in a school or program defined in
                    subparagraph (C), (D), or (E)(4) of section 799B(1), as
                    designated by the Secretary, or a school described in
                    paragraph (1); and
                        ``(B) in the final year of a course of study or
                    program, offered by such school or program and approved
                    by the Secretary, leading to a degree in a discipline
                    referred to in subparagraph (A) (other than a graduate
                    degree in public health), (C), (D), or (E)(4) of
                    section 799B(1);
                ``(4) be a practitioner described in section 1842(b)(18)(C)
            or 1848(k)(3)(B)(iii) or (iv) of the Social Security Act; or
                ``(5) be a practitioner in the field of respiratory
            therapy, medical technology, or radiologic technology.
        ``(d) Definition.--In this subpart, the term `primary health
    services' has the meaning given to such term in section 331(a)(3)(D).

    ``SEC. 340I. LOAN REPAYMENTS.

        ``(a) Loan Repayments.--The Secretary, acting through the
    Administrator of the Health Resources and Services Administration,
    shall enter into contracts with individuals under which--
                ``(1) the individual agrees--
                        ``(A) to serve as a full-time primary health
                    services provider or as a full-time or part-time
                    provider of other health services for a period of time
                    equal to 2 years or such longer period as the
                    individual may agree to;
                        ``(B) to serve in a health professional needs area
                    in a health discipline, specialty, or a subspecialty
                    for which the area, population, or facility is
                    designated as a health professional needs area under
                    section 340H; and
                        ``(C) in the case of an individual described in
                    subsection 340H(c)(3) who is in the final year of study
                    and who has accepted employment as primary health
                    services provider or provider of other health services
                    in accordance with subparagraphs (A) and (B), to
                    complete the education or training and maintain an
                    acceptable level of academic standing (as determined by
                    the educational institution offering the course of
                    study or training); and
                ``(2) the Secretary agrees to pay, for each year of such
            service, an amount on the principal and interest of the
            undergraduate or graduate educational loans (or both) of the
            individual that is not more than 50 percent of the average
            award made under the National Health Service Corps Loan
            Repayment Program under subpart III in that year.
        ``(b) Practice Setting.--A contract entered into under this section
    shall allow the individual receiving the loan repayment to satisfy the
    service requirement described in subsection (a)(1) through employment
    in a solo or group practice, a clinic, an accredited public or private
    nonprofit hospital, or any other health care entity, as deemed
    appropriate by the Secretary.
        ``(c) Application of Certain Provisions.--The provisions of subpart
    III of part D shall, except as inconsistent with this section, apply to
    the loan repayment program under this subpart in the same manner and to
    the same extent as such provisions apply to the National Health Service
    Corps Loan Repayment Program established under section 338B.
        ``(d) Insufficient Number of Applicants.--If there are an
    insufficient number of applicants for loan repayments under this
    section to obligate all appropriated funds, the Secretary shall
    transfer the unobligated funds to the National Health Service Corps for
    the purpose of--
                ``(1) recruitment of sufficient applicants for the National
            Health Service Corps for the following year; or
                ``(2) making additional loan repayments under section 338B
            if there is an excess number of qualified applicants for loan
            repayments under such section.

    ``SEC. 340J. REPORT.

        ``The Secretary shall submit to the Congress an annual report on
    the program carried out under this subpart.

    ``SEC. 340K. ALLOCATION.

        ``Of the amount of funds obligated under this subpart each fiscal
    year for loan repayments--
                ``(1) 90 percent shall be for physicians and other health
            professionals providing primary health services; and
                ``(2) 10 percent shall be for health professionals not
            described in paragraph (1).''.

    SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.

        (a) Loan Provisions.--Section 722 (42 U.S.C. 292r) is amended by
    striking subsection (e) and inserting the following:
        ``(e) Rate of Interest.--Such loans shall bear interest, on the
    unpaid balance of the loan, computed only for periods for which the
    loan is repayable, at the rate of 2 percentage points less than the
    applicable rate of interest described in section 427A(l)(1) of the
    Higher Education Act of 1965 per year.''.
        (b) Medical Schools and Primary Health Care.--Subsection (a) of
    section 723 (42 U.S.C. 292s) is amended--
                (1) in paragraph (1), by striking subparagraph (B) and
            inserting the following:
                        ``(B) to practice in such care for 10 years
                    (including residency training in primary health care)
                    or through the date on which the loan is repaid in
                    full, whichever occurs first.''; and
                (2) by striking paragraph (3) and inserting the following:
                ``(3) Noncompliance by student.--If an individual fails to
            comply with an agreement entered into pursuant to paragraph
            (1), such agreement shall provide that the total interest to be
            paid on the loan, over the course of the loan period, shall
            equal the total amount of interest that would have been
            incurred by the individual if, from the outset of the loan, the
            loan was repayable at the rate of interest described in section
            427A(l)(1) of the Higher Education Act of 1965 per year instead
            of the rate of interest described in section 722(e).''.
        (c) Student Loan Guidelines.--
                (1) In general.--Section 735 (42 U.S.C. 292y) is amended--
                        (A) by redesignating subsection (f) as subsection
                    (g); and
                        (B) by inserting after subsection (e) the
                    following:
        ``(f) Determination of Financial Need.--The Secretary--
                ``(1) may require, or authorize a school or other entity to
            require, the submission of financial information to determine
            the financial resources available to any individual seeking
            assistance under this subpart; and
                ``(2) shall take into account the extent to which such
            individual is financially independent in determining whether to
            require or authorize the submission of such information
            regarding such individual's family members.''.
                (2) Revised guidelines.--The Secretary of Health and Human
            Services shall--
                        (A) strike the second sentence of section 57.206(b)
                    of title 42, Code of Federal Regulations; and
                        (B) make such other revisions to guidelines and
                    regulations in effect as of the date of the enactment
                    of this Act as may be necessary for consistency with
                    the amendments made by paragraph (1).

    SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE,
                  GENERAL PEDIATRICS, GERIATRICS, AND PHYSICIAN
                  ASSISTANTSHIP.

        Section 747 (42 U.S.C. 293k) is amended--
                (1) by amending the section heading to read as follows:
            ``primary care training and enhancement'';
                (2) by redesignating subsection (e) as subsection (f); and
                (3) by striking subsections (a) through (d) and inserting
            the following:
        ``(a) Program.--The Secretary shall establish a primary care
    training and capacity building program consisting of awarding grants
    and contracts under subsections (b) and (c).
        ``(b) Support and Development of Primary Care Training Programs.--
                ``(1) In general.--The Secretary shall make grants to, or
            enter into contracts with, eligible entities--
                        ``(A) to plan, develop, operate, or participate in
                    an accredited professional training program, including
                    an accredited residency or internship program, in the
                    field of family medicine, general internal medicine,
                    general pediatrics, or geriatrics for medical students,
                    interns, residents, or practicing physicians;
                        ``(B) to provide financial assistance in the form
                    of traineeships and fellowships to medical students,
                    interns, residents, or practicing physicians, who are
                    participants in any such program, and who plan to
                    specialize or work in family medicine, general internal
                    medicine, general pediatrics, or geriatrics;
                        ``(C) to plan, develop, operate, or participate in
                    an accredited program for the training of physicians
                    who plan to teach in family medicine, general internal
                    medicine, general pediatrics, or geriatrics training
                    programs including in community-based settings;
                        ``(D) to provide financial assistance in the form
                    of traineeships and fellowships to practicing
                    physicians who are participants in any such programs
                    and who plan to teach in a family medicine, general
                    internal medicine, general pediatrics, or geriatrics
                    training program; and
                        ``(E) to plan, develop, operate, or participate in
                    an accredited program for physician assistant
                    education, and for the training of individuals who plan
                    to teach in programs to provide such training.
                ``(2) Eligibility.--To be eligible for a grant or contract
            under paragraph (1), an entity shall be--
                        ``(A) an accredited school of medicine or
                    osteopathic medicine, public or nonprofit private
                    hospital, or physician assistant training program;
                        ``(B) a public or private nonprofit entity; or
                        ``(C) a consortium of 2 or more entities described
                    in subparagraphs (A) and (B).
        ``(c) Capacity Building in Primary Care.--
                ``(1) In general.--The Secretary shall make grants to or
            enter into contracts with eligible entities to establish,
            maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    the specialties of family medicine, general internal
                    medicine, general pediatrics, or geriatrics; or
                        ``(B) programs that improve clinical teaching in
                    such specialties.
                ``(2) Eligibility.--To be eligible for a grant or contract
            under paragraph (1), an entity shall be an accredited school of
            medicine or osteopathic medicine.
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of health care professionals who
            provide primary care.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) A high rate of placing graduates in practice settings
            having the principal focus of serving in underserved areas or
            populations experiencing health disparities (including serving
            patients eligible for medical assistance under title XIX of the
            Social Security Act or for child health assistance under title
            XXI of such Act or those with special health care needs).
                ``(4) Supporting teaching programs that address the health
            care needs of vulnerable populations.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definition.--In this section, the term `health disparities'
    has the meaning given the term in section 3171.''.

    SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

        Title VII (42 U.S.C. 292 et seq.) is amended--
                (1) by redesignating section 748 as 749A; and
                (2) by inserting after section 747 the following:

    ``SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

        ``(a) Program.--The Secretary shall establish a program for the
    training of medical residents in community-based settings consisting of
    awarding grants or contracts under this section.
        ``(b) Development and Operation of Community-Based Programs.--The
    Secretary shall make grants to, or enter into contracts with, eligible
    entities--
                ``(1) to plan and develop a new primary care residency
            training program, which may include--
                        ``(A) planning and developing curricula;
                        ``(B) recruiting and training residents and
                    faculty; and
                        ``(C) other activities designated to result in
                    accreditation of such a program; or
                ``(2) to operate or participate in an established primary
            care residency training program, which may include--
                        ``(A) planning and developing curricula;
                        ``(B) recruitment and training of residents; and
                        ``(C) retention of faculty.
        ``(c) Eligible Entity.--To be eligible to receive a grant or
    contract under subsection (b), an entity shall--
                ``(1) be designated as a recipient of payment for the
            direct costs of medical education under section 1886(k) of the
            Social Security Act;
                ``(2) be designated as an approved teaching health center
            under section 1502(d) of the America's Affordable Health
            Choices Act of 2009 and continuing to participate in the
            demonstration project under such section; or
                ``(3) be an applicant for designation described in
            paragraph (1) or (2) and have demonstrated to the Secretary
            appropriate involvement of an accredited teaching hospital to
            carry out the inpatient responsibilities associated with a
            primary care residency training program.
        ``(d) Preferences.--In awarding grants and contracts under
    paragraph (1) or (2) of subsection (b), the Secretary shall give
    preference to entities that--
                ``(1) support teaching programs that address the health
            care needs of vulnerable populations; or
                ``(2) are a Federally qualified health center (as defined
            in section 1861(aa)(4) of the Social Security Act) or a rural
            health clinic (as defined in section 1861(aa)(2) of such Act).
        ``(e) Additional Preferences for Established Programs.--In awarding
    grants and contracts under subsection (b)(2), the Secretary shall give
    preference to entities that have a demonstrated record of training--
                ``(1) a high or significantly improved percentage of health
            care professionals who provide primary care;
                ``(2) individuals who are from underrepresented minority
            groups or disadvantaged backgrounds; or
                ``(3) individuals who practice in settings having the
            principal focus of serving underserved areas or populations
            experiencing health disparities (including serving patients
            eligible for medical assistance under title XIX of the Social
            Security Act or for child health assistance under title XXI of
            such Act or those with special health care needs).
        ``(f) Period of Awards.--
                ``(1) In general.--The period of a grant or contract under
            this section--
                        ``(A) shall not exceed 2 years for awards under
                    subsection (b)(1); and
                        ``(B) shall not exceed 5 years for awards under
                    subsection (b)(2).
                ``(2) Special rules.--
                        ``(A) An award of a grant or contract under
                    subsection (b)(1) shall not be renewed.
                        ``(B) The period of a grant or contract awarded to
                    an entity under subsection (b)(2) shall not overlap
                    with the period of any grant or contact awarded to the
                    same entity under subsection (b)(1).
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(h) Definitions.--In this section:
                ``(1) Primary care residency training program.--The term
            `primary care residency training program' means an approved
            medical residency training program described in section
            1886(h)(5)(A) of the Social Security Act that is--
                        ``(A) in the case of entities seeking awards under
                    subsection (b)(1), actively applying to be accredited
                    by the Accreditation Council for Graduate Medical
                    Education; or
                        ``(B) in the case of entities seeking awards under
                    subsection (b)(2), so accredited.
                ``(2) Health disparities.--The term `health disparities'
            has the meaning given the term in section 3171.''.

    SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS
                  AND DENTAL HYGIENISTS.

        Title VII (42 U.S.C. 292 et seq.) is amended--
                (1) in section 791(a)(1), by striking ``747 and 750'' and
            inserting ``747, 749, and 750''; and
                (2) by inserting after section 748, as added, the
            following:

    ``SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS
                  AND DENTAL HYGIENISTS.

        ``(a) Program.--The Secretary shall establish a dental medicine
    training program consisting of awarding grants and contracts under this
    section.
        ``(b) Support and Development of Dental Training Programs.--The
    Secretary shall make grants to, or enter into contracts with, eligible
    entities--
                ``(1) to plan, develop, operate, or participate in an
            accredited professional training program for oral health
            professionals;
                ``(2) to provide financial assistance to oral health
            professionals who are in need thereof, who are participants in
            any such program, and who plan to work in general, pediatric,
            or public heath dentistry, or dental hygiene;
                ``(3) to plan, develop, operate, or participate in a
            program for the training of oral health professionals who plan
            to teach in general, pediatric, or public health dentistry, or
            dental hygiene;
                ``(4) to provide financial assistance in the form of
            traineeships and fellowships to oral health professionals who
            plan to teach in general, pediatric, or public health dentistry
            or dental hygiene;
                ``(5) to establish, maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    the specialties of general, pediatric, or public health
                    dentistry; or
                        ``(B) programs that improve clinical teaching in
                    such specialties;
                ``(6) to plan, develop, operate, or participate in
            predoctoral and postdoctoral training in general, pediatric, or
            public health dentistry programs, or training for dental
            hygienists;
                ``(7) to plan, develop, operate, or participate in a loan
            repayment program for full-time faculty in a program of
            general, pediatric, or public health dentistry; and
                ``(8) to provide technical assistance to pediatric dental
            training programs in developing and implementing instruction
            regarding the oral health status, dental care needs, and risk-
            based clinical disease management of all pediatric populations
            with an emphasis on underserved children.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited school of dentistry, training program
            in dental hygiene, or public or nonprofit private hospital;
                ``(2) a training program in dental hygiene at an accredited
            institution of higher education;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of--
                        ``(A) 2 or more of the entities described in
                    paragraphs (1) through (3); and
                        ``(B) an accredited school of public health.
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of oral health professionals who
            practice general, pediatric, or public health dentistry.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) A high rate of placing graduates in practice settings
            having the principal focus of serving in underserved areas or
            populations experiencing health disparities (including serving
            patients eligible for medical assistance under title XIX of the
            Social Security Act or for child health assistance under title
            XXI of such Act or those with special health care needs).
                ``(4) Supporting teaching programs that address the dental
            needs of vulnerable populations.
                ``(5) Providing instruction regarding the oral health
            status, dental care needs, and risk-based clinical disease
            management of all pediatric populations with an emphasis on
            underserved children.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definition.--In this section:
                ``(1) The term `health disparities' has the meaning given
            the term in section 3171.
                ``(2) The term `oral health professional' means an
            individual training or practicing--
                        ``(A) in general dentistry, pediatric dentistry,
                    public health dentistry, or dental hygiene; or
                        ``(B) another dental medicine specialty, as deemed
                    appropriate by the Secretary.''.

    SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Part F of title VII (42 U.S.C. 295j et seq.) is
    amended by adding at the end the following:

    ``SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

        ``(a) Promotion of Primary Care and Dentistry.--For the purpose of
    carrying out subpart XI of part D of title III and sections 723, 747,
    748, and 749, in addition to any other amounts authorized to be
    appropriated for such purpose, there is authorized to be appropriated,
    out of any monies in the Public Health Investment Fund, the following:
                ``(1) $240,000,000 for fiscal year 2010.
                ``(2) $253,000,000 for fiscal year 2011.
                ``(3) $265,000,000 for fiscal year 2012.
                ``(4) $278,000,000 for fiscal year 2013.
                ``(5) $292,000,000 for fiscal year 2014.
                ``(6) $307,000,000 for fiscal year 2015.
                ``(7) $322,000,000 for fiscal year 2016.
                ``(8) $338,000,000 for fiscal year 2017.
                ``(9) $355,000,000 for fiscal year 2018.
                ``(10) $373,000,000 for fiscal year 2019.''.
        (b) Existing Authorizations of Appropriations.--
                (1) Section 735.--Paragraph (1) of section 735(g), as so
            redesignated, is amended by inserting ``and such sums as may be
            necessary for subsequent years through fiscal year 2019''
            before the period at the end.
                (2) Section 747.--Subsection (f), as so redesignated, of
            section 747 (42 U.S.C. 293k) is amended by striking ``2002''
            and inserting ``2019''.

                         Subtitle B--Nursing Workforce

    SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

        (a) Definitions.--Section 801 (42 U.S.C. 296 et seq.) is amended--
                (1) in paragraph (1), by inserting ``nurse-managed health
            centers'' after ``nursing centers,''; and
                (2) by adding at the end the following:
                ``(16) Nurse-managed health center.--The term `nurse-
            managed health center' means a nurse-practice arrangement,
            managed by advanced practice nurses, that provides primary care
            or wellness services to underserved or vulnerable populations
            and is associated with an accredited school of nursing,
            Federally qualified health center, or independent nonprofit
            health or social services agency.''.
        (a) Grants for Health Professions Education.--Title VIII (42 U.S.C.
    296 et seq.) is amended by striking section 807.
        (b) Advanced Education Nursing Grants.--Section 811(f) (42 U.S.C.
    296j(f)) is amended--
                (1) by striking paragraph (2);
                (2) by redesignating paragraph (3) as paragraph (2); and
                (3) in paragraph (2), as so redesignated, by striking
            ``that agrees'' and all that follows through the end and
            inserting: ``that agrees to expend the award--
                        ``(A) to train advanced education nurses who will
                    practice in health professional shortage areas
                    designated under section 332; or
                        ``(B) to increase diversity among advanced
                    education nurses.''.
        (c) Nurse Education, Practice, and Retention Grants.--Section 831
    (42 U.S.C. 296p) is amended--
                (1) in subsection (b), by amending paragraph (3) to read as
            follows:
                ``(3) providing coordinated care, quality care, and other
            skills needed to practice nursing;''; and
                (2) by striking subsection (e) and redesignating
            subsections (f) through (h) as subsections (e) through (g),
            respectively.
        (d) Student Loans.--Subsection (a) of section 836 (42 U.S.C. 297b)
    is amended--
                (1) by striking ``$2,500'' and inserting ``$3,300'';
                (2) by striking ``$4,000'' and inserting ``$5,200'';
                (3) by striking ``$13,000'' and inserting ``$17,000''; and
                (4) by adding at the end the following: ``Beginning with
            fiscal year 2012, the dollar amounts specified in this
            subsection shall be adjusted by an amount determined by the
            Secretary on an annual basis to reflect inflation.''.
        (e) Loan Repayment.--Section 846 (42 U.S.C. 297n) is amended--
                (1) in subsection (a), by amending paragraph (3) to read as
            follows:
                ``(3) who enters into an agreement with the Secretary to
            serve for a period of not less than 2 years--
                        ``(A) as a nurse at a health care facility with a
                    critical shortage of nurses; or
                        ``(B) as a faculty member at an accredited school
                    of nursing;''; and
                (2) in subsection (g)(1), by striking ``to provide health
            services'' each place it appears and inserting ``to provide
            health services or serve as a faculty member''.
        (f) Nurse Faculty Loan Program.--Paragraph (2) of section 846A(c)
    (42 U.S.C. 297n-1(c)) is amended by striking ``$30,000'' and all that
    follows through the semicolon and inserting ``$35,000, plus, beginning
    with fiscal year 2012, an amount determined by the Secretary on an
    annual basis to reflect inflation;''.
        (g) Public Service Announcements.--Title VIII (42 U.S.C. 296 et
    seq.) is amended by striking part H.
        (h) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296
    et seq.) is amended--
                (1) by redesignating section 810 (relating to prohibition
            against discrimination by schools on the basis of sex) as
            section 809 and moving such section so that it follows section
            808;
                (2) in sections 835, 836, 838, 840, and 842, by striking
            the term ``this subpart'' each place it appears and inserting
            ``this part'';
                (3) in section 836(h), by striking the last sentence;
                (4) in section 836, by redesignating subsection (l) as
            subsection (k);
                (5) in section 839, by striking ``839'' and all that
            follows through ``(a)'' and inserting ``839. (a)'';
                (6) in section 835(b), by striking ``841'' each place it
            appears and inserting ``871'';
                (7) by redesignating section 841 as section 871, moving
            part F to the end of the title, and redesignating such part as
            part H;
                (8) in part G--
                        (A) by redesignating section 845 as section 851;
                    and
                        (B) by redesignating part G as part F; and
                (9) in part I--
                        (A) by redesignating section 855 as section 861;
                    and
                        (B) by redesignating part I as part G.
        (i) Funding.--
                (1) In general.--Part H, as redesignated, of title VIII is
            amended by adding at the end the following:

    ``SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

        ``For the purpose of carrying out this title, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
                ``(1) $115,000,000 for fiscal year 2010.
                ``(2) $122,000,000 for fiscal year 2011.
                ``(3) $127,000,000 for fiscal year 2012.
                ``(4) $134,000,000 for fiscal year 2013.
                ``(5) $140,000,000 for fiscal year 2014.
                ``(6) $147,000,000 for fiscal year 2015.
                ``(7) $154,000,000 for fiscal year 2016.
                ``(8) $162,000,000 for fiscal year 2017.
                ``(9) $170,000,000 for fiscal year 2018.
                ``(10) $179,000,000 for fiscal year 2019.''.
                (2) Existing authorizations of appropriations.--
                        (A) Sections 831, 846, 846a, and 861.--Sections
                    831(g) (as so redesignated), 846(i)(1) (42 U.S.C.
                    297n(i)(1)), 846A(f) (42 U.S.C. 297n-1(f)), and 861(e)
                    (as so redesignated) are amended by striking ``2007''
                    each place it appears and inserting ``2019''.
                        (B) Section 871.--Section 871, as so redesignated,
                    is amended to read as follows:

    ``SEC. 871. FUNDING.

        ``For the purpose of carrying out parts B, C, and D (subject to
    section 845(g)), there are authorized to be appropriated such sums as
    may be necessary for each fiscal year through fiscal year 2019.''.

                      Subtitle C--Public Health Workforce

    SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.

        Part D of title III (42 U.S.C. 254b et seq.), as amended by section
    2211, is amended by adding at the end the following:

                     ``Subpart XII--Public Health Workforce

    ``SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.

        ``(a) Establishment.--There is established, within the Service, the
    Public Health Workforce Corps (in this subpart referred to as the
    `Corps'), for the purpose of ensuring an adequate supply of public
    health professionals throughout the Nation. The Corps shall consist
    of--
                ``(1) such officers of the Regular and Reserve Corps of the
            Service as the Secretary may designate; and
                ``(2) such civilian employees of the United States as the
            Secretary may appoint.
        ``(b) Administration.--Except as provided in subsection (c), the
    Secretary shall carry out this subpart acting through the Administrator
    of the Health Resources and Services Administration.
        ``(c) Placement and Assignment.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention, shall
    develop a methodology for placing and assigning Corps participants as
    public health professionals. Such methodology may allow for placing and
    assigning such participants in State, local, and tribal health
    departments and Federally qualified health centers (as defined in
    section 1861(aa)(4) of the Social Security Act).
        ``(d) Application of Certain Provisions.--The provisions of subpart
    II shall, except as inconsistent with this subpart, apply to the Public
    Health Workforce Corps in the same manner and to the same extent as
    such provisions apply to the National Health Service Corps established
    under section 331.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the programs carried out under this subpart.

    ``SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP PROGRAM.

        ``(a) Establishment.--The Secretary shall establish the Public
    Health Workforce Scholarship Program (referred to in this section as
    the `Program') for the purpose described in section 340L(a).
        ``(b) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1)(A) be accepted for enrollment, or be enrolled, as a
            full-time or part-time student in a course of study or program
            (approved by the Secretary) at an accredited graduate school or
            program of public health; or
                ``(B) have demonstrated expertise in public health and be
            accepted for enrollment, or be enrolled, as a full-time or
            part-time student in a course of study or program (approved by
            the Secretary) at--
                        ``(i) an accredited graduate school or program of
                    nursing; health administration, management, or policy;
                    preventive medicine; laboratory science; veterinary
                    medicine; or dental medicine; or
                        ``(ii) another accredited graduate school or
                    program, as deemed appropriate by Secretary;
                ``(2) be eligible for, or hold, an appointment as a
            commissioned officer in the Regular or Reserve Corps of the
            Service or be eligible for selection for civilian service in
            the Corps; and
                ``(3) sign and submit to the Secretary a written contract
            (described in subsection (c)) to serve full-time as a public
            health professional, upon the completion of the course of study
            or program involved, for the period of obligated service
            described in subsection (c)(2)(E).
        ``(c) Contract.--The written contract between the Secretary and an
    individual under subsection (b)(3) shall contain--
                ``(1) an agreement on the part of the Secretary that the
            Secretary will--
                        ``(A) provide the individual with a scholarship for
                    a period of years (not to exceed 4 academic years)
                    during which the individual shall pursue an approved
                    course of study or program to prepare the individual to
                    serve in the public health workforce; and
                        ``(B) accept (subject to the availability of
                    appropriated funds) the individual into the Corps;
                ``(2) an agreement on the part of the individual that the
            individual will--
                        ``(A) accept provision of such scholarship to the
                    individual;
                        ``(B) maintain full-time or part-time enrollment in
                    the approved course of study or program described in
                    subsection (b)(1) until the individual completes that
                    course of study or program;
                        ``(C) while enrolled in the approved course of
                    study or program, maintain an acceptable level of
                    academic standing (as determined by the educational
                    institution offering such course of study or program);
                        ``(D) if applicable, complete a residency or
                    internship; and
                        ``(E) serve full-time as a public health
                    professional for a period of time equal to the greater
                    of--
                                ``(i) 1 year for each academic year for
                            which the individual was provided a scholarship
                            under the Program; or
                                ``(ii) 2 years; and
                ``(3) an agreement by both parties as to the nature and
            extent of the scholarship assistance, which may include--
                        ``(A) payment of reasonable educational expenses of
                    the individual, including tuition, fees, books,
                    equipment, and laboratory expenses; and
                        ``(B) payment of a stipend of not more than $1,269
                    (plus, beginning with fiscal year 2011, an amount
                    determined by the Secretary on an annual basis to
                    reflect inflation) per month for each month of the
                    academic year involved, with the dollar amount of such
                    a stipend determined by the Secretary taking into
                    consideration whether the individual is enrolled full-
                    time or part-time.
        ``(d) Application of Certain Provisions.--The provisions of subpart
    III shall, except as inconsistent with this subpart, apply to the
    scholarship program under this section in the same manner and to the
    same extent as such provisions apply to the National Health Service
    Corps Scholarship Program established under section 338A.

    ``SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

        ``(a) Establishment.--The Secretary shall establish the Public
    Health Workforce Loan Repayment Program (referred to in this section as
    the `Program') for the purpose described in section 340L(a).
        ``(b) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1)(A) have a graduate degree from an accredited school
            or program of public health;
                ``(B) have demonstrated expertise in public health and have
            a graduate degree in a course of study or program (approved by
            the Secretary) from--
                        ``(i) an accredited school or program of nursing;
                    health administration, management, or policy;
                    preventive medicine; laboratory science; veterinary
                    medicine; or dental medicine; or
                        ``(ii) another accredited school or program
                    approved by the Secretary; or
                ``(C) be enrolled as a full-time or part-time student in
            the final year of a course of study or program (approved by the
            Secretary) offered by a school or program described in
            subparagraph (A) or (B), leading to a graduate degree;
                ``(2) be eligible for, or hold, an appointment as a
            commissioned officer in the Regular or Reserve Corps of the
            Service or be eligible for selection for civilian service in
            the Corps;
                ``(3) if applicable, complete a residency or internship;
            and
                ``(4) sign and submit to the Secretary a written contract
            (described in subsection (c)) to serve full-time as a public
            health professional for the period of obligated service
            described in subsection (c)(2).
        ``(c) Contract.--The written contract between the Secretary and an
    individual under subsection (b)(4) shall contain--
                ``(1) an agreement by the Secretary to repay on behalf of
            the individual loans incurred by the individual in the pursuit
            of the relevant public health workforce educational degree in
            accordance with the terms of the contract;
                ``(2) an agreement by the individual to serve full-time as
            a public health professional for a period of time equal to 2
            years or such longer period as the individual may agree to; and
                ``(3) in the case of an individual described in subsection
            (b)(1)(C) who is in the final year of study and who has
            accepted employment as a public health professional, in
            accordance with subsection 340L(c), an agreement on the part of
            the individual to complete the education or training, maintain
            an acceptable level of academic standing (as determined by the
            educational institution offering the course of study or
            training), and serve the period of obligated service described
            in paragraph (2).
        ``(d) Payments.--
                ``(1) In general.--A loan repayment provided for an
            individual under a written contract under the Program shall
            consist of payment, in accordance with paragraph (2), on behalf
            of the individual of the principal, interest, and related
            expenses on government and commercial loans received by the
            individual regarding the undergraduate or graduate education of
            the individual (or both), which loans were made for reasonable
            educational expenses, including tuition, fees, books,
            equipment, and laboratory expenses, incurred by the individual.
                ``(2) Payments for years served.--
                        ``(A) In general.--For each year of obligated
                    service that an individual contracts to serve under
                    subsection (c), the Secretary may pay up to $35,000
                    (plus, beginning with fiscal year 2012, an amount
                    determined by the Secretary on an annual basis to
                    reflect inflation) on behalf of the individual for
                    loans described in paragraph (1).
                        ``(B) Repayment schedule.--Any arrangement made by
                    the Secretary for the making of loan repayments in
                    accordance with this subsection shall provide that any
                    repayments for a year of obligated service shall be
                    made no later than the end of the fiscal year in which
                    the individual completes such year of service.
        ``(e) Application of Certain Provisions.--The provisions of subpart
    III shall, except as inconsistent with this subpart, apply to the loan
    repayment program under this section in the same manner and to the same
    extent as such provisions apply to the National Health Service Corps
    Loan Repayment Program established under section 338B.''.

    SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.

        Section 765 (42 U.S.C. 295) is amended to read as follows:

    ``SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.

        ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration and in consultation
    with the Director of the Centers for Disease Control and Prevention,
    shall establish a public health workforce training and enhancement
    program consisting of awarding grants and contracts under subsection
    (b).
        ``(b) Grants and Contracts.--The Secretary shall award grants and
    contracts to eligible entities--
                ``(1) to plan, develop, operate, or participate in, an
            accredited professional training program in the field of public
            health (including such a program in nursing; health
            administration, management, or policy; preventive medicine;
            laboratory science; veterinary medicine; or dental medicine)
            for members of the public health workforce including mid-career
            professionals;
                ``(2) to provide financial assistance in the form of
            traineeships and fellowships to students who are participants
            in any such program and who plan to specialize or work in the
            field of public health;
                ``(3) to plan, develop, operate, or participate in a
            program for the training of public health professionals who
            plan to teach in any program described in paragraph (1); and
                ``(4) to provide financial assistance in the form of
            traineeships and fellowships to public health professionals who
            are participants in any program described in paragraph (1) and
            who plan to teach in the field of public health, including
            nursing; health administration, management, or policy;
            preventive medicine; laboratory science; veterinary medicine;
            or dental medicine.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited health professions school, including an
            accredited graduate school or program of public health;
            nursing; health administration, management, or policy;
            preventive medicine; laboratory science; veterinary medicine;
            or dental medicine;
                ``(2) a State, local, or tribal health department;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of public health professionals who
            serve in underserved communities.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) Training individuals in public health specialties
            experiencing a significant shortage of public health
            professionals (as determined by the Secretary).
                ``(4) Training the greatest percentage, or significantly
            improving the percentage, of public health professionals
            serving in the Federal Government or a State, local, or tribal
            government.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.

        Section 766 (42 U.S.C. 295a) is amended--
                (1) in subsection (b)(1), by striking ``in furtherance of
            the goals established by the Secretary for the year 2000'' and
            inserting ``in furtherance of the goals established by the
            Secretary in the national prevention and wellness strategy
            under section 3121''; and
                (2) by adding at the end the following:
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT
                  PROGRAM.

        Section 768 (42 U.S.C. 295c) is amended to read as follows:

    ``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT
                  PROGRAM.

        ``(a) Grants.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration and in consultation
    with the Director of the Centers for Disease Control and Prevention,
    shall award grants to, or enter into contracts with, eligible entities
    to provide training to graduate medical residents in preventive
    medicine specialties.
        ``(b) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited school of public health or school of
            medicine or osteopathic medicine;
                ``(2) an accredited public or private hospital;
                ``(3) a State, local, or tribal health department; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(c) Use of Funds.--Amounts received under a grant or contract
    under this section shall be used to--
                ``(1) plan, develop (including the development of
            curricula), operate, or participate in an accredited residency
            or internship program in preventive medicine or public health;
                ``(2) defray the costs of practicum experiences, as
            required in such a program; and
                ``(3) establish, maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    preventive medicine and public health; or
                        ``(B) programs that improve clinical teaching in
                    preventive medicine and public health.
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Section 799C, as added by section 2216 of this
    division, is amended by adding at the end the following:
        ``(b) Public Health Workforce.--For the purpose of carrying out
    subpart XII of part D of title III and sections 765, 766, and 768, in
    addition to any other amounts authorized to be appropriated for such
    purpose, there are authorized to be appropriated, out of any monies in
    the Public Health Investment Fund, the following:
                ``(1) $51,000,000 for fiscal year 2010.
                ``(2) $54,000,000 for fiscal year 2011.
                ``(3) $57,000,000 for fiscal year 2012.
                ``(4) $59,000,000 for fiscal year 2013.
                ``(5) $62,000,000 for fiscal year 2014.
                ``(6) $65,000,000 for fiscal year 2015.
                ``(7) $68,000,000 for fiscal year 2016.
                ``(8) $72,000,000 for fiscal year 2017.
                ``(9) $75,000,000 for fiscal year 2018.
                ``(10) $79,000,000 for fiscal year 2019.''.
        (b) Existing Authorization of Appropriations.--Subpart (a) of
    section 770 (42 U.S.C. 295e) is amended by striking ``2002'' and
    inserting ``2019''.

         Subtitle D--Adapting Workforce to Evolving Health System Needs

               PART 1--HEALTH PROFESSIONS TRAINING FOR DIVERSITY

    SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STUDENTS, LOAN REPAYMENTS AND
                  FELLOWSHIPS REGARDING FACULTY POSITIONS, AND EDUCATIONAL
                  ASSISTANCE IN THE HEALTH PROFESSIONS REGARDING
                  INDIVIDUALS FROM DISADVANTAGED BACKGROUNDS.

        Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) is amended by
    striking ``not more than $20,000'' and all that follows through the end
    of the paragraph and inserting: ``not more than $35,000 (plus,
    beginning with fiscal year 2012, an amount determined by the Secretary
    on an annual basis to reflect inflation) of the principal and interest
    of the educational loans of such individuals.''

    SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.

        Subsection (b) of section 821 (42 U.S.C. 296m) is amended--
                (1) in the heading, by striking ``Guidance'' and inserting
            ``Consultation''; and
                (2) by striking ``shall take into consideration'' and all
            that follows through ``consult with nursing associations'' and
            inserting ``shall, as appropriate, consult with nursing
            associations''.

    SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.

        Title VII (42 U.S.C. 292 et seq.) is amended by inserting after
    section 739 the following:

    ``SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY
                  PROGRAMS.

        ``The Secretary shall, to the extent practicable, coordinate the
    activities carried out under this part and section 821 in order to
    enhance the effectiveness of such activities and avoid duplication of
    effort.''.

                  PART 2--INTERDISCIPLINARY TRAINING PROGRAMS

    SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY TRAINING FOR HEALTH CARE
                  PROFESSIONALS.

        Section 741 (42 U.S.C. 293e) is amended--
                (1) in the section heading, by striking ``Grants for Health
            Professions Education'' and inserting ``Cultural and Linguistic
            Competency Training for Health Care Professionals'';
                (2) by redesignating subsection (b) as subsection (h); and
                (3) by striking subsection (a) and inserting the following:
        ``(a) Program.--The Secretary shall establish a cultural and
    linguistic competency training program for health care professionals,
    including nurse professionals, consisting of awarding grants and
    contracts under subsection (b).
        ``(b) Cultural and Linguistic Competency Training.--The Secretary
    shall award grants and contracts to eligible entities--
                ``(1) to test, develop, and evaluate models of cultural and
            linguistic competency training (including continuing education)
            for health professionals; and
                ``(2) to implement cultural and linguistic competency
            training programs for health professionals developed under
            paragraph (1) or otherwise.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (b), an entity shall be--
                ``(1) an accredited health professions school or program;
                ``(2) an academic health center;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preference.--In awarding grants and contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Addressing, or partnering with an entity with
            experience addressing, the cultural and linguistic competency
            needs of the population to be served through the grant or
            contract.
                ``(2) Addressing health disparities.
                ``(3) Placing health professionals in regions experiencing
            significant changes in the cultural and linguistic demographics
            of populations, including communities along the United States-
            Mexico border.
                ``(4) Carrying out activities described in subsection (b)
            with respect to more than one health profession discipline,
            specialty, or subspecialty.
        ``(e) Consultation.--The Secretary shall carry out this section in
    consultation with the heads of appropriate health agencies and offices
    in the Department of Health and Human Services, including the Office of
    Minority Health.
        ``(f) Definition.--In this section, the term `health disparities'
    has the meaning given to the term in section 3171.
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

        Part D of title VII (42 U.S.C. 294 et seq.) is amended by adding at
    the end the following:

    ``SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

        ``(a) Program.--The Secretary shall establish an innovations in
    interdisciplinary care training program consisting of awarding grants
    and contracts under subsection (b).
        ``(b) Training Programs.--The Secretary shall award grants to, or
    enter into contracts with, eligible entities--
                ``(1) to test, develop, and evaluate health professional
            training programs (including continuing education) designed to
            promote--
                        ``(A) the delivery of health services through
                    interdisciplinary and team-based models, which may
                    include patient-centered medical home models,
                    medication therapy management models, and models
                    integrating physical, mental, or oral health services;
                    and
                        ``(B) coordination of the delivery of health care
                    within and across settings, including health care
                    institutions, community-based settings, and the
                    patient's home; and
                ``(2) to implement such training programs developed under
            paragraph (1) or otherwise.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (b), an entity shall be--
                ``(1) an accredited health professions school or program;
                ``(2) an academic health center;
                ``(3) a public or private nonprofit entity (including an
            area health education center or a geriatric education center);
            or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preferences.--In awarding grants and contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            increasing the percentage, of health professionals who serve in
            underserved communities.
                ``(2) Broad interdisciplinary team-based collaborations.
                ``(3) Addressing health disparities.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definitions.--In this section:
                ``(1) The term `health disparities' has the meaning given
            the term in section 3171.
                ``(2) The term `interdisciplinary' means collaboration
            across health professions and specialties, which may include
            public health, nursing, allied health, and appropriate medical
            specialties.''.

         PART 3--ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND
                                   ASSESSMENT

    SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

        Subpart 1 of part E of title VII (42 U.S.C. 294n et seq.) is
    amended by adding at the end the following:

    ``SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

        ``(a) Advisory Committee.--The Secretary, acting through the
    Assistant Secretary for Health, shall establish a permanent advisory
    committee to be known as the Advisory Committee on Health Workforce
    Evaluation and Assessment (referred to in this section as the `Advisory
    Committee').
        ``(b) Responsibilities.--The Advisory Committee shall--
                ``(1) not later than 1 year after the date of the
            establishment of the Advisory Committee, submit recommendations
            to the Secretary on--
                        ``(A) classifications of the health workforce to
                    ensure consistency of data collection on the health
                    workforce; and
                        ``(B) based on such classifications, standardized
                    methodologies and procedures to enumerate the health
                    workforce;
                ``(2) not later than 2 years after the date of the
            establishment of the Advisory Committee, submit recommendations
            to the Secretary on--
                        ``(A) the supply, diversity, and geographic
                    distribution of the health workforce;
                        ``(B) the retention of the health workforce to
                    ensure quality and adequacy of such workforce; and
                        ``(C) policies to carry out the recommendations
                    made pursuant to subparagraphs (A) and (B); and
                ``(3) not later than 4 years after the date of the
            establishment of the Advisory Committee, and every 2 years
            thereafter, submit updated recommendations to the Secretary
            under paragraphs (1) and (2).
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Advisory Committee, including coordinating and supporting the
    dissemination of the recommendations of the Advisory Committee.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Secretary shall appoint 15
            members to serve on the Advisory Committee.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Advisory Committee for a term of 3 years
                    and may reappoint such members, but the Secretary may
                    not appoint any member to serve more than a total of 6
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to the
                    Advisory Committee under paragraph (1)--
                                ``(i) 5 shall be appointed for a term of 1
                            year;
                                ``(ii) 5 shall be appointed for a term of 2
                            years; and
                                ``(iii) 5 shall be appointed for a term of
                            3 years.
                ``(3) Qualifications.--Members of the Advisory Committee
            shall be appointed from among individuals who possess expertise
            in at least one of the following areas:
                        ``(A) Conducting and interpreting health workforce
                    market analysis, including health care labor workforce
                    analysis.
                        ``(B) Conducting and interpreting health finance
                    and economics research.
                        ``(C) Delivering and administering health care
                    services.
                        ``(D) Delivering and administering health workforce
                    education and training.
                ``(4) Representation.--In appointing members of the
            Advisory Committee, the Secretary shall--
                        ``(A) include no less than one representative of
                    each of--
                                ``(i) health professionals within the
                            health workforce;
                                ``(ii) health care patients and consumers;
                                ``(iii) employers;
                                ``(iv) labor unions; and
                                ``(v) third-party health payors; and
                        ``(B) ensure that--
                                ``(i) all areas of expertise described in
                            paragraph (3) are represented;
                                ``(ii) the members of the Advisory
                            Committee include members who, collectively,
                            have significant experience working with--
                                        ``(I) populations in urban and
                                    federally designated rural and
                                    nonmetropolitan areas; and
                                        ``(II) populations who are
                                    underrepresented in the health
                                    professions, including underrepresented
                                    minority groups; and
                                ``(iii) individuals who are directly
                            involved in health professions education or
                            practice do not constitute a majority of the
                            members of the Advisory Committee.
                ``(5) Disclosure and conflicts of interest.--Members of the
            Advisory Committee shall not be considered employees of the
            Federal Government by reason of service on the Advisory
            Committee, except members of the Advisory Committee shall be
            considered to be special Government employees within the
            meaning of section 107 of the Ethics in Government Act of 1978
            (5 U.S.C. App.) and section 208 of title 18, United States
            Code, for the purposes of disclosure and management of
            conflicts of interest under those sections.
                ``(6) No pay; receipt of travel expenses.--Members of the
            Advisory Committee shall not receive any pay for service on the
            Committee, but may receive travel expenses, including a per
            diem, in accordance with applicable provisions of subchapter I
            of chapter 57 of title 5, United States Code.
        ``(e) Consultation.--In carrying out this section, the Secretary
    shall consult with the Secretary of Education and the Secretary of
    Labor.
        ``(f) Collaboration.--The Advisory Committee shall collaborate with
    the advisory bodies at the Health Resources and Services
    Administration, the National Advisory Council (as authorized in section
    337), the Advisory Committee on Training in Primary Care Medicine and
    Dentistry (as authorized in section 749A), the Advisory Committee on
    Interdisciplinary, Community-Based Linkages (as authorized in section
    756), the Advisory Council on Graduate Medical Education (as authorized
    in section 762), and the National Advisory Council on Nurse Education
    and Practice (as authorized in section 851).
        ``(g) FACA.--The Federal Advisory Committee Act (5 U.S.C. App.)
    except for section 14 of such Act shall apply to the Advisory Committee
    under this section only to the extent that the provisions of such Act
    do not conflict with the requirements of this section.
        ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on the activities of the Advisory Committee.
        ``(i) Definition.--In this section, the term `health workforce'
    includes all health care providers with direct patient care and support
    responsibilities, including physicians, nurses, physician assistants,
    pharmacists, oral health professionals (as defined in section 749(f)),
    allied health professionals, mental and behavioral professionals, and
    public health professionals (including veterinarians engaged in public
    health practice).''.

                      PART 4--HEALTH WORKFORCE ASSESSMENT

    SEC. 2271. HEALTH WORKFORCE ASSESSMENT.

        (a) In General.--Section 761 (42 U.S.C. 294n) is amended--
                (1) by redesignating subsection (c) as subsection (e); and
                (2) by striking subsections (a) and (b) and inserting the
            following:
        ``(a) In General.--The Secretary shall, based upon the
    classifications and standardized methodologies and procedures developed
    by the Advisory Committee on Health Workforce Evaluation and Assessment
    under section 764(b)--
                ``(1) collect data on the health workforce (as defined in
            section 764(i)), disaggregated by field, discipline, and
            specialty, with respect to--
                        ``(A) the supply (including retention) of health
                    professionals relative to the demand for such
                    professionals;
                        ``(B) the diversity of health professionals
                    (including with respect to race, ethnic background, and
                    gender); and
                        ``(C) the geographic distribution of health
                    professionals; and
                ``(2) collect such data on individuals participating in the
            programs authorized by subtitles A, B, and C and part 1 of
            subtitle D of title II of subdivision C of the America's
            Affordable Health Choices Act of 2009.
        ``(b) Grants and Contracts for Health Workforce Analysis.--
                ``(1) In general.--The Secretary may award grants or
            contracts to eligible entities to carry out subsection (a).
                ``(2) Eligibility.--To be eligible for a grant or contract
            under this subsection, an entity shall be--
                        ``(A) an accredited health professions school or
                    program;
                        ``(B) an academic health center;
                        ``(C) a State, local, or tribal government;
                        ``(D) a public or private entity; or
                        ``(E) a consortium of 2 or more entities described
                    in subparagraphs (A) through (D).
        ``(c) Collaboration and Data Sharing.--The Secretary shall
    collaborate with Federal departments and agencies, health professions
    organizations (including health professions education organizations),
    and professional medical societies for the purpose of carrying out
    subsection (a).
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the data collected under subsection (a).''.
        (b) Period Before Completion of National Strategy.--Pending
    completion of the classifications and standardized methodologies and
    procedures developed by the Advisory Committee on Health Workforce
    Evaluation and Assessment under section 764(b) of the Public Health
    Service Act, as added by section 2261, the Secretary of Health and
    Human Services, acting through the Administrator of the Health
    Resources and Services Administration and in consultation with such
    Advisory Committee, may make a judgment about the classifications,
    methodologies, and procedures to be used for collection of data under
    section 761(a) of the Public Health Service Act, as amended by this
    section.

                    PART 5--AUTHORIZATION OF APPROPRIATIONS

    SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Section 799C, as added by section 2216 of this
    division, is amended by adding at the end the following:
        ``(c) Health Professions Training for Diversity.--For the purpose
    of carrying out sections 736, 737, 738, 739, and 739A, in addition to
    any other amounts authorized to be appropriated for such purpose, there
    are authorized to be appropriated, out of any monies in the Public
    Health Investment Fund, the following:
                ``(1) $90,000,000 for fiscal year 2010.
                ``(2) $97,000,000 for fiscal year 2011.
                ``(3) $100,000,000 for fiscal year 2012.
                ``(4) $104,000,000 for fiscal year 2013.
                ``(5) $110,000,000 for fiscal year 2014.
                ``(6) $116,000,000 for fiscal year 2015.
                ``(7) $121,000,000 for fiscal year 2016.
                ``(8) $127,000,000 for fiscal year 2017.
                ``(9) $133,000,000 for fiscal year 2018.
                ``(10) $140,000,000 for fiscal year 2019.
        ``(d) Interdisciplinary Training Programs, Advisory Committee on
    Health Workforce Evaluation and Assessment, and Health Workforce
    Assessment.--For the purpose of carrying out sections 741, 759, 761,
    and 764, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
                ``(1) $91,000,000 for fiscal year 2010.
                ``(2) $97,000,000 for fiscal year 2011.
                ``(3) $101,000,000 for fiscal year 2012.
                ``(4) $105,000,000 for fiscal year 2013.
                ``(5) $111,000,000 for fiscal year 2014.
                ``(6) $117,000,000 for fiscal year 2015.
                ``(7) $122,000,000 for fiscal year 2016.
                ``(8) $129,000,000 for fiscal year 2017.
                ``(9) $135,000,000 for fiscal year 2018.
                ``(10) $141,000,000 for fiscal year 2019.''.
        (b) Existing Authorizations of Appropriations.--
                (1) Section 736.--Paragraph (1) of section 736(h) (42
            U.S.C. 293(h)) is amended by striking ``2002'' and inserting
            ``2019''.
                (2) Sections 737, 738, and 739.--Subsections (a), (b), and
            (c) of section 740 are amended by striking ``2002'' each place
            it appears and inserting ``2019''.
                (3) Section 741.--Subsection (h), as so redesignated, of
            section 741 is amended--
                        (A) by striking ``and'' after ``fiscal year
                    2003,''; and
                        (B) by inserting ``, and such sums as may be
                    necessary for subsequent fiscal years through the end
                    of fiscal year 2019'' before the period at the end.
                (4) Section 761.--Subsection (e)(1), as so redesignated, of
            section 761 is amended by striking ``2002'' and inserting
            ``2019''.

                       TITLE III--PREVENTION AND WELLNESS

    SEC. 2301. PREVENTION AND WELLNESS.

        (a) In General.--The Public Health Service Act (42 U.S.C. 201 et
    seq.) is amended by adding at the end the following:

                     ``TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

    ``SEC. 3111. PREVENTION AND WELLNESS TRUST.

        ``(a) Deposits Into Trust.--There is established a Prevention and
    Wellness Trust. There are authorized to be appropriated to the Trust--
                ``(1) amounts described in section 2002(b)(2)(ii) of the
            America's Affordable Health Choices Act of 2009 for each fiscal
            year; and
                ``(2) in addition, out of any monies in the Public Health
            Investment Fund--
                        ``(A) for fiscal year 2010, $2,400,000,000;
                        ``(B) for fiscal year 2011, $2,800,000,000;
                        ``(C) for fiscal year 2012, $3,100,000,000;
                        ``(D) for fiscal year 2013, $3,400,000,000;
                        ``(E) for fiscal year 2014, $3,500,000,000;
                        ``(F) for fiscal year 2015, $3,600,000,000;
                        ``(G) for fiscal year 2016, $3,700,000,000;
                        ``(H) for fiscal year 2017, $3,900,000,000;
                        ``(I) for fiscal year 2018, $4,300,000,000; and
                        ``(J) for fiscal year 2019, $4,600,000,000.
        ``(b) Availability of Funds.--Amounts in the Prevention and
    Wellness Trust shall be available, as provided in advance in
    appropriation Acts, for carrying out this title.
        ``(c) Allocation.--Of the amounts authorized to be appropriated in
    subsection (a)(2), there are authorized to be appropriated--
                ``(1) for carrying out subtitle C (Prevention Task Forces),
            $35,000,000 for each of fiscal years 2010 through 2019;
                ``(2) for carrying out subtitle D (Prevention and Wellness
            Research)--
                        ``(A) for fiscal year 2010, $100,000,000;
                        ``(B) for fiscal year 2011, $150,000,000;
                        ``(C) for fiscal year 2012, $200,000,000;
                        ``(D) for fiscal year 2013, $250,000,000;
                        ``(E) for fiscal year 2014, $300,000,000;
                        ``(F) for fiscal year 2015, $315,000,000;
                        ``(G) for fiscal year 2016, $331,000,000;
                        ``(H) for fiscal year 2017, $347,000,000;
                        ``(I) for fiscal year 2018, $364,000,000; and
                        ``(J) for fiscal year 2019, $383,000,000.
                ``(3) for carrying out subtitle E (Delivery of Community
            Preventive and Wellness Services)--
                        ``(A) for fiscal year 2010, $1,100,000,000;
                        ``(B) for fiscal year 2011, $1,300,000,000;
                        ``(C) for fiscal year 2012, $1,400,000,000;
                        ``(D) for fiscal year 2013, $1,600,000,000;
                        ``(E) for fiscal year 2014, $1,700,000,000;
                        ``(F) for fiscal year 2015, $1,800,000,000;
                        ``(G) for fiscal year 2016, $1,900,000,000;
                        ``(H) for fiscal year 2017, $2,000,000,000;
                        ``(I) for fiscal year 2018, $2,100,000,000; and
                        ``(J) for fiscal year 2019, $2,300,000,000.
                ``(4) for carrying out section 3161 (Core Public Health
            Infrastructure and Activities for State and Local Health
            Departments)--
                        ``(A) for fiscal year 2010, $800,000,000;
                        ``(B) for fiscal year 2011, $1,000,000,000;
                        ``(C) for fiscal year 2012, $1,100,000,000;
                        ``(D) for fiscal year 2013, $1,200,000,000;
                        ``(E) for fiscal year 2014, $1,300,000,000;
                        ``(F) for fiscal year 2015, $1,400,000,000;
                        ``(G) for fiscal year 2016, $1,500,000,000;
                        ``(H) for fiscal year 2017, $1,600,000,000;
                        ``(I) for fiscal year 2018, $1,800,000,000; and
                        ``(J) for fiscal year 2019, $1,900,000,000; and
                ``(5) for carrying out section 3162 (Core Public Health
            Infrastructure and Activities for CDC), $400,000,000 for each
            of fiscal years 2010 through 2019.

            ``Subtitle B--National Prevention and Wellness Strategy

    ``SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRATEGY.

        ``(a) In General.--The Secretary shall submit to the Congress
    within one year after the date of the enactment of this section, and at
    least every 2 years thereafter, a national strategy that is designed to
    improve the Nation's health through evidence-based clinical and
    community prevention and wellness activities (in this section referred
    to as `prevention and wellness activities'), including core public
    health infrastructure improvement activities.
        ``(b) Contents.--The strategy under subsection (a) shall include
    each of the following:
                ``(1) Identification of specific national goals and
            objectives in prevention and wellness activities that take into
            account appropriate public health measures and standards,
            including departmental measures and standards (including
            Healthy People and National Public Health Performance
            Standards).
                ``(2) Establishment of national priorities for prevention
            and wellness, taking into account unmet prevention and wellness
            needs.
                ``(3) Establishment of national priorities for research on
            prevention and wellness, taking into account unanswered
            research questions on prevention and wellness.
                ``(4) Identification of health disparities in prevention
            and wellness.
                ``(5) A plan for addressing and implementing paragraphs (1)
            through (4).
        ``(c) Consultation.--In developing or revising the strategy under
    subsection (a), the Secretary shall consult with the following:
                ``(1) The heads of appropriate health agencies and offices
            in the Department, including the Office of the Surgeon General
            of the Public Health Service, the Office of Minority Health,
            and the Office on Women's Health.
                ``(2) As appropriate, the heads of other Federal
            departments and agencies whose programs have a significant
            impact upon health (as determined by the Secretary).
                ``(3) As appropriate, nonprofit and for-profit entities.
                ``(4) The Association of State and Territorial Health
            Officials and the National Association of County and City
            Health Officials.

                      ``Subtitle C--Prevention Task Forces

    ``SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERVICES.

        ``(a) In General.--The Secretary, acting through the Director of
    the Agency for Healthcare Research and Quality, shall establish a
    permanent task force to be known as the Task Force on Clinical
    Preventive Services (in this section referred to as the `Task Force').
        ``(b) Responsibilities.--The Task Force shall--
                ``(1) identify clinical preventive services for review;
                ``(2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of clinical
            preventive services identified under paragraph (1) for the
            purpose of developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(3) as appropriate, take into account health disparities
            in developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(4) identify gaps in clinical preventive services
            research and evaluation and recommend priority areas for such
            research and evaluation;
                ``(5) as appropriate, consult with the clinical prevention
            stakeholders board in accordance with subsection (f);
                ``(6) as appropriate, consult with the Task Force on
            Community Preventive Services established under section 3132;
            and
                ``(7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to
                    serve on the Task Force after the enactment of this
                    title--
                                ``(i) 10 shall be appointed for a term of 2
                            years;
                                ``(ii) 10 shall be appointed for a term of
                            4 years; and
                                ``(iii) 10 shall be appointed for a term of
                            6 years.
                ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                        ``(A) Health promotion and disease prevention.
                        ``(B) Evaluation of research and systematic
                    evidence reviews.
                        ``(C) Application of systematic evidence reviews to
                    clinical decisionmaking or health policy.
                        ``(D) Clinical primary care in child and adolescent
                    health.
                        ``(E) Clinical primary care in adult health,
                    including women's health.
                        ``(F) Clinical primary care in geriatrics.
                        ``(G) Clinical counseling and behavioral services
                    for primary care patients.
                ``(4) Representation.--In appointing members of the Task
            Force, the Secretary shall ensure that--
                        ``(A) all areas of expertise described in paragraph
                    (3) are represented; and
                        ``(B) the members of the Task Force include
                    practitioners who, collectively, have significant
                    experience treating racially and ethnically diverse
                    populations.
        ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
        ``(f) Clinical Prevention Stakeholders Board.--
                ``(1) In general.--The Task Force shall convene a clinical
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            clinical preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of clinical preventive
            services.
                ``(2) Membership.--The members of the clinical prevention
            stakeholders board shall include representatives of the
            following:
                        ``(A) Health care consumers and patient groups.
                        ``(B) Providers of clinical preventive services,
                    including community-based providers.
                        ``(C) Federal departments and agencies, including--
                                ``(i) appropriate health agencies and
                            offices in the Department, including the Office
                            of the Surgeon General of the Public Health
                            Service, the Office of Minority Health, and the
                            Office on Women's Health; and
                                ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                        ``(D) Private health care payors.
                ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the clinical prevention stakeholders board shall--
                        ``(A) recommend clinical preventive services for
                    review by the Task Force;
                        ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                        ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                        ``(D) assist with efforts regarding dissemination
                    of recommendations by the Director of the Agency for
                    Healthcare Research and Quality.
        ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the clinical prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force, except members of the Task Force shall be considered to
    be special Government employees within the meaning of section 107 of
    the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of
    title 18, United States Code, for the purposes of disclosure and
    management of conflicts of interest under those sections.
        ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the clinical prevention stakeholders board shall not receive
    any pay for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
        ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
        ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).

    ``SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE SERVICES.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall establish a
    permanent task force to be known as the Task Force on Community
    Preventive Services (in this section referred to as the `Task Force').
        ``(b) Responsibilities.--The Task Force shall--
                ``(1) identify community preventive services for review;
                ``(2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of
            community preventive services identified under paragraph (1)
            for the purpose of developing, updating, publishing, and
            disseminating evidence-based recommendations on the use of such
            services;
                ``(3) as appropriate, take into account health disparities
            in developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(4) identify gaps in community preventive services
            research and evaluation and recommend priority areas for such
            research and evaluation;
                ``(5) as appropriate, consult with the community prevention
            stakeholders board in accordance with subsection (f);
                ``(6) as appropriate, consult with the Task Force on
            Clinical Preventive Services established under section 3131;
            and
                ``(7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to
                    serve on the Task Force after the enactment of this
                    section--
                                ``(i) 10 shall be appointed for a term of 2
                            years;
                                ``(ii) 10 shall be appointed for a term of
                            4 years; and
                                ``(iii) 10 shall be appointed for a term of
                            6 years.
                ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                        ``(A) Public health.
                        ``(B) Evaluation of research and systematic
                    evidence reviews.
                        ``(C) Disciplines relevant to community preventive
                    services, including health promotion; disease
                    prevention; chronic disease; worksite health;
                    qualitative and quantitative analysis; and health
                    economics, policy, law, and statistics.
                ``(4) Representation.--In appointing members of the Task
            Force, the Secretary--
                        ``(A) shall ensure that all areas of expertise
                    described in paragraph (3) are represented;
                        ``(B) shall ensure that such members include
                    sufficient representatives of each of--
                                ``(i) State health officers;
                                ``(ii) local health officers;
                                ``(iii) health care practitioners; and
                                ``(iv) public health practitioners; and
                        ``(C) shall appoint individuals who, collectively,
                    have significant experience working with racially and
                    ethnically diverse populations.
        ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
        ``(f) Community Prevention Stakeholders Board.--
                ``(1) In general.--The Task Force shall convene a community
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            community preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of community preventive
            services.
                ``(2) Membership.--The members of the community prevention
            stakeholders board shall include representatives of the
            following:
                        ``(A) Health care consumers and patient groups.
                        ``(B) Providers of community preventive services,
                    including community-based providers.
                        ``(C) Federal departments and agencies, including--
                                ``(i) appropriate health agencies and
                            offices in the Department, including the Office
                            of the Surgeon General of the Public Health
                            Service, the Office of Minority Health, and the
                            Office on Women's Health; and
                                ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                        ``(D) Private health care payors.
                ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the community prevention stakeholders board shall--
                        ``(A) recommend community preventive services for
                    review by the Task Force;
                        ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                        ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                        ``(D) assist with efforts regarding dissemination
                    of recommendations by the Director of the Centers for
                    Disease Control and Prevention.
        ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the community prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force, except members of the Task Force shall be considered to
    be special Government employees within the meaning of section 107 of
    the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of
    title 18, United States Code, for the purposes of disclosure and
    management of conflicts of interest under those sections.
        ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the community prevention stakeholders board shall not receive
    any pay for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
        ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
        ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).

                 ``Subtitle D--Prevention and Wellness Research

    ``SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIVITY COORDINATION.

        ``In conducting or supporting research on prevention and wellness,
    the Director of the Centers for Disease Control and Prevention, the
    Director of the National Institutes of Health, and the heads of other
    agencies within the Department of Health and Human Services conducting
    or supporting such research, shall take into consideration the national
    strategy under section 3121 and the recommendations of the Task Force
    on Clinical Preventive Services under section 3131 and the Task Force
    on Community Preventive Services under section 3132.

    ``SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCH GRANTS.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall conduct, or award
    grants to eligible entities to conduct, research in priority areas
    identified by the Secretary in the national strategy under section 3121
    or by the Task Force on Community Preventive Services as required by
    section 3132.
        ``(b) Eligibility.--To be eligible for a grant under this section,
    an entity shall be--
                ``(1) a State, local, or tribal department of health;
                ``(2) a public or private nonprofit entity; or
                ``(3) a consortium of 2 or more entities described in
            paragraphs (1) and (2).
        ``(c) Report.--The Secretary shall submit to the Congress an annual
    report on the program of research under this section.

      ``Subtitle E--Delivery of Community Prevention and Wellness Services

    ``SEC. 3151. COMMUNITY PREVENTION AND WELLNESS SERVICES GRANTS.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall establish a
    program for the delivery of community preventive and wellness services
    consisting of awarding grants to eligible entities--
                ``(1) to provide evidence-based, community preventive and
            wellness services in priority areas identified by the Secretary
            in the national strategy under section 3121; or
                ``(2) to plan such services.
        ``(b) Eligibility.--
                ``(1) Definition.--To be eligible for a grant under this
            section, an entity shall be--
                        ``(A) a State, local, or tribal department of
                    health;
                        ``(B) a public or private entity; or
                        ``(C) a consortium of--
                                ``(i) 2 or more entities described in
                            subparagraph (A) or (B); and
                                ``(ii) a community partnership representing
                            a Health Empowerment Zone.
                ``(2) Health empowerment zone.--In this subsection, the
            term `Health Empowerment Zone' means an area--
                        ``(A) in which multiple community preventive and
                    wellness services are implemented in order to address
                    one or more health disparities, including those
                    identified by the Secretary in the national strategy
                    under section 3121; and
                        ``(B) which is represented by a community
                    partnership that demonstrates community support and
                    coordination with State, local, or tribal health
                    departments and includes--
                                ``(i) a broad cross section of
                            stakeholders;
                                ``(ii) residents of the community; and
                                ``(iii) representatives of entities that
                            have a history of working within and serving
                            the community.
        ``(c) Preferences.--In awarding grants under this section, the
    Secretary shall give preference to entities that--
                ``(1) will address one or more goals or objectives
            identified by the Secretary in the national strategy under
            section 3121;
                ``(2) will address significant health disparities,
            including those identified by the Secretary in the national
            strategy under section 3121;
                ``(3) will address unmet community prevention needs and
            avoids duplication of effort;
                ``(4) have been demonstrated to be effective in communities
            comparable to the proposed target community;
                ``(5) will contribute to the evidence base for community
            preventive and wellness services;
                ``(6) demonstrate that the community preventive services to
            be funded will be sustainable; and
                ``(7) demonstrate coordination or collaboration across
            governmental and nongovernmental partners.
        ``(d) Health Disparities.--Of the funds awarded under this section
    for a fiscal year, the Secretary shall award not less than 50 percent
    for planning or implementing community preventive and wellness services
    whose primary purpose is to achieve a measurable reduction in one or
    more health disparities, including those identified by the Secretary in
    the national strategy under section 3121.
        ``(e) Emphasis on Recommended Services.--For fiscal year 2013 and
    subsequent fiscal years, the Secretary shall award grants under this
    section only for planning or implementing services recommended by the
    Task Force on Community Preventive Services under section 3122 or
    deemed effective based on a review of comparable rigor (as determined
    by the Director of the Centers for Disease Control and Prevention).
        ``(f) Prohibited Uses of Funds.--An entity that receives a grant
    under this section may not use funds provided through the grant--
                ``(1) to build or acquire real property or for
            construction; or
                ``(2) for services or planning to the extent that payment
            has been made, or can reasonably be expected to be made--
                        ``(A) under any insurance policy;
                        ``(B) under any Federal or State health benefits
                    program (including titles XIX and XXI of the Social
                    Security Act); or
                        ``(C) by an entity which provides health services
                    on a prepaid basis.
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program of grants awarded under this section.
        ``(h) Definitions.--In this section, the term `evidence-based'
    means that methodologically sound research has demonstrated a
    beneficial health effect, in the judgment of the Director of the
    Centers for Disease Control and Prevention.

                ``Subtitle F--Core Public Health Infrastructure

    ``SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR STATE, LOCAL, AND
                  TRIBAL HEALTH DEPARTMENTS.

        ``(a) Program.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention shall establish a core
    public health infrastructure program consisting of awarding grants
    under subsection (b).
        ``(b) Grants.--
                ``(1) Award.--For the purpose of addressing core public
            health infrastructure needs, the Secretary--
                        ``(A) shall award a grant to each State health
                    department; and
                        ``(B) may award grants on a competitive basis to
                    State, local, or tribal health departments.
                ``(2) Allocation.--Of the total amount of funds awarded as
            grants under this subsection for a fiscal year--
                        ``(A) not less than 50 percent shall be for grants
                    to State health departments under paragraph (1)(A); and
                        ``(B) not less than 30 percent shall be for grants
                    to State, local, or tribal health departments under
                    paragraph (1)(B).
        ``(c) Use of Funds.--The Secretary may award a grant to an entity
    under subsection (b)(1) only if the entity agrees to use the grant to
    address core public health infrastructure needs, including those
    identified in the accreditation process under subsection (g).
        ``(d) Formula Grants to State Health Departments.--In making grants
    under subsection (b)(1)(A), the Secretary shall award funds to each
    State health department in accordance with--
                ``(1) a formula based on population size; burden of
            preventable disease and disability; and core public health
            infrastructure gaps, including those identified in the
            accreditation process under subsection (g); and
                ``(2) application requirements established by the
            Secretary, including a requirement that the State submit a plan
            that demonstrates to the satisfaction of the Secretary that the
            State's health department will--
                        ``(A) address its highest priority core public
                    health infrastructure needs; and
                        ``(B) as appropriate, allocate funds to local
                    health departments within the State.
        ``(e) Competitive Grants to State, Local, and Tribal Health
    Departments.--In making grants under subsection (b)(1)(B), the
    Secretary shall give priority to applicants demonstrating core public
    health infrastructure needs identified in the accreditation process
    under subsection (g).
        ``(f) Maintenance of Effort.--The Secretary may award a grant to an
    entity under subsection (b) only if the entity demonstrates to the
    satisfaction of the Secretary that--
                ``(1) funds received through the grant will be expended
            only to supplement, and not supplant, non-Federal and Federal
            funds otherwise available to the entity for the purpose of
            addressing core public health infrastructure needs; and
                ``(2) with respect to activities for which the grant is
            awarded, the entity will maintain expenditures of non-Federal
            amounts for such activities at a level not less than the level
            of such expenditures maintained by the entity for the fiscal
            year preceding the fiscal year for which the entity receives
            the grant.
        ``(g) Establishment of a Public Health Accreditation Program.--
                ``(1) In general.--The Secretary, acting through the
            Director of the Centers for Disease Control and Prevention,
            shall--
                        ``(A) develop, and periodically review and update,
                    standards for voluntary accreditation of State, local,
                    or tribal health departments and public health
                    laboratories for the purpose of advancing the quality
                    and performance of such departments and laboratories;
                    and
                        ``(B) implement a program to accredit such health
                    departments and laboratories in accordance with such
                    standards.
                ``(2) Cooperative agreement.--The Secretary may enter into
            a cooperative agreement with a private nonprofit entity to
            carry out paragraph (1).
        ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on progress being made to accredit entities under subsection
    (g), including--
                ``(1) a strategy, including goals and objectives, for
            accrediting entities under subsection (g) and achieving the
            purpose described in subsection (g)(1); and
                ``(2) identification of gaps in research related to core
            public health infrastructure and recommendations of priority
            areas for such research.

    ``SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND ACTIVITIES FOR CDC.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall expand and
    improve the core public health infrastructure and activities of the
    Centers for Disease Control and Prevention to address unmet and
    emerging public health needs.
        ``(b) Report.--The Secretary shall submit to the Congress an annual
    report on the activities funded through this section.

                        ``Subtitle G--General Provisions

    ``SEC. 3171. DEFINITIONS.

        ``In this title:
                ``(1) The term `core public health infrastructure' includes
            workforce capacity and competency; laboratory systems; health
            information, health information systems, and health information
            analysis; communications; financing; other relevant components
            of organizational capacity; and other related activities.
                ``(2) The terms `Department' and `departmental' refer to
            the Department of Health and Human Services.
                ``(3) The term `health disparities' includes health and
            health care disparities and means population-specific
            differences in the presence of disease, health outcomes, or
            access to health care. For purposes of the preceding sentence,
            a population may be delineated by race, ethnicity, geographic
            setting, or other population or subpopulation determined
            appropriate by the Secretary.
                ``(4) The term `tribal' refers to an Indian tribe, a Tribal
            organization, or an Urban Indian organization, as such terms
            are defined in section 4 of the Indian Health Care Improvement
            Act.''.
        (b) Transition Provisions Applicable to Task Forces.--
                (1) Functions, personnel, assets, liabilities, and
            administrative actions.--All functions, personnel, assets, and
            liabilities of, and administrative actions applicable to, the
            Preventive Services Task Force convened under section 915(a) of
            the Public Health Service Act and the Task Force on Community
            Preventive Services (as such section and Task Forces were in
            existence on the day before the date of the enactment of this
            Act) shall be transferred to the Task Force on Clinical
            Preventive Services and the Task Force on Community Preventive
            Services, respectively, established under sections 3121 and
            3122 of the Public Health Service Act, as added by subsection
            (a).
                (2) Recommendations.--All recommendations of the Preventive
            Services Task Force and the Task Force on Community Preventive
            Services, as in existence on the day before the date of the
            enactment of this Act, shall be considered to be
            recommendations of the Task Force on Clinical Preventive
            Services and the Task Force on Community Preventive Services,
            respectively, established under sections 3121 and 3122 of the
            Public Health Service Act, as added by subsection (a).
                (3) Members already serving.--
                        (A) Initial members.--The Secretary of Health and
                    Human Services may select those individuals already
                    serving on the Preventive Services Task Force and the
                    Task Force on Community Preventive Services, as in
                    existence on the day before the date of the enactment
                    of this Act, to be among the first members appointed to
                    the Task Force on Clinical Preventive Services and the
                    Task Force on Community Preventive Services,
                    respectively, under sections 3121 and 3122 of the
                    Public Health Service Act, as added by subsection (a).
                        (B) Calculation of total service.--In calculating
                    the total years of service of a member of a task force
                    for purposes of section 3131(d)(2)(A) or 3132(d)(2)(A)
                    of the Public Health Service Act, as added by
                    subsection (a), the Secretary of Health and Human
                    Services shall not include any period of service by the
                    member on the Preventive Services Task Force or the
                    Task Force on Community Preventive Services,
                    respectively, as in existence on the day before the
                    date of the enactment of this Act.
        (c) Period Before Completion of National Strategy.--Pending
    completion of the national strategy under section 3121 of the Public
    Health Service Act, as added by subsection (a), the Secretary of Health
    and Human Services, acting through the relevant agency head, may make a
    judgment about how the strategy will address an issue and rely on such
    judgment in carrying out any provision of subtitle C, D, E, or F of
    title XXXI of such Act, as added by subsection (a), that requires the
    Secretary--
                (1) to take into consideration such strategy;
                (2) to conduct or support research or provide services in
            priority areas identified in such strategy; or
                (3) to take any other action in reliance on such strategy.
        (d) Conforming Amendments.--
                (1) Paragraph (61) of section 3(b) of the Indian Health
            Care Improvement Act (25 U.S.C. 1602) is amended by striking
            ``United States Preventive Services Task Force'' and inserting
            ``Task Force on Clinical Preventive Services''.
                (2) Section 126 of the Medicare, Medicaid, and SCHIP
            Benefits Improvement and Protection Act of 2000 (Appendix F of
            Public Law 106-554) is amended by striking ``United States
            Preventive Services Task Force'' each place it appears and
            inserting ``Task Force on Clinical Preventive Services''.
                (3) Paragraph (7) of section 317D of the Public Health
            Service Act (42 U.S.C. 247b-5) is amended by striking ``United
            States Preventive Services Task Force'' each place it appears
            and inserting ``Task Force on Clinical Preventive Services''.
                (4) Section 915 of the Public Health Service Act (42 U.S.C.
            299b-4) is amended by striking subsection (a).
                (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and
            (ddd)(1)(B) of section 1861 of the Social Security Act (42
            U.S.C. 1395x) are amended by striking ``United States
            Preventive Services Task Force'' each place it appears and
            inserting ``Task Force on Clinical Preventive Services''.

                       TITLE IV--QUALITY AND SURVEILLANCE

    SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH
                  CARE.

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

     ``PART D--IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH
                                      CARE

    ``SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

        ``(a) In General.--There is established the Center for Quality
    Improvement (referred to in this part as the `Center'), to be headed by
    the Director.
        ``(b) Prioritization.--
                ``(1) In general.--The Director shall prioritize areas for
            the identification, development, evaluation, and implementation
            of best practices (including innovative methodologies and
            strategies) for quality improvement activities in the delivery
            of health care services (in this section referred to as `best
            practices').
                ``(2) Considerations.--In prioritizing areas under
            paragraph (1), the Director shall consider--
                        ``(A) the priorities established under section 1191
                    of the Social Security Act; and
                        ``(B) the key health indicators identified by the
                    Assistant Secretary for Health Information under
                    section 1709.
        ``(c) Other Responsibilities.--The Director, acting directly or by
    awarding a grant or contract to an eligible entity, shall--
                ``(1) identify existing best practices under subsection
            (e);
                ``(2) develop new best practices under subsection (f);
                ``(3) evaluate best practices under subsection (g);
                ``(4) implement best practices under subsection (h);
                ``(5) ensure that best practices are identified, developed,
            evaluated, and implemented under this section consistent with
            standards adopted by the Secretary under section 3004 for
            health information technology used in the collection and
            reporting of quality information (including for purposes of the
            demonstration of meaningful use of certified electronic health
            record (EHR) technology by physicians and hospitals under the
            Medicare program (under sections 1848(o)(2) and 1886(n)(3),
            respectively, of the Social Security Act)); and
                ``(6) provide for dissemination of information and
            reporting under subsections (i) and (j).
        ``(d) Eligibility.--To be eligible for a grant or contract under
    subsection (c), an entity shall--
                ``(1) be a nonprofit entity;
                ``(2) agree to work with a variety of institutional health
            care providers, physicians, nurses, and other health care
            practitioners; and
                ``(3) if the entity is not the organization holding a
            contract under section 1153 of the Social Security Act for the
            area to be served, agree to cooperate with and avoid
            duplication of the activities of such organization.
        ``(e) Identifying Existing Best Practices.--The Secretary shall
    identify best practices that are--
                ``(1) currently utilized by health care providers
            (including hospitals, physician and other clinician practices,
            community cooperatives, and other health care entities) that
            deliver consistently high-quality, efficient health care
            services; and
                ``(2) easily adapted for use by other health care providers
            and for use across a variety of health care settings.
        ``(f) Developing New Best Practices.--The Secretary shall develop
    best practices that are--
                ``(1) based on a review of existing scientific evidence;
                ``(2) sufficiently detailed for implementation and
            incorporation into the workflow of health care providers; and
                ``(3) designed to be easily adapted for use by health care
            providers across a variety of health care settings.
        ``(g) Evaluation of Best Practices.--The Director shall evaluate
    best practices identified or developed under this section. Such
    evaluation--
                ``(1) shall include determinations of which best
            practices--
                        ``(A) most reliably and effectively achieve
                    significant progress in improving the quality of
                    patient care; and
                        ``(B) are easily adapted for use by health care
                    providers across a variety of health care settings;
                ``(2) shall include regular review, updating, and
            improvement of such best practices; and
                ``(3) may include in-depth case studies or empirical
            assessments of health care providers (including hospitals,
            physician and other clinician practices, community
            cooperatives, and other health care entities) and simulations
            of such best practices for determinations under paragraph (1).
        ``(h) Implementation of Best Practices.--
                ``(1) In general.--The Director shall enter into voluntary
            arrangements with health care providers (including hospitals
            and other health facilities and health practitioners) in a
            State or region to implement best practices identified or
            developed under this section. Such implementation--
                        ``(A) may include forming collaborative multi-
                    institutional teams; and
                        ``(B) shall include an evaluation of the best
                    practices being implemented, including the measurement
                    of patient outcomes before, during, and after
                    implementation of such best practices.
                ``(2) Preferences.--In carrying out this subsection, the
            Director shall give priority to health care providers
            implementing best practices that--
                        ``(A) have the greatest impact on patient outcomes
                    and satisfaction;
                        ``(B) are the most easily adapted for use by health
                    care providers across a variety of health care
                    settings;
                        ``(C) promote coordination of health care
                    practitioners across the continuum of care; and
                        ``(D) engage patients and their families in
                    improving patient care and outcomes.
        ``(i) Public Dissemination of Information.--The Director shall
    provide for the public dissemination of information with respect to
    best practices and activities under this section. Such information
    shall be made available in appropriate formats and languages to reflect
    the varying needs of consumers and diverse levels of health literacy.
        ``(j) Report.--
                ``(1) In general.--The Director shall submit an annual
            report to the Congress and the Secretary on activities under
            this section.
                ``(2) Content.--Each report under paragraph (1) shall
            include--
                        ``(A) information on activities conducted pursuant
                    to grants and contracts awarded;
                        ``(B) summary data on patient outcomes before,
                    during, and after implementation of best practices; and
                        ``(C) recommendations on the adaptability of best
                    practices for use by health providers.''.
        (b) Initial Quality Improvement Activities and Initiatives To Be
    Implemented.--Until the Director of the Agency for Healthcare Research
    and Quality has established initial priorities under section 931(b) of
    the Public Health Service Act, as added by subsection (a), the Director
    shall, for purposes of such section, prioritize the following:
                (1) Health care-associated infections.--Reducing health
            care-associated infections, including infections in nursing
            homes and outpatient settings.
                (2) Surgery.--Increasing hospital and outpatient
            perioperative patient safety, including reducing surgical-site
            infections and surgical errors (such as wrong-site surgery and
            retained foreign bodies).
                (3) Emergency room.--Improving care in hospital emergency
            rooms, including through the use of principles of efficiency of
            design and delivery to improve patient flow.
                (4) Obstetrics.--Improving the provision of obstetrical and
            neonatal care, including the identification of interventions
            that are effective in reducing the risk of preterm and
            premature labor and the implementation of best practices for
            labor and delivery care.

    SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

        (a) Establishment.--Title XVII (42 U.S.C. 300u et seq.) is
    amended--
                (1) by redesignating sections 1709 and 1710 as sections
            1710 and 1711, respectively; and
                (2) by inserting after section 1708 the following:

    ``SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

        ``(a) In General.--There is established within the Department an
    Assistant Secretary for Health Information (in this section referred to
    as the `Assistant Secretary'), to be appointed by the Secretary.
        ``(b) Responsibilities.--The Assistant Secretary shall--
                ``(1) ensure the collection, collation, reporting, and
            publishing of information (including full and complete
            statistics) on key health indicators regarding the Nation's
            health and the performance of the Nation's health care;
                ``(2) facilitate and coordinate the collection, collation,
            reporting, and publishing of information regarding the Nation's
            health and the performance of the Nation's health care (other
            than information described in paragraph (1));
                ``(3)(A) develop standards for the collection of data
            regarding the Nation's health and the performance of the
            Nation's health care; and
                ``(B) in carrying out subparagraph (A)--
                        ``(i) ensure appropriate specificity and
                    standardization for data collection at the national,
                    regional, State, and local levels;
                        ``(ii) include standards, as appropriate, for the
                    collection of accurate data on health and health care
                    by race, ethnicity, primary language, sex, sexual
                    orientation, gender identity, disability, socioeconomic
                    status, rural, urban, or other geographic setting, and
                    any other population or subpopulation determined
                    appropriate by the Secretary;
                        ``(iii) ensure, with respect to data on race and
                    ethnicity, consistency with the 1997 Office of
                    Management and Budget Standards for Maintaining,
                    Collecting and Presenting Federal Data on Race and
                    Ethnicity (or any successor standards); and
                        ``(iv) in consultation with the Director of the
                    Office of Minority Health, and the Director of the
                    Office of Civil Rights, of the Department, develop
                    standards for the collection of data on health and
                    health care with respect to data on primary language;
                ``(4) provide support to Federal departments and agencies
            whose programs have a significant impact upon health (as
            determined by the Secretary) for the collection and collation
            of information described in paragraphs (1) and (2);
                ``(5) ensure the sharing of information described in
            paragraphs (1) and (2) among the agencies of the Department;
                ``(6) facilitate the sharing of information described in
            paragraphs (1) and (2) by Federal departments and agencies
            whose programs have a significant impact upon health (as
            determined by the Secretary);
                ``(7) identify gaps in information described in paragraphs
            (1) and (2) and the appropriate agency or entity to address
            such gaps;
                ``(8) facilitate and coordinate identification and
            monitoring by the agencies of the Department of health
            disparities to inform program and policy efforts to reduce such
            disparities, including facilitating and funding analyses
            conducted in cooperation with the Social Security
            Administration, the Bureau of the Census, and other appropriate
            agencies and entities;
                ``(9) consistent with privacy, proprietary, and other
            appropriate safeguards, facilitate public accessibility of
            datasets (such as de-identified Medicare datasets or publicly
            available data on key health indicators) by means of the
            Internet; and
                ``(10) award grants or contracts for the collection and
            collation of information described in paragraphs (1) and (2)
            (including through statewide surveys that provide standardized
            information).
        ``(c) Key Health Indicators.--
                ``(1) In general.--In carrying out subsection (b)(1), the
            Assistant Secretary shall--
                        ``(A) identify, and reassess at least once every 3
                    years, key health indicators described in such
                    subsection;
                        ``(B) publish statistics on such key health
                    indicators for the public--
                                ``(i) not less than annually; and
                                ``(ii) on a supplemental basis whenever
                            warranted by--
                                        ``(I) the rate of change for a key
                                    health indicator; or
                                        ``(II) the need to inform policy
                                    regarding the Nation's health and the
                                    performance of the Nation's health
                                    care; and
                        ``(C) ensure consistency with the national strategy
                    developed by the Secretary under section 3121 and
                    consideration of the indicators specified in the
                    reports under sections 308, 903(a)(6), and 913(b)(2).
                ``(2) Release of key health indicators.--The regulations,
            rules, processes, and procedures of the Office of Management
            and Budget governing the review, release, and dissemination of
            key health indicators shall be the same as the regulations,
            rules, processes, and procedures of the Office of Management
            and Budget governing the review, release, and dissemination of
            Principal Federal Economic Indicators (or equivalent
            statistical data) by the Bureau of Labor Statistics.
        ``(d) Coordination.--In carrying out this section, the Assistant
    Secretary shall coordinate with--
                ``(1) public and private entities that collect and
            disseminate information on health and health care, including
            foundations; and
                ``(2) the head of the Office of the National Coordinator
            for Health Information Technology to ensure optimal use of
            health information technology.
        ``(e) Request for Information From Other Departments and
    Agencies.--Consistent with applicable law, the Assistant Secretary may
    secure directly from any Federal department or agency information
    necessary to enable the Assistant Secretary to carry out this section.
        ``(f) Report.--
                ``(1) Submission.--The Assistant Secretary shall submit to
            the Secretary and the Congress an annual report containing--
                        ``(A) a description of national, regional, or State
                    changes in health or health care, as reflected by the
                    key health indicators identified under subsection
                    (c)(1);
                        ``(B) a description of gaps in the collection,
                    collation, reporting, and publishing of information
                    regarding the Nation's health and the performance of
                    the Nation's health care;
                        ``(C) recommendations for addressing such gaps and
                    identification of the appropriate agency within the
                    Department or other entity to address such gaps;
                        ``(D) a description of analyses of health
                    disparities, including the results of completed
                    analyses, the status of ongoing longitudinal studies,
                    and proposed or planned research; and
                        ``(E) a plan for actions to be taken by the
                    Assistant Secretary to address gaps described in
                    subparagraph (B).
                ``(2) Consideration.--In preparing a report under paragraph
            (1), the Assistant Secretary shall take into consideration the
            findings and conclusions in the reports under sections 308,
            903(a)(6), and 913(b)(2).
        ``(g) Proprietary and Privacy Protections.--Nothing in this section
    shall be construed to affect applicable proprietary or privacy
    protections.
        ``(h) Consultation.--In carrying out this section, the Assistant
    Secretary shall consult with--
                ``(1) the heads of appropriate health agencies and offices
            in the Department, including the Office of the Surgeon General
            of the Public Health Service, the Office of Minority Health,
            and the Office on Women's Health; and
                ``(2) as appropriate, the heads of other Federal
            departments and agencies whose programs have a significant
            impact upon health (as determined by the Secretary).
        ``(i) Definition.--In this section:
                ``(1) The terms `agency' and `agencies' include an
            epidemiology center established under section 214 of the Indian
            Health Care Improvement Act.
                ``(2) The term `Department' means the Department of Health
            and Human Services.
                ``(3) The term `health disparities' has the meaning given
            to such term in section 3171.''.
        (b) Other Coordination Responsibilities.--Title III (42 U.S.C. 241
    et seq.) is amended--
                (1) in paragraphs (1) and (2) of section 304(c) (42 U.S.C.
            242b(c)), by inserting ``, acting through the Assistant
            Secretary for Health Information,'' after ``The Secretary''
            each place it appears; and
                (2) in section 306(j) (42 U.S.C. 242k(j)), by inserting ``,
            acting through the Assistant Secretary for Health
            Information,'' after ``of this section, the Secretary''.

    SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

        Section 799C, as added and amended, is further amended by adding at
    the end the following:
        ``(e) Quality and Surveillance.--For the purpose of carrying out
    part D of title IX and section 1709, in addition to any other amounts
    authorized to be appropriated for such purpose, there is authorized to
    be appropriated, out of any monies in the Public Health Investment
    Fund, $300,000,000 for each of fiscal years 2010 through 2014 and
    $330,000,000 for each of fiscal years 2015 through 2019.''.

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

        (a) Expansion of Covered Entities Receiving Discounted Prices.--
    Section 340B(a)(4) (42 U.S.C. 256b(a)(4)) is amended by adding at the
    end the following:
                        ``(M) A children's hospital excluded from the
                    Medicare prospective payment system pursuant to section
                    1886(d)(1)(B)(iii) of the Social Security Act which
                    would meet the requirements of subparagraph (L),
                    including the disproportionate share adjustment
                    percentage requirement under subparagraph (L)(ii), if
                    the hospital were a subsection (d) hospital as defined
                    in section 1886(d)(1)(B) of the Social Security Act.
                        ``(N) An entity that is a critical access hospital
                    (as determined under section 1820(c)(2) of the Social
                    Security Act).
                        ``(O) An entity receiving funds under title V of
                    the Social Security Act (relating to maternal and child
                    health) for the provision of health services.
                        ``(P) An entity receiving funds under subpart I of
                    part B of title XIX of the Public Health Service Act
                    (relating to comprehensive mental health services) for
                    the provision of community mental health services.
                        ``(Q) An entity receiving funds under subpart II of
                    such part B (relating to the prevention and treatment
                    of substance abuse) for the provision of treatment
                    services for substance abuse.
                        ``(R) An entity that is a Medicare-dependent, small
                    rural hospital (as defined in section 1886(d)(5)(G)(iv)
                    of the Social Security Act).
                        ``(S) An entity that is a sole community hospital
                    (as defined in section 1886(d)(5)(D)(iii) of the Social
                    Security Act).
                        ``(T) An entity that is classified as a rural
                    referral center under section 1886(d)(5)(C) of the
                    Social Security Act.''.
        (b) Prohibition on Group Purchasing Arrangements.--Section 340B(a)
    (42 U.S.C. 256b(a)) is amended--
                (1) in paragraph (4)(L)--
                        (A) by adding ``and'' at the end of clause (i);
                        (B) by striking ``; and'' at the end of clause (ii)
                    and inserting a period; and
                        (C) by striking clause (iii);
                (2) in paragraph (5), by redesignating subparagraphs (C)
            and (D) as subparagraphs (D) and (E), respectively, and by
            inserting after subparagraph (B) the following:
                        ``(C) Prohibiting use of group purchasing
                    arrangements.--
                                ``(i) A hospital described in subparagraph
                            (L), (M), (N), (R), (S), or (T) of paragraph
                            (4) shall not obtain covered outpatient drugs
                            through a group purchasing organization or
                            other group purchasing arrangement, except as
                            permitted or provided pursuant to clause (ii).
                                ``(ii) The Secretary shall establish
                            reasonable exceptions to the requirement of
                            clause (i)--
                                        ``(I) with respect to a covered
                                    outpatient drug that is unavailable to
                                    be purchased through the program under
                                    this section due to a drug shortage
                                    problem, manufacturer noncompliance, or
                                    any other reason beyond the hospital's
                                    control;
                                        ``(II) to facilitate generic
                                    substitution when a generic covered
                                    outpatient drug is available at a lower
                                    price; and
                                        ``(III) to reduce in other ways the
                                    administrative burdens of managing both
                                    inventories of drugs obtained under
                                    this section and not under this
                                    section, if such exception does not
                                    create a duplicate discount problem in
                                    violation of subparagraph (A) or a
                                    diversion problem in violation of
                                    subparagraph (B).''.

    SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

        (a) In General.--Section 340B (42 U.S.C. 256b) is amended--
                (1) in subsection (b)--
                        (A) by striking ``In this section, the terms'' and
                    inserting the following: ``In this section:
                ``(1) In general.--The terms''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(2) Covered drug.--The term `covered drug'--
                        ``(A) means a covered outpatient drug (as defined
                    in section 1927(k)(2) of the Social Security Act); and
                        ``(B) includes, notwithstanding the section
                    1927(k)(3)(A) of such Act, a drug used in connection
                    with an inpatient or outpatient service provided by a
                    hospital described in subparagraph (L), (M), (N), (R),
                    (S), or (T) of subsection (a)(4) that is enrolled to
                    participate in the drug discount program under this
                    section.''; and
                (2) in paragraphs (5), (7), and (9) of subsection (a), by
            striking ``outpatient'' each place it appears.
        (b) Medicaid Credits on Inpatient Drugs.--Subsection (c) of section
    340B (42 U.S.C. 256b(c)) is amended to read as follows:
        ``(c) Medicaid Credits on Inpatient Drugs.--
                ``(1) In general.--For the cost reporting period covered by
            the most recently filed Medicare cost report under title XVIII
            of the Social Security Act, a hospital described in
            subparagraph (L), (M), (N), (R), (S), or (T) of subsection
            (a)(4) and enrolled to participate in the drug discount program
            under this section shall provide to each State under its plan
            under title XIX of such Act--
                        ``(A) a credit on the estimated annual costs to
                    such hospital of single source and innovator multiple
                    source drugs provided to Medicaid beneficiaries for
                    inpatient use; and
                        ``(B) a credit on the estimated annual costs to
                    such hospital of noninnovator multiple source drugs
                    provided to Medicaid beneficiaries for inpatient use.
                ``(2) Amount of credits.--
                        ``(A) Single source and innovator multiple source
                    drugs.--For purposes of paragraph (1)(A)--
                                ``(i) the credit under such paragraph shall
                            be equal to the product of--
                                        ``(I) the annual value of single
                                    source and innovator multiple source
                                    drugs purchased under this section by
                                    the hospital based on the drugs'
                                    average manufacturer price;
                                        ``(II) the estimated percentage of
                                    the hospital's drug purchases
                                    attributable to Medicaid beneficiaries
                                    for inpatient use; and
                                        ``(III) the minimum rebate
                                    percentage described in section
                                    1927(c)(1)(B) of the Social Security
                                    Act;
                                ``(ii) the reference in clause (i)(I) to
                            the annual value of single source and innovator
                            multiple source drugs purchased under this
                            section by the hospital based on the drugs'
                            average manufacturer price shall be equal to
                            the sum of--
                                        ``(I) the annual quantity of each
                                    single source and innovator multiple
                                    source drug purchased during the cost
                                    reporting period, multiplied by
                                        ``(II) the average manufacturer
                                    price for that drug;
                                ``(iii) the reference in clause (i)(II) to
                            the estimated percentage of the hospital's drug
                            purchases attributable to Medicaid
                            beneficiaries for inpatient use; shall be equal
                            to--
                                        ``(I) the Medicaid inpatient drug
                                    charges as reported on the hospital's
                                    most recently filed Medicare cost
                                    report, divided by
                                        ``(II) total drug charges reported
                                    on the cost report; and
                                ``(iv) the terms `single source drug' and
                            `innovator multiple source drug' have the
                            meanings given such terms in section 1927(k)(7)
                            of the Social Security Act.
                        ``(B) Noninnovator multiple source drugs.--For
                    purposes of paragraph (1)(B)--
                                ``(i) the credit under such paragraph shall
                            be equal to the product of--
                                        ``(I) the annual value of
                                    noninnovator multiple source drugs
                                    purchased under this section by the
                                    hospital based on the drugs' average
                                    manufacturer price;
                                        ``(II) the estimated percentage of
                                    the hospital's drug purchases
                                    attributable to Medicaid beneficiaries
                                    for inpatient use; and
                                        ``(III) the applicable percentage
                                    as defined in section 1927(c)(3)(B) of
                                    the Social Security Act;
                                ``(ii) the reference in clause (i)(I) to
                            the annual value of noninnovator multiple
                            source drugs purchased under this section by
                            the hospital based on the drugs' average
                            manufacturer price shall be equal to the sum
                            of--
                                        ``(I) the annual quantity of each
                                    noninnovator multiple source drug
                                    purchased during the cost reporting
                                    period, multiplied by
                                        ``(II) the average manufacturer
                                    price for that drug;
                                ``(iii) the reference in clause (i)(II) to
                            the estimated percentage of the hospital's drug
                            purchases attributable to Medicaid
                            beneficiaries for inpatient use shall be equal
                            to--
                                        ``(I) the Medicaid inpatient drug
                                    charges as reported on the hospital's
                                    most recently filed Medicare cost
                                    report, divided by
                                        ``(II) total drug charges reported
                                    on the cost report; and
                                ``(iv) the term `noninnovator multiple
                            source drug' has the meaning given such term in
                            section 1927(k)(7) of the Social Security Act.
                ``(3) Calculation of credits.--
                        ``(A) In general.--Each State calculates credits
                    under paragraph (1) and informs hospitals of amount
                    under section 1927(a)(5)(D) of the Social Security Act.
                        ``(B) Hospital provision of information.--Not later
                    than 30 days after the date of the filing of the
                    hospital's most recently filed Medicare cost report,
                    the hospital shall provide the State with the
                    information described in paragraphs (2)(A)(ii) and
                    (2)(B)(ii). With respect to each drug purchased during
                    the cost reporting period, the hospital shall provide
                    the dosage form, strength, package size, date of
                    purchase and the number of units purchased.
                ``(4) Payment deadline.--The credits provided by a hospital
            under paragraph (1) shall be paid within 60 days after
            receiving the information specified in paragraph (3)(A).
                ``(5) Opt out.--A hospital shall not be required to provide
            the Medicaid credit required under paragraph (1) if it can
            demonstrate to the State that it will lose reimbursement under
            the State plan resulting from the extension of discounts to
            inpatient drugs under subsection (b)(2) and that the loss of
            reimbursement will exceed the amount of the credit otherwise
            owed by the hospital.
                ``(6) Offset against medical assistance.--Amounts received
            by a State under this subsection in any quarter shall be
            considered to be a reduction in the amount expended under the
            State plan in the quarter for medical assistance for purposes
            of section 1903(a)(1) of the Social Security Act.''.
        (c) Conforming Amendments.--Section 1927 of the Social Security Act
    (42 U.S.C. 1396r-8) is amended--
                (1) in subsection (a)(5)(A), by striking ``covered
            outpatient drugs'' and inserting ``covered drugs (as defined in
            section 340B(b)(2) of the Public Health Service Act)'';
                (2) in subsection (a)(5), by striking subparagraph (D) and
            inserting the following:
                        ``(D) State responsibility for calculating hospital
                    credits.--The State shall calculate the credits owed by
                    the hospital under paragraph (1) of section 340B(c) of
                    the Public Health Service Act and provide the hospital
                    with both the amounts and an explanation of how it
                    calculated the credits. In performing the calculations
                    specified in paragraphs (2)(A)(ii) and (2)(B)(ii) of
                    such section, the State shall use the average
                    manufacturer price applicable to the calendar quarter
                    in which the drug was purchased by the hospital.''; and
                (3) in subsection (k)(1)--
                        (A) in subparagraph (A), by striking ``subparagraph
                    (B)'' and inserting ``subparagraphs (B) and (D)''; and
                        (B) by adding at the end the following:
                        ``(D) Calculation for covered drugs.--With respect
                    to a covered drug (as defined in section 340B(b)(2) of
                    the Public Health Service Act), the average
                    manufacturer price shall be determined in accordance
                    with subparagraph (A) except that, in the event a
                    covered drug is not distributed to the retail pharmacy
                    class of trade, it shall mean the average price paid to
                    the manufacturer for the drug in the United States by
                    wholesalers for drugs distributed to the acute care
                    class of trade, after deducting customary prompt pay
                    discounts.''.

    SEC. 2503. EFFECTIVE DATE.

        (a) In General.--The amendments made by this subtitle shall take
    effect on July 1, 2010, and shall apply to drugs dispensed on or after
    such date.
        (b) Effectiveness.--The amendments made by this subtitle shall be
    effective, and shall be taken into account in determining whether a
    manufacturer is deemed to meet the requirements of section 340B(a) of
    the Public Health Service Act (42 U.S.C. 256b(a)) and of section
    1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)),
    notwithstanding any other provision of law.

                    Subtitle B--School-Based Health Clinics

    SEC. 2511. SCHOOL-BASED HEALTH CLINICS.

        (a) In General.--Part Q of title III (42 U.S.C. 280h et seq.) is
    amended by adding at the end the following:

    ``SEC. 399Z-1. SCHOOL-BASED HEALTH CLINICS.

        ``(a) Program.--The Secretary shall establish a school-based health
    clinic program consisting of awarding grants to eligible entities to
    support the operation of school-based health clinics (referred to in
    this section as `SBHCs').
        ``(b) Eligibility.--To be eligible for a grant under this section,
    an entity shall--
                ``(1) be an SBHC (as defined in subsection (l)(4)); and
                ``(2) submit an application at such time, in such manner,
            and containing such information as the Secretary may require,
            including at a minimum--
                        ``(A) evidence that the applicant meets all
                    criteria necessary to be designated as an SBHC;
                        ``(B) evidence of local need for the services to be
                    provided by the SBHC;
                        ``(C) an assurance that--
                                ``(i) SBHC services will be provided in
                            accordance with Federal, State, and local laws
                            governing--
                                        ``(I) obtaining parental or
                                    guardian consent; and
                                        ``(II) patient privacy and student
                                    records, including section 264 of the
                                    Health Insurance Portability and
                                    Accountability Act of 1996 and section
                                    444 of the General Education Provisions
                                    Act;
                                ``(ii) the SBHC has established and
                            maintains collaborative relationships with
                            other health care providers in the catchment
                            area of the SBHC;
                                ``(iii) the SBHC will provide on-site
                            access during the academic day when school is
                            in session and has an established network of
                            support and access to services with backup
                            health providers when the school or SBHC is
                            closed;
                                ``(iv) the SBHC will be integrated into the
                            school environment and will coordinate health
                            services with appropriate school personnel and
                            other community providers co-located at the
                            school; and
                                ``(v) the SBHC sponsoring facility assumes
                            all responsibility for the SBHC administration,
                            operations, and oversight; and
                        ``(D) such other information as the Secretary may
                    require.
        ``(c) Use of Funds.--Funds awarded under a grant under this section
    may be used for--
                ``(1) providing training related to the provision of
            comprehensive primary health services and additional health
            services;
                ``(2) the management and operation of SBHC programs; and
                ``(3) the payment of salaries for health professionals and
            other appropriate SBHC personnel.
        ``(d) Consideration of Need.--In determining the amount of a grant
    under this section, the Secretary shall take into consideration--
                ``(1) the financial need of the SBHC;
                ``(2) State, local, or other sources of funding provided to
            the SBHC; and
                ``(3) other factors as determined appropriate by the
            Secretary.
        ``(e) Preferences.--In awarding grants under this section, the
    Secretary shall give preference to SBHCs that have a demonstrated
    record of service to the following:
                ``(1) A high percentage of medically underserved children
            and adolescents.
                ``(2) Communities or populations in which children and
            adolescents have difficulty accessing health and mental health
            services.
                ``(3) Communities with high percentages of children and
            adolescents who are uninsured, underinsured, or eligible for
            medical assistance under Federal or State health benefits
            programs (including titles XIX and XXI of the Social Security
            Act).
        ``(f) Matching Requirement.--The Secretary may award a grant to an
    SBHC only if the SBHC agrees to provide, from non-Federal sources, an
    amount equal to 20 percent of the amount of the grant (which may be
    provided in cash or in kind) to carry out the activities supported by
    the grant.
        ``(g) Supplement, Not Supplant.--The Secretary may award a grant to
    an SBHC under this section only if the SBHC demonstrates to the
    satisfaction of the Secretary that funds received through the grant
    will be expended only to supplement, and not supplant, non-Federal and
    Federal funds otherwise available to the SBHC for operation of the SBHC
    (including each activity described in paragraph (1) or (2) of
    subsection (c)).
        ``(h) Payor of Last Resort.--The Secretary may award a grant to an
    SBHC under this section only if the SBHC demonstrates to the
    satisfaction of the Secretary that funds received through the grant
    will not be expended for any activity to the extent that payment has
    been made, or can reasonably be expected to be made--
                ``(1) under any insurance policy;
                ``(2) under any Federal or State health benefits program
            (including titles XIX and XXI of the Social Security Act); or
                ``(3) by an entity which provides health services on a
            prepaid basis.
        ``(i) Regulations Regarding Reimbursement for Health Services.--The
    Secretary shall issue regulations regarding the reimbursement for
    health services provided by SBHCs to individuals eligible to receive
    such services through the program under this section, including
    reimbursement under any insurance policy or any Federal or State health
    benefits program (including titles XIX and XXI of the Social Security
    Act).
        ``(j) Technical Assistance.--The Secretary shall provide (either
    directly or by grant or contract) technical and other assistance to
    SBHCs to assist such SBHCs to meet the requirements of this section.
    Such assistance may include fiscal and program management assistance,
    training in fiscal and program management, operational and
    administrative support, and the provision of information to the SBHCs
    of the variety of resources available under this title and how those
    resources can be best used to meet the health needs of the communities
    served by the SBHCs.
        ``(k) Evaluation; Report.--The Secretary shall--
                ``(1) develop and implement a plan for evaluating SBHCs and
            monitoring quality performances under the awards made under
            this section; and
                ``(2) submit to the Congress on an annual basis a report on
            the program under this section.
        ``(l) Definitions.--In this section:
                ``(1) Comprehensive primary health services.--The term
            `comprehensive primary health services' means the core services
            offered by SBHCs, which shall include the following:
                        ``(A) Physical.--Comprehensive health assessments,
                    diagnosis, and treatment of minor, acute, and chronic
                    medical conditions and referrals to, and follow-up for,
                    specialty care.
                        ``(B) Mental health.--Mental health assessments,
                    crisis intervention, counseling, treatment, and
                    referral to a continuum of services including emergency
                    psychiatric care, community support programs, inpatient
                    care, and outpatient programs.
                        ``(C) Optional services.--Additional services,
                    which may include oral health, social, and age-
                    appropriate health education services, including
                    nutritional counseling.
                ``(2) Medically underserved children and adolescents.--The
            term `medically underserved children and adolescents' means a
            population of children and adolescents who are residents of an
            area designated by the Secretary as an area with a shortage of
            personal health services and health infrastructure for such
            children and adolescents.
                ``(3) School-based health clinic.--The term `school-based
            health clinic' means a health clinic that--
                        ``(A) is located in, or is adjacent to, a school
                    facility of a local educational agency;
                        ``(B) is organized through school, community, and
                    health provider relationships;
                        ``(C) is administered by a sponsoring facility; and
                        ``(D) provides, at a minimum, comprehensive primary
                    health services during school hours to children and
                    adolescents by health professionals in accordance with
                    State and local laws and regulations, established
                    standards, and community practice.
                ``(4) Sponsoring facility.--The term `sponsoring facility'
            is--
                        ``(A) a hospital;
                        ``(B) a public health department;
                        ``(C) a community health center;
                        ``(D) a nonprofit health care agency;
                        ``(E) a local educational agency; or
                        ``(F) a program administered by the Indian Health
                    Service or the Bureau of Indian Affairs or operated by
                    an Indian tribe or a tribal organization under the
                    Indian Self-Determination and Education Assistance Act,
                    a Native Hawaiian entity, or an urban Indian program
                    under title V of the Indian Health Care Improvement
                    Act.
        ``(m) Authorization of Appropriations.--For purposes of carrying
    out this section, there are authorized to be appropriated $50,000,000
    for fiscal year 2010 and such sums as may be necessary for each of the
    fiscal years 2011 through 2014.''.
        (b) Effective Date.--The Secretary of Health and Human Services
    shall begin awarding grants under section 399Z-1 of the Public Health
    Service Act, as added by subsection (b), not later than July 1, 2010,
    without regard to whether or not final regulations have been issued
    under section 399Z-1(h) of such Act.

                  Subtitle C--National Medical Device Registry

    SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY.

        (a) Registry.--
                (1) In general.--Section 519 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 360i) is amended--
                        (A) by redesignating subsection (g) as subsection
                    (h); and
                        (B) by inserting after subsection (f) the
                    following:

                       ``National Medical Device Registry

        ``(g)(1) The Secretary shall establish a national medical device
    registry (in this subsection referred to as the `registry') to
    facilitate analysis of postmarket safety and outcomes data on each
    device that--
                ``(A) is or has been used in or on a patient; and
                ``(B) is--
                        ``(i) a class III device; or
                        ``(ii) a class II device that is implantable, life-
                    supporting, or life-sustaining.
        ``(2) In developing the registry, the Secretary shall, in
    consultation with the Commissioner of Food and Drugs, the Administrator
    of the Centers for Medicare & Medicaid Services, the head of the Office
    of the National Coordinator for Health Information Technology, and the
    Secretary of Veterans Affairs, determine the best methods for--
                ``(A) including in the registry, in a manner consistent
            with subsection (f), appropriate information to identify each
            device described in paragraph (1) by type, model, and serial
            number or other unique identifier;
                ``(B) validating methods for analyzing patient safety and
            outcomes data from multiple sources and for linking such data
            with the information included in the registry as described in
            subparagraph (A), including, to the extent feasible, use of--
                        ``(i) data provided to the Secretary under other
                    provisions of this chapter; and
                        ``(ii) information from public and private sources
                    identified under paragraph (3);
                ``(C) integrating the activities described in this
            subsection with--
                        ``(i) activities under paragraph (3) of section
                    505(k) (relating to active postmarket risk
                    identification);
                        ``(ii) activities under paragraph (4) of section
                    505(k) (relating to advanced analysis of drug safety
                    data); and
                        ``(iii) other postmarket device surveillance
                    activities of the Secretary authorized by this chapter;
                    and
                ``(D) providing public access to the data and analysis
            collected or developed through the registry in a manner and
            form that protects patient privacy and proprietary information
            and is comprehensive, useful, and not misleading to patients,
            physicians, and scientists.
        ``(3)(A) To facilitate analyses of postmarket safety and patient
    outcomes for devices described in paragraph (1), the Secretary shall,
    in collaboration with public, academic, and private entities, develop
    methods to--
                        ``(i) obtain access to disparate sources of patient
                    safety and outcomes data, including--
                                ``(I) Federal health-related electronic
                            data (such as data from the Medicare program
                            under title XVIII of the Social Security Act or
                            from the health systems of the Department of
                            Veterans Affairs);
                                ``(II) private sector health-related
                            electronic data (such as pharmaceutical
                            purchase data and health insurance claims
                            data); and
                                ``(III) other data as the Secretary deems
                            necessary to permit postmarket assessment of
                            device safety and effectiveness; and
                        ``(ii) link data obtained under clause (i) with
                    information in the registry.
        ``(B) In this paragraph, the term `data' refers to information
    respecting a device described in paragraph (1), including claims data,
    patient survey data, standardized analytic files that allow for the
    pooling and analysis of data from disparate data environments,
    electronic health records, and any other data deemed appropriate by the
    Secretary.
        ``(4) Not later than 36 months after the date of the enactment of
    this subsection, the Secretary shall promulgate regulations for
    establishment and operation of the registry under paragraph (1). Such
    regulations--
                ``(A)(i) in the case of devices that are described in
            paragraph (1) and sold on or after the date of the enactment of
            this subsection, shall require manufacturers of such devices to
            submit information to the registry, including, for each such
            device, the type, model, and serial number or, if required
            under subsection (f), other unique device identifier; and
                ``(ii) in the case of devices that are described in
            paragraph (1) and sold before such date, may require
            manufacturers of such devices to submit such information to the
            registry, if deemed necessary by the Secretary to protect the
            public health;
                ``(B) shall establish procedures--
                        ``(i) to permit linkage of information submitted
                    pursuant to subparagraph (A) with patient safety and
                    outcomes data obtained under paragraph (3); and
                        ``(ii) to permit analyses of linked data;
                ``(C) may require device manufacturers to submit such other
            information as is necessary to facilitate postmarket
            assessments of device safety and effectiveness and notification
            of device risks;
                ``(D) shall establish requirements for regular and timely
            reports to the Secretary, which shall be included in the
            registry, concerning adverse event trends, adverse event
            patterns, incidence and prevalence of adverse events, and other
            information the Secretary determines appropriate, which may
            include data on comparative safety and outcomes trends; and
                ``(E) shall establish procedures to permit public access to
            the information in the registry in a manner and form that
            protects patient privacy and proprietary information and is
            comprehensive, useful, and not misleading to patients,
            physicians, and scientists.
        ``(5) To carry out this subsection, there are authorized to be
    appropriated such sums as may be necessary for fiscal years 2010 and
    2011.''.
                (2) Effective date.--The Secretary of Health and Human
            Services shall establish and begin implementation of the
            registry under section 519(g) of the Federal Food, Drug, and
            Cosmetic Act, as added by paragraph (1), by not later than the
            date that is 36 months after the date of the enactment of this
            Act, without regard to whether or not final regulations to
            establish and operate the registry have been promulgated by
            such date.
                (3) Conforming amendment.--Section 303(f)(1)(B)(ii) of the
            Federal Food, Drug, and Cosmetic Act (21 U.S.C.
            333(f)(1)(B)(ii)) is amended by striking ``519(g)'' and
            inserting ``519(h)''.
        (b) Electronic Exchange and Use in Certified Electronic Health
    Records of Unique Device Identifiers.--
                (1) Recommendations.--The HIT Policy Committee established
            under section 3002 of the Public Health Service Act (42 U.S.C.
            300jj-12) shall recommend to the head of the Office of the
            National Coordinator for Health Information Technology
            standards, implementation specifications, and certification
            criteria for the electronic exchange and use in certified
            electronic health records of a unique device identifier for
            each device described in section 519(g)(1) of the Federal Food,
            Drug, and Cosmetic Act, as added by subsection (a).
                (2) Standards, implementation criteria, and certification
            criteria.--The Secretary of the Health Human Services, acting
            through the head of the Office of the National Coordinator for
            Health Information Technology, shall adopt standards,
            implementation specifications, and certification criteria for
            the electronic exchange and use in certified electronic health
            records of a unique device identifier for each device described
            in paragraph (1), if such an identifier is required by section
            519(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
            360i(f)) for the device.

     Subtitle D--Grants for Comprehensive Programs To Provide Education to
                    Nurses and Create a Pipeline to Nursing

    SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.

        (a) Purposes.--It is the purpose of this section to authorize
    grants to--
                (1) address the projected shortage of nurses by funding
            comprehensive programs to create a career ladder to nursing
            (including Certified Nurse Assistants, Licensed Practical
            Nurses, Licensed Vocational Nurses, and Registered Nurses) for
            incumbent ancillary health care workers;
                (2) increase the capacity for educating nurses by
            increasing both nurse faculty and clinical opportunities
            through collaborative programs between staff nurse
            organizations, health care providers, and accredited schools of
            nursing; and
                (3) provide training programs through education and
            training organizations jointly administered by health care
            providers and health care labor organizations or other
            organizations representing staff nurses and frontline health
            care workers, working in collaboration with accredited schools
            of nursing and academic institutions.
        (b) Grants.--Not later than 6 months after the date of the
    enactment of this Act, the Secretary of Labor (referred to in this
    section as the ``Secretary'') shall establish a partnership grant
    program to award grants to eligible entities to carry out comprehensive
    programs to provide education to nurses and create a pipeline to
    nursing for incumbent ancillary health care workers who wish to advance
    their careers, and to otherwise carry out the purposes of this section.
        (c) Eligibility.--To be eligible for a grant under this section, an
    entity shall be--
                (1) a health care entity that is jointly administered by a
            health care employer and a labor union representing the health
            care employees of the employer and that carries out activities
            using labor management training funds as provided for under
            section 302(c)(6) of the Labor Management Relations Act, 1947
            (29 U.S.C. 186(c)(6));
                (2) an entity that operates a training program that is
            jointly administered by--
                        (A) one or more health care providers or
                    facilities, or a trade association of health care
                    providers; and
                        (B) one or more organizations which represent the
                    interests of direct care health care workers or staff
                    nurses and in which the direct care health care workers
                    or staff nurses have direct input as to the leadership
                    of the organization;
                (3) a State training partnership program that consists of
            nonprofit organizations that include equal participation from
            industry, including public or private employers, and labor
            organizations including joint labor-management training
            programs, and which may include representatives from local
            governments, worker investment agency one-stop career centers,
            community-based organizations, community colleges, and
            accredited schools of nursing; or
                (4) a school of nursing (as defined in section 801 of the
            Public Health Service Act (42 U.S.C. 296)).
        (d) Additional Requirements for Health Care Employer Described in
    Subsection (c).--To be eligible for a grant under this section, a
    health care employer described in subsection (c) shall demonstrate that
    it--
                (1) has an established program within their facility to
            encourage the retention of existing nurses;
                (2) provides wages and benefits to its nurses that are
            competitive for its market or that have been collectively
            bargained with a labor organization; and
                (3) supports programs funded under this section through 1
            or more of the following:
                        (A) The provision of paid leave time and continued
                    health coverage to incumbent health care workers to
                    allow their participation in nursing career ladder
                    programs, including certified nurse assistants,
                    licensed practical nurses, licensed vocational nurses,
                    and registered nurses.
                        (B) Contributions to a joint labor-management
                    training fund which administers the program involved.
                        (C) The provision of paid release time, incentive
                    compensation, or continued health coverage to staff
                    nurses who desire to work full- or part-time in a
                    faculty position.
                        (D) The provision of paid release time for staff
                    nurses to enable them to obtain a bachelor of science
                    in nursing degree, other advanced nursing degrees,
                    specialty training, or certification program.
                        (E) The payment of tuition assistance which is
                    managed by a joint labor-management training fund or
                    other jointly administered program.
        (e) Other Requirements.--
                (1) Matching requirement.--
                        (A) In general.--The Secretary may not make a grant
                    under this section unless the applicant involved
                    agrees, with respect to the costs to be incurred by the
                    applicant in carrying out the program under the grant,
                    to make available non-Federal contributions (in cash or
                    in kind under subparagraph (B)) toward such costs in an
                    amount equal to not less than $1 for each $1 of Federal
                    funds provided in the grant. Such contributions may be
                    made directly or through donations from public or
                    private entities, or may be provided through the cash
                    equivalent of paid release time provided to incumbent
                    worker students.
                        (B) Determination of amount of non-federal
                    contribution.--Non-Federal contributions required in
                    subparagraph (A) may be in cash or in kind (including
                    paid release time), fairly evaluated, including
                    equipment or services (and excluding indirect or
                    overhead costs). Amounts provided by the Federal
                    Government, or services assisted or subsidized to any
                    significant extent by the Federal Government, may not
                    be included in determining the amount of such non-
                    Federal contributions.
                (2) Required collaboration.--Entities carrying out or
            overseeing programs carried out with assistance provided under
            this section shall demonstrate collaboration with accredited
            schools of nursing which may include community colleges and
            other academic institutions providing associate, bachelor's, or
            advanced nursing degree programs or specialty training or
            certification programs.
        (f) Use of Funds.--Amounts awarded to an entity under a grant under
    this section shall be used for the following:
                (1) To carry out programs that provide education and
            training to establish nursing career ladders to educate
            incumbent health care workers to become nurses (including
            certified nurse assistants, licensed practical nurses, licensed
            vocational nurses, and registered nurses). Such programs shall
            include one or more of the following:
                        (A) Preparing incumbent workers to return to the
                    classroom through English -as-a-second language
                    education, GED education, pre-college counseling,
                    college preparation classes, and support with entry
                    level college classes that are a prerequisite to
                    nursing.
                        (B) Providing tuition assistance with preference
                    for dedicated cohort classes in community colleges,
                    universities, accredited schools of nursing with
                    supportive services including tutoring and counseling.
                        (C) Providing assistance in preparing for and
                    meeting all nursing licensure tests and requirements.
                        (D) Carrying out orientation and mentorship
                    programs that assist newly graduated nurses in
                    adjusting to working at the bedside to ensure their
                    retention postgraduation, and ongoing programs to
                    support nurse retention.
                        (E) Providing stipends for release time and
                    continued health care coverage to enable incumbent
                    health care workers to participate in these programs.
                (2) To carry out programs that assist nurses in obtaining
            advanced degrees and completing specialty training or
            certification programs and to establish incentives for nurses
            to assume nurse faculty positions on a part-time or full-time
            basis. Such programs shall include one or more of the
            following:
                        (A) Increasing the pool of nurses with advanced
                    degrees who are interested in teaching by funding
                    programs that enable incumbent nurses to return to
                    school.
                        (B) Establishing incentives for advanced degree
                    bedside nurses who wish to teach in nursing programs so
                    they can obtain a leave from their bedside position to
                    assume a full- or part-time position as adjunct or
                    full-time faculty without the loss of salary or
                    benefits.
                        (C) Collaboration with accredited schools of
                    nursing which may include community colleges and other
                    academic institutions providing associate, bachelor's,
                    or advanced nursing degree programs, or specialty
                    training or certification programs, for nurses to carry
                    out innovative nursing programs which meet the needs of
                    bedside nursing and health care providers.
        (g) Preference.--In awarding grants under this section the
    Secretary shall give preference to programs that--
                (1) provide for improving nurse retention;
                (2) provide for improving the diversity of the new nurse
            graduates to reflect changes in the demographics of the patient
            population;
                (3) provide for improving the quality of nursing education
            to improve patient care and safety;
                (4) have demonstrated success in upgrading incumbent health
            care workers to become nurses or which have established
            effective programs or pilots to increase nurse faculty; or
                (5) are modeled after or affiliated with such programs
            described in paragraph (4).
        (h) Evaluation.--
                (1) Program evaluations.--An entity that receives a grant
            under this section shall annually evaluate, and submit to the
            Secretary a report on, the activities carried out under the
            grant and the outcomes of such activities. Such outcomes may
            include--
                        (A) an increased number of incumbent workers
                    entering an accredited school of nursing and in the
                    pipeline for nursing programs;
                        (B) an increasing number of graduating nurses and
                    improved nurse graduation and licensure rates;
                        (C) improved nurse retention;
                        (D) an increase in the number of staff nurses at
                    the health care facility involved;
                        (E) an increase in the number of nurses with
                    advanced degrees in nursing;
                        (F) an increase in the number of nurse faculty;
                        (G) improved measures of patient quality (which may
                    include staffing ratios of nurses, patient satisfaction
                    rates, patient safety measures); and
                        (H) an increase in the diversity of new nurse
                    graduates relative to the patient population.
                (2) General report.--Not later than 2 years after the date
            of the enactment of this Act, and annually thereafter, the
            Secretary of Labor shall, using data and information from the
            reports received under paragraph (1), submit to the Congress a
            report concerning the overall effectiveness of the grant
            program carried out under this section.
        (i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary.

     Subtitle E--States Failing To Adhere to Certain Employment Obligations

    SEC. 2541. LIMITATION ON FEDERAL FUNDS.

        A State is eligible for Federal funds under the provisions of the
    Public Health Service Act (42 U.S.C. 201 et seq.) only if the State--
                (1) agrees to be subject in its capacity as an employer to
            each obligation under subdivision A of this division and the
            amendments made by such subdivision applicable to persons in
            their capacity as an employer; and
                (2) assures that all political subdivisions in the State
            will do the same.

       DIVISION II--COMMITTEE ON EDUCATION AND LABOR: HEALTH CARE REFORM

    SECTION 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, AND SUBTITLES.

        (a) Table of Subdivisions, Titles, and Subtitles.--This division is
    divided into subdivisions, titles, and subtitles as follows:

                 Subdivision A--Affordable Health Care Choices

     TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                         Subtitle A--General Standards

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

                  Subtitle D--Additional Consumer Protections

                             Subtitle E--Governance

           Subtitle F--Relation to Other Requirements; Miscellaneous

                         Subtitle G--Early Investments

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

                   Subtitle B--Public Health Insurance Option

                  Subtitle C--Individual Affordability Credits

                         Subtitle D--State Innovation.

                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

                      Subtitle B--Employer Responsibility

             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

    Subtitle B--Credit for Small Business Employee Health Coverage Expenses

        Subtitle C--Disclosures To Carry Out Health Insurance Exchange
                                   Subsidies

                      Subtitle D--Other Revenue Provisions

               Subdivision B--Medicare and Medicaid Improvements

                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                    Subtitle B--Provisions Related to Part B

            Subtitle C--Provisions Related to Medicare Parts A and B

                     Subtitle D--Medicare Advantage Reforms

                  Subtitle E--Improvements to Medicare Part D

                 Subtitle F--Medicare Rural Access Protections

                  TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS

      Subtitle A--Improving and Simplifying Financial Assistance for Low
                         Income Medicare Beneficiaries

                    Subtitle B--Reducing Health Disparities

                     Subtitle C--Miscellaneous Improvements

        TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
                                COORDINATED CARE

                               TITLE IV--QUALITY

                 Subtitle A--Comparative Effectiveness Research

                     Subtitle B--Nursing Home Transparency

                        Subtitle C--Quality Measurements

               Subtitle D--Physician Payments Sunshine Provision

       Subtitle E--Public Reporting on Health Care-Associated Infections

                  TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

                          TITLE VI--PROGRAM INTEGRITY

         Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse

               Subtitle B--Enhanced Penalties for Fraud and Abuse

             Subtitle C--Enhanced Program and Provider Protections

     Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and
                                     Abuse

                          TITLE VII--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

                             Subtitle B--Prevention

                               Subtitle C--Access

                              Subtitle D--Coverage

                             Subtitle E--Financing

                      Subtitle F--Waste, Fraud, and Abuse

                  Subtitle G--Puerto Rico and the Territories

                           Subtitle H--Miscellaneous

                     TITLE VIII--REVENUE-RELATED PROVISIONS

                       TITLE IX--MISCELLANEOUS PROVISIONS

             Subdivision C--Public Health and Workforce Development

                       TITLE I--COMMUNITY HEALTH CENTERS

                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                         Subtitle B--Nursing Workforce

                      Subtitle C--Public Health Workforce

         Subtitle D--Adapting Workforce to Evolving Health System Needs

                       TITLE III--PREVENTION AND WELLNESS

                       TITLE IV--QUALITY AND SURVEILLANCE

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

                    Subtitle B--School-Based Health Clinics

                  Subtitle C--National Medical Device Registry

     Subtitle D--Grants for Comprehensive Programs to Provide Education to
                    Nurses and Create a Pipeline to Nursing

     Subtitle E--States Failing To Adhere to Certain Employment Obligations

       Subtitle F--Standards for Accessibility to Medical Equipment for
                         Individuals With Disabilities

                        Subtitle G--Other Grant Programs

            Subtitle H--Long-term Care and Family Caregiver Support

                          Subtitle I--Online Resources

        (b) Short Title.--This division may be cited as the ``America's
    Affordable Health Choices Act of 2009''.

                 SUBDIVISION A--AFFORDABLE HEALTH CARE CHOICES

    SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; GENERAL
                  DEFINITIONS.

        (a) Purpose.--
                (1) In general.--The purpose of this subdivision is to
            provide affordable, quality health care for all Americans and
            reduce the growth in health care spending.
                (2) Building on current system.--This subdivision achieves
            this purpose by building on what works in today's health care
            system, while repairing the aspects that are broken.
                (3) Insurance reforms.--This subdivision--
                        (A) enacts strong insurance market reforms;
                        (B) creates a new Health Insurance Exchange, with a
                    public health insurance option alongside private plans;
                        (C) includes sliding scale affordability credits;
                    and
                        (D) initiates shared responsibility among workers,
                    employers, and the government;
            so that all Americans have coverage of essential health
            benefits.
                (4) Health delivery reform.--This subdivision institutes
            health delivery system reforms both to increase quality and to
            reduce growth in health spending so that health care becomes
            more affordable for businesses, families, and government.
        (b) Table of Contents of Subdivision.--The table of contents of
    this subdivision is as follows:

    Sec. 100. Purpose; table of contents of subdivision; general
                                definitions.
     TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                         Subtitle A--General Standards

    Sec. 101. Requirements reforming health insurance marketplace.
    Sec. 102. Protecting the choice to keep current coverage.
        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    Sec. 111. Prohibiting pre-existing condition exclusions.
    Sec. 112. Guaranteed issue and renewal for insured plans.
    Sec. 113. Insurance rating rules.
    Sec. 114. Nondiscrimination in benefits; parity in mental health and
                                substance abuse disorder benefits.
    Sec. 115. Ensuring adequacy of provider networks.
    Sec. 116. Ensuring value and lower premiums.
    Sec. 117. Consistency of costs and coverage under qualified health
                                benefits plans during plan year.
        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    Sec. 121. Coverage of essential benefits package.
    Sec. 122. Essential benefits package defined.
    Sec. 123. Health Benefits Advisory Committee.
    Sec. 124. Process for adoption of recommendations; adoption of benefit
                                standards.
    Sec. 125. Prohibition of discrimination in health care services based
                                on religious or spiritual content.
                  Subtitle D--Additional Consumer Protections

    Sec. 131. Requiring fair marketing practices by health insurers.
    Sec. 132. Requiring fair grievance and appeals mechanisms.
    Sec. 133. Requiring information transparency and plan disclosure.
    Sec. 134. Application to qualified health benefits plans not offered
                                through the Health Insurance Exchange.
    Sec. 135. Timely payment of claims.
    Sec. 136. Standardized rules for coordination and subrogation of
                                benefits.
    Sec. 137. Application of administrative simplification.
    Sec. 138. Records relative to prescription information.
                             Subtitle E--Governance

    Sec. 141. Health Choices Administration; Health Choices Commissioner.
    Sec. 142. Duties and authority of Commissioner.
    Sec. 143. Consultation and coordination.
    Sec. 144.  Health Insurance Ombudsman.
           Subtitle F--Relation to Other Requirements; Miscellaneous

    Sec. 151. Relation to other requirements.
    Sec. 152. Prohibiting discrimination in health care.
    Sec. 153. Whistleblower protection.
    Sec. 154. Construction regarding collective bargaining.
    Sec. 155. Severability.
    Sec. 156. Rule of construction regarding Hawaii Prepaid Health Care
                                Act.
    Sec. 157. Increasing meaningful use of electronic health records.
    Sec. 158. Private right of contract with health care providers.
                         Subtitle G--Early Investments

    Sec. 161. Ensuring value and lower premiums.
    Sec. 162. Ending health insurance rescission abuse.
    Sec. 163. Administrative simplification.
    Sec. 164. Reinsurance program for retirees.
    Sec. 165. Prohibition against post-retirement reductions of retiree
                                health benefits by group health plans.
    Sec. 166. Limitations on preexisting condition exclusions in group
                                health plans in advance of applicability of
                                new prohibition of preexisting condition
                                exclusions.
    Sec. 167. Extension of COBRA continuation coverage.
           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

    Sec. 201. Establishment of Health Insurance Exchange; outline of
                                duties; definitions.
    Sec. 202. Exchange-eligible individuals and employers.
    Sec. 203. Benefits package levels.
    Sec. 204. Contracts for the offering of Exchange-participating health
                                benefits plans.
    Sec. 205. Outreach and enrollment of Exchange-eligible individuals and
                                employers in Exchange-participating health
                                benefits plan.
    Sec. 206. Other functions.
    Sec. 207. Health Insurance Exchange Trust Fund.
    Sec. 208. Optional operation of State-based health insurance exchanges.
    Sec. 209. Participation of small employer benefit arrangements.
                   Subtitle B--Public Health Insurance Option

    Sec. 221. Establishment and administration of a public health insurance
                                option as an Exchange-qualified health
                                benefits plan.
    Sec. 222. Premiums and financing.
    Sec. 223. Payment rates for items and services.
    Sec. 224. Modernized payment initiatives and delivery system reform.
    Sec. 225. Provider participation.
    Sec. 226. Application of fraud and abuse provisions.
    Sec. 227. Sense of the House regarding enrollment of Members in the
                                public option.
                  Subtitle C--Individual Affordability Credits

    Sec. 241. Availability through Health Insurance Exchange.
    Sec. 242. Affordable credit eligible individual.
    Sec. 243. Affordable premium credit.
    Sec. 244. Affordability cost-sharing credit.
    Sec. 245. Income determinations.
    Sec. 246. No Federal payment for undocumented aliens.
                          Subtitle D--State Innovation

    Sec. 251. Waiver of ERISA limitation; application instead of state
                                single payer system.
    Sec. 252. Requirements.
    Sec. 253. Definitions.
                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    Sec. 301. Individual responsibility.
                      Subtitle B--Employer Responsibility

               Part 1--Health Coverage Participation Requirements

    Sec. 311. Health coverage participation requirements.
    Sec. 312. Employer responsibility to contribute towards employee and
                                dependent coverage.
    Sec. 313. Employer contributions in lieu of coverage.
    Sec. 314. Authority related to improper steering.
       Part 2--Satisfaction of Health Coverage Participation Requirements

    Sec. 321. Satisfaction of health coverage participation requirements
                                under the Employee Retirement Income
                                Security Act of 1974.
    Sec. 322. Satisfaction of health coverage participation requirements
                                under the Internal Revenue Code of 1986.
    Sec. 323. Satisfaction of health coverage participation requirements
                                under the Public Health Service Act.
    Sec. 324. Additional rules relating to health coverage participation
                                requirements.
             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

                       Part 1--Individual Responsibility

    Sec. 401. Tax on individuals without acceptable health care coverage.
                        Part 2--Employer Responsibility

    Sec. 411. Election to satisfy health coverage participation
                                requirements.
    Sec. 412. Responsibilities of nonelecting employers.
    Subtitle B--Credit for Small Business Employee Health Coverage Expenses

    Sec. 421. Credit for small business employee health coverage expenses.
        Subtitle C--Disclosures To Carry Out Health Insurance Exchange
                                   Subsidies

    Sec. 431. Disclosures to carry out health insurance exchange subsidies.
                      Subtitle D--Other Revenue Provisions

                           Part 1--General Provisions

    Sec. 441. Surcharge on high income individuals.
    Sec. 442. Delay in application of worldwide allocation of interest.
                      Part 2--Prevention of Tax Avoidance

    Sec. 451. Limitation on treaty benefits for certain deductible
                                payments.
    Sec. 452. Codification of economic substance doctrine.
    Sec. 453. Penalties for underpayments.
        (c) General Definitions.--Except as otherwise provided, in this
    subdivision:
                (1) Acceptable coverage.--The term ``acceptable coverage''
            has the meaning given such term in section 202(d)(2).
                (2) Basic plan.--The term ``basic plan'' has the meaning
            given such term in section 203(c).
                (3) Commissioner.--The term ``Commissioner'' means the
            Health Choices Commissioner established under section 141.
                (4) Cost-sharing.--The term ``cost-sharing'' includes
            deductibles, coinsurance, copayments, and similar charges but
            does not include premiums or any network payment differential
            for covered services or spending for non-covered services.
                (5) Dependent.--The term ``dependent'' has the meaning
            given such term by the Commissioner and includes a spouse.
                (6) Employment-based health plan.--The term ``employment-
            based health plan''--
                        (A) means a group health plan (as defined in
                    section 733(a)(1) of the Employee Retirement Income
                    Security Act of 1974);
                        (B) includes such a plan that is the following:
                                (i) Federal, state, and tribal governmental
                            plans.--A governmental plan (as defined in
                            section 3(32) of the Employee Retirement Income
                            Security Act of 1974), including a health
                            benefits plan offered under chapter 89 of title
                            5, United States Code; or
                                (ii) Church plans.--A church plan (as
                            defined in section 3(33) of the Employee
                            Retirement Income Security Act of 1974); and
                        (C) excludes coverage described in section
                    202(d)(2)(E) (relating to TRICARE).
                (7) Enhanced plan.--The term ``enhanced plan'' has the
            meaning given such term in section 203(c).
                (8) Essential benefits package.--The term ``essential
            benefits package'' is defined in section 122(a).
                (9) Family.--The term ``family'' means an individual and
            includes the individual's dependents.
                (10) Federal poverty level; fpl.--The terms ``Federal
            poverty level'' and ``FPL'' have the meaning given the term
            ``poverty line'' in section 673(2) of the Community Services
            Block Grant Act (42 U.S.C. 9902(2)), including any revision
            required by such section.
                (11) Health benefits plan.--The terms ``health benefits
            plan'' means health insurance coverage and an employment-based
            health plan and includes the public health insurance option.
                (12) Health insurance coverage; health insurance issuer.--
            The terms ``health insurance coverage'' and ``health insurance
            issuer'' have the meanings given such terms in section 2791 of
            the Public Health Service Act.
                (13) Health insurance exchange.--The term ``Health
            Insurance Exchange'' means the Health Insurance Exchange
            established under section 201.
                (14) Medicaid.--The term ``Medicaid'' means a State plan
            under title XIX of the Social Security Act (whether or not the
            plan is operating under a waiver under section 1115 of such
            Act).
                (15) Medicare.--The term ``Medicare'' means the health
            insurance programs under title XVIII of the Social Security
            Act.
                (16) Plan sponsor.--The term ``plan sponsor'' has the
            meaning given such term in section 3(16)(B) of the Employee
            Retirement Income Security Act of 1974.
                (17) Plan year.--The term ``plan year'' means--
                        (A) with respect to an employment-based health
                    plan, a plan year as specified under such plan; or
                        (B) with respect to a health benefits plan other
                    than an employment-based health plan, a 12-month period
                    as specified by the Commissioner.
                (18) Premium plan; premium-plus plan.--The terms ``premium
            plan'' and ``premium-plus plan'' have the meanings given such
            terms in section 203(c).
                (19) QHBP offering entity.--The terms ``QHBP offering
            entity'' means, with respect to a health benefits plan that
            is--
                        (A) a group health plan (as defined, subject to
                    subsection (d), in section 733(a)(1) of the Employee
                    Retirement Income Security Act of 1974), the plan
                    sponsor in relation to such group health plan, except
                    that, in the case of a plan maintained jointly by 1 or
                    more employers and 1 or more employee organizations and
                    with respect to which an employer is the primary source
                    of financing, such term means such employer;
                        (B) health insurance coverage, the health insurance
                    issuer offering the coverage;
                        (C) the public health insurance option, the
                    Secretary of Health and Human Services;
                        (D) a non-Federal governmental plan (as defined in
                    section 2791(d) of the Public Health Service Act), the
                    State or political subdivision of a State (or agency or
                    instrumentality of such State or subdivision) which
                    establishes or maintains such plan; or
                        (E) a Federal governmental plan (as defined in
                    section 2791(d) of the Public Health Service Act), the
                    appropriate Federal official.
                (20) Qualified health benefits plan.--The term ``qualified
            health benefits plan'' means a health benefits plan that meets
            the requirements for such a plan under title I and includes the
            public health insurance option.
                (21) Public health insurance option.--The term ``public
            health insurance option'' means the public health insurance
            option as provided under subtitle B of title II.
                (22) Service area; premium rating area.--The terms
            ``service area'' and ``premium rating area'' mean with respect
            to health insurance coverage--
                        (A) offered other than through the Health Insurance
                    Exchange, such an area as established by the QHBP
                    offering entity of such coverage in accordance with
                    applicable State law; and
                        (B) offered through the Health Insurance Exchange,
                    such an area as established by such entity in
                    accordance with applicable State law and applicable
                    rules of the Commissioner for Exchange-participating
                    health benefits plans.
                (23) State.--The term ``State'' means the 50 States and the
            District of Columbia.
                (24) State medicaid agency.--The term ``State Medicaid
            agency'' means, with respect to a Medicaid plan, the single
            State agency responsible for administering such plan under
            title XIX of the Social Security Act.
                (25) Y1, y2, etc..--The terms ``Y1'' , ``Y2'', ``Y3'',
            ``Y4'', ``Y5'', and similar subsequently numbered terms, mean
            2013 and subsequent years, respectively.
                (26) Employee premium.--The term ``employee premium'' does
            not include a collectively bargained premium in the case of a
            group health plan (as defined in section 733(a)(1) of the
            Employee Retirement Income Security Act of 1974) that is a
            multiemployer plan (as defined in section 3(37) of such Act).

     TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                         Subtitle A--General Standards

    SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.

        (a) Purpose.--The purpose of this title is to establish standards
    to ensure that new health insurance coverage and employment-based
    health plans that are offered meet standards guaranteeing access to
    affordable coverage, essential benefits, and other consumer
    protections.
        (b) Requirements for Qualified Health Benefits Plans.--On or after
    the first day of Y1, a health benefits plan shall not be a qualified
    health benefits plan under this subdivision unless the plan meets the
    applicable requirements of the following subtitles for the type of plan
    and plan year involved:
                (1) Subtitle B (relating to affordable coverage).
                (2) Subtitle C (relating to essential benefits).
                (3) Subtitle D (relating to consumer protection).
        (c) Terminology.--In this subdivision:
                (1) Enrollment in employment-based health plans.--An
            individual shall be treated as being ``enrolled'' in an
            employment-based health plan if the individual is a participant
            or beneficiary (as such terms are defined in section 3(7) and
            3(8), respectively, of the Employee Retirement Income Security
            Act of 1974) in such plan.
                (2) Individual and group health insurance coverage.--The
            terms ``individual health insurance coverage'' and ``group
            health insurance coverage'' mean health insurance coverage
            offered in the individual market or large or small group
            market, respectively, as defined in section 2791 of the Public
            Health Service Act.
        (d) Sense of Congress on Health Care Needs of United States
    Territories.--It is the sense of the Congress that the reforms made by
    H.R. 3200, as introduced, must be strengthened to meaningfully address
    the health care needs of residents of American Samoa, the Commonwealth
    of the Northern Mariana Islands, Guam, Puerto Rico, and the United
    States Virgin Islands and Congress is committed to working with the
    representatives of these territories to ensure that residents of these
    territories have access to high-quality and affordable health care in
    such a way that best serves their unique needs.

    SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

        (a) Grandfathered Health Insurance Coverage Defined.--Subject to
    the succeeding provisions of this section, for purposes of establishing
    acceptable coverage under this subdivision, the term ``grandfathered
    health insurance coverage'' means individual health insurance coverage
    that is offered and in force and effect before the first day of Y1 if
    the following conditions are met:
                (1) Limitation on new enrollment.--
                        (A) In general.--Except as provided in this
                    paragraph, the individual health insurance issuer
                    offering such coverage does not enroll any individual
                    in such coverage if the first effective date of
                    coverage is on or after the first day of Y1.
                        (B) Dependent coverage permitted.--Subparagraph (A)
                    shall not affect the subsequent enrollment of a
                    dependent of an individual who is covered as of such
                    first day.
                (2) Limitation on changes in terms or conditions.--Subject
            to paragraph (3) and except as required by law, the issuer does
            not change any of its terms or conditions, including benefits
            and cost-sharing, from those in effect as of the day before the
            first day of Y1.
                (3) Restrictions on premium increases.--The issuer cannot
            vary the percentage increase in the premium for a risk group of
            enrollees in specific grandfathered health insurance coverage
            without changing the premium for all enrollees in the same risk
            group at the same rate, as specified by the Commissioner.
        (b) Grace Period for Current Employment-based Health Plans.--
                (1) Grace period.--
                        (A) In general.--The Commissioner shall establish a
                    grace period whereby, for plan years beginning after
                    the end of the 5-year period beginning with Y1, an
                    employment-based health plan in operation as of the day
                    before the first day of Y1 must meet the same
                    requirements as apply to a qualified health benefits
                    plan under section 101, including the essential benefit
                    package requirement under section 121.
                        (B) Exception for limited benefits plans.--
                    Subparagraph (A) shall not apply to an employment-based
                    health plan in which the coverage consists only of one
                    or more of the following:
                                (i) Any coverage described in section
                            3001(a)(1)(B)(ii)(IV) of division B of the
                            American Recovery and Reinvestment Act of 2009
                            (PL 111-5).
                                (ii) Excepted benefits (as defined in
                            section 733(c) of the Employee Retirement
                            Income Security Act of 1974), including
                            coverage under a specified disease or illness
                            policy described in paragraph (3)(A) of such
                            section.
                                (iii) Such other limited benefits as the
                            Commissioner may specify.
                    In no case shall an employment-based health plan in
                    which the coverage consists only of one or more of the
                    coverage or benefits described in clauses (i) through
                    (iii) be treated as acceptable coverage under this
                    subdivision
                (2) Transitional treatment as acceptable coverage.--During
            the grace period specified in paragraph (1)(A), an employment-
            based health plan that is described in such paragraph shall be
            treated as acceptable coverage under this subdivision.
                (3) Exception for consumer-directed health plans and
            arrangements.--In the case of a group health plan which
            consists of a consumer-directed health plan or arrangement
            (including a high deductible health plan, within the meaning of
            section 223(c)(2) of the Internal Revenue Code of 1986), such
            group health plan shall be treated as acceptable coverage under
            a current group health plan for purposes of this subdivision.
        (c) Limitation on Individual Health Insurance Coverage.--
                (1) In general.--Individual health insurance coverage that
            is not grandfathered health insurance coverage under subsection
            (a) may only be offered on or after the first day of Y1 as an
            Exchange-participating health benefits plan.
                (2) Separate, excepted coverage permitted.--Excepted
            benefits (as defined in section 2791(c) of the Public Health
            Service Act) are not included within the definition of health
            insurance coverage. Nothing in paragraph (1) shall prevent the
            offering, other than through the Health Insurance Exchange, of
            excepted benefits so long as it is offered and priced
            separately from health insurance coverage.

        Subtitle B--Standards Guaranteeing Access to Affordable Coverage

    SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.

        A qualified health benefits plan may not impose any pre-existing
    condition exclusion (as defined in section 2701(b)(1)(A) of the Public
    Health Service Act) or otherwise impose any limit or condition on the
    coverage under the plan with respect to an individual or dependent
    based on any health status-related factors (as defined in section
    2791(d)(9) of the Public Health Service Act) in relation to the
    individual or dependent.

    SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.

        The requirements of sections 2711 (other than subsections (c) and
    (e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and
    subsection (e)) of the Public Health Service Act, relating to
    guaranteed availability and renewability of health insurance coverage,
    shall apply to individuals and employers in all individual and group
    health insurance coverage, whether offered to individuals or employers
    through the Health Insurance Exchange, through any employment-based
    health plan, or otherwise, in the same manner as such sections apply to
    employers and health insurance coverage offered in the small group
    market, except that such section 2712(b)(1) shall apply only if, before
    nonrenewal or discontinuation of coverage, the issuer has provided the
    enrollee with notice of non-payment of premiums and there is a grace
    period during which the enrollees has an opportunity to correct such
    nonpayment. Rescissions of such coverage shall be prohibited except in
    cases of fraud as defined in sections 2712(b)(2) of such Act.

    SEC. 113. INSURANCE RATING RULES.

        (a) In General.--The premium rate charged for an insured qualified
    health benefits plan may not vary except as follows:
                (1) Limited age variation permitted.--By age (within such
            age categories as the Commissioner shall specify) so long as
            the ratio of the highest such premium to the lowest such
            premium does not exceed the ratio of 2 to 1.
                (2) By area.--By premium rating area (as permitted by State
            insurance regulators or, in the case of Exchange-participating
            health benefits plans, as specified by the Commissioner in
            consultation with such regulators).
                (3) By family enrollment.--By family enrollment (such as
            variations within categories and compositions of families) so
            long as the ratio of the premium for family enrollment (or
            enrollments) to the premium for individual enrollment is
            uniform, as specified under State law and consistent with rules
            of the Commissioner.
        (b) Study and Reports.--
                (1) Study.--The Commissioner, in coordination with the
            Secretary of Health and Human Services and the Secretary of
            Labor, shall conduct a study of the large group insured and
            self-insured employer health care markets. Such study shall
            examine the following:
                        (A) The types of employers by key characteristics,
                    including size, that purchase insured products versus
                    those that self-insure.
                        (B) The similarities and differences between
                    typical insured and self-insured health plans.
                        (C) The financial solvency and capital reserve
                    levels of employers that self-insure by employer size.
                        (D) The risk of self-insured employers not being
                    able to pay obligations or otherwise becoming
                    financially insolvent.
                        (E) The extent to which rating rules are likely to
                    cause adverse selection in the large group market or to
                    encourage small and mid size employers to self-insure
                (2) Reports.--Not later than 18 months after the date of
            the enactment of this Act, the Commissioner shall submit to
            Congress and the applicable agencies a report on the study
            conducted under paragraph (1). Such report shall include any
            recommendations the Commissioner deems appropriate to ensure
            that the law does not provide incentives for small and mid-size
            employers to self-insure or create adverse selection in the
            risk pools of large group insurers and self-insured employers.
            Not later than 18 months after the first day of Y1, the
            Commissioner shall submit to Congress and the applicable
            agencies an updated report on such study, including updates on
            such recommendations.

    SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND
                  SUBSTANCE ABUSE DISORDER BENEFITS.

        (a) Nondiscrimination in Benefits.--A qualified health benefits
    plan shall comply with standards established by the Commissioner to
    prohibit discrimination in health benefits or benefit structures for
    qualified health benefits plans, building from sections 702 of Employee
    Retirement Income Security Act of 1974, 2702 of the Public Health
    Service Act, and section 9802 of the Internal Revenue Code of 1986.
        (b) Parity in Mental Health and Substance Abuse Disorder
    Benefits.--To the extent such provisions are not superceded by or
    inconsistent with subtitle C, the provisions of section 2705 (other
    than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public
    Health Service Act shall apply to a qualified health benefits plan,
    regardless of whether it is offered in the individual or group market,
    in the same manner as such provisions apply to health insurance
    coverage offered in the large group market.

    SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

        (a) In General.--A qualified health benefits plan that uses a
    provider network for items and services shall meet such standards
    respecting provider networks as the Commissioner may establish to
    assure the adequacy of such networks in ensuring enrollee access to
    such items and services and transparency in the cost-sharing
    differentials between in-network coverage and out-of-network coverage.
        (b) Internet Access to Information.--A qualified health benefits
    plan that uses a provider network shall provide a current listing of
    all providers in its network on its website and such data shall be
    available on the Health Insurance Exchange website as a `click through'
    from the basic information on that plan. The Commissioner shall also
    establish an on-line system whereby an individual may select by name
    any medical provider (as defined by the Commissioner) and be informed
    of the plan or plans with which that provider is contracting.
        (c) Provider Network Defined.--In this subdivision, the term
    ``provider network'' means the providers with respect to which covered
    benefits, treatments, and services are available under a health
    benefits plan.

    SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

        The QHBP offering entity shall provide that for any plan year in
    which a qualified health benefits plan that the entity offers has a
    medical loss ratio (expressed as a percentage) that is less than a
    percentage (not less than 85 percent) specified by the Commissioner,
    the QHBP offering entity offering such plan shall provide for rebates
    to enrollees of payment sufficient to meet such loss ratio. The
    Commissioner shall establish a uniform definition of medical loss ratio
    and methodology for determining how to calculate the medical loss
    ratio. Such methodology shall be designed to take into account the
    special circumstances of smaller and newer plans.

    SEC. 117. CONSISTENCY OF COSTS AND COVERAGE UNDER QUALIFIED HEALTH
                  BENEFITS PLANS DURING PLAN YEAR.

        In the case of health insurance coverage offered under a qualified
    health benefits plan, the coverage and cost of coverage may not be
    changed during the course of a plan year except to increase coverage to
    the enrollee or to lower costs to the enrollee.

        Subtitle C--Standards Guaranteeing Access to Essential Benefits

    SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

        (a) In General.--A qualified health benefits plan shall provide
    coverage that at least meets the benefit standards adopted under
    section 124 for the essential benefits package described in section 122
    for the plan year involved.
        (b) Choice of Coverage.--
                (1) Non-exchange-participating health benefits plans.--In
            the case of a qualified health benefits plan that is not an
            Exchange-participating health benefits plan, such plan may
            offer such coverage in addition to the essential benefits
            package as the QHBP offering entity may specify.
                (2) Exchange-participating health benefits plans.--In the
            case of an Exchange-participating health benefits plan, such
            plan is required under section 203 to provide specified levels
            of benefits and, in the case of a plan offering a premium-plus
            level of benefits, provide additional benefits.
                (3) Continuation of offering of separate excepted benefits
            coverage.--Nothing in this subdivision shall be construed as
            affecting the offering of health benefits in the form of
            excepted benefits (described in section 102(b)(1)(B)(ii)) if
            such benefits are offered under a separate policy, contract, or
            certificate of insurance.
        (c) No Restrictions on Coverage Unrelated to Clinical
    Appropriateness.--A qualified health benefits plan may not impose any
    restriction (other than cost-sharing) unrelated to clinical
    appropriateness on the coverage of the health care items and services.

    SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

        (a) In General.--In this subdivision, the term ``essential benefits
    package'' means health benefits coverage, consistent with standards
    adopted under section 124 to ensure the provision of quality health
    care and financial security, that--
                (1) provides payment for the items and services described
            in subsection (b) in accordance with generally accepted
            standards of medical or other appropriate clinical or
            professional practice;
                (2) limits cost-sharing for such covered health care items
            and services in accordance with such benefit standards,
            consistent with subsection (c);
                (3) does not impose any annual or lifetime limit on the
            coverage of covered health care items and services;
                (4) complies with section 115(a) (relating to network
            adequacy); and
                (5) is equivalent, as certified by Office of the Actuary of
            the Centers for Medicare & Medicaid Services, to the average
            prevailing employer-sponsored coverage.
        (b) Minimum Services to Be Covered.--The items and services
    described in this subsection are the following:
                (1) Hospitalization.
                (2) Outpatient hospital and outpatient clinic services,
            including emergency department services.
                (3) Professional services of physicians and other health
            professionals.
                (4) Such services, equipment, and supplies incident to the
            services of a physician's or a health professional's delivery
            of care in institutional settings, physician offices, patients'
            homes or place of residence, or other settings, as appropriate.
                (5) Prescription drugs.
                (6) Rehabilitative and habilitative services.
                (7) Mental health and substance use disorder services.
                (8) Preventive services, including those services
            recommended with a grade of A or B by the Task Force on
            Clinical Preventive Services and including mental health and
            substance abuse services recommended by the Task Force on
            Clinical Preventive Services and those mental health and
            substance abuse services with compelling research or evidence,
            including Screening, Brief Intervention and Referral to
            Treatment (SBIRT), and those vaccines recommended for use by
            the Director of the Centers for Disease Control and Prevention.
                (9) Maternity care.
                (10) Well baby and well child care and early and periodic
            screening, diagnostic, and treatment services (as defined in
            section 1905(r) of the Social Security Act) at least for
            children under 21 years of age.
                (11) Durable medical equipment, prosthetics, orthotics and
            related supplies.
        (c) Requirements Relating to Cost-sharing and Minimum Actuarial
    Value.--
                (1) No cost-sharing for preventive services.--There shall
            be no cost-sharing under the essential benefits package for
            preventive items and services (as specified under the benefit
            standards), including well baby and well child care.
                (2) Annual limitation.--
                        (A) Annual limitation.--The cost-sharing incurred
                    under the essential benefits package with respect to an
                    individual (or family) for a year does not exceed the
                    applicable level specified in subparagraph (B).
                        (B) Applicable level.--The applicable level
                    specified in this subparagraph for Y1 is $5,000 for an
                    individual and $10,000 for a family. Such levels shall
                    be increased (rounded to the nearest $100) for each
                    subsequent year by the annual percentage increase in
                    the Consumer Price Index (United States city average)
                    applicable to such year.
                        (C) Use of copayments.--In establishing cost-
                    sharing levels for basic, enhanced, and premium plans
                    under this subsection, the Secretary shall, to the
                    maximum extent possible, use only copayments and not
                    coinsurance.
                (3) Minimum actuarial value.--
                        (A) In general.--The cost-sharing under the
                    essential benefits package shall be designed to provide
                    a level of coverage that is designed to provide
                    benefits that are actuarially equivalent to
                    approximately 70 percent of the full actuarial value of
                    the benefits provided under the reference benefits
                    package described in subparagraph (B).
                        (B) Reference benefits package described.--The
                    reference benefits package described in this
                    subparagraph is the essential benefits package if there
                    were no cost-sharing imposed.

    SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

        (a) Establishment.--
                (1) In general.--There is established a private-public
            advisory committee which shall be a panel of medical and other
            experts to be known as the Health Benefits Advisory Committee
            to recommend covered benefits and essential, enhanced, and
            premium plans.
                (2) Chair.--The Surgeon General shall be a member and the
            chair of the Health Benefits Advisory Committee.
                (3) Membership.--The Health Benefits Advisory Committee
            shall be composed of the following members, in addition to the
            Surgeon General:
                        (A) 9 members who are not Federal employees or
                    officers and who are appointed by the President.
                        (B) 9 members who are not Federal employees or
                    officers and who are appointed by the Comptroller
                    General of the United States in a manner similar to the
                    manner in which the Comptroller General appoints
                    members to the Medicare Payment Advisory Commission
                    under section 1805(c) of the Social Security Act.
                        (C) Such even number of members (not to exceed 8)
                    who are Federal employees and officers, as the
                    President may appoint.
            The membership of the Committee shall include one or more
            experts in scientific evidence and clinical practice of
            integrative health care services. Such initial appointments
            shall be made not later than 60 days after the date of the
            enactment of this Act.
                (4) Terms.--Each member of the Health Benefits Advisory
            Committee shall serve a 3-year term on the Committee, except
            that the terms of the initial members shall be adjusted in
            order to provide for a staggered term of appointment for all
            such members.
                (5) Participation.--The membership of the Health Benefits
            Advisory Committee shall at least reflect providers, employers,
            labor, health insurance issuers, experts in health care
            financing and delivery, experts in racial and ethnic
            disparities, experts in care for those with disabilities,
            representatives of relevant governmental agencies. and at least
            one practicing physician or other health professional and an
            expert on children's health and shall represent a balance among
            various sectors of the health care system so that no single
            sector unduly influences the recommendations of such Committee.
            The membership of the Committee shall also include educated
            patients, consumer advocates, or both, who shall include
            persons who represent individuals affected by a specific
            disease or medical condition, are knowledgeable about the
            health care system, and have received training regarding
            health, medical, and scientific matters.
        (b) Duties.--
                (1) Recommendations on benefit standards.--The Health
            Benefits Advisory Committee shall recommend to the Secretary of
            Health and Human Services (in this subtitle referred to as the
            ``Secretary'') benefit standards (as defined in paragraph (4)),
            and periodic updates to such standards. In developing such
            recommendations, the Committee shall--
                        (A) take into account innovation in health care,
                        (B) consider how such standards could reduce health
                    disparities,
                        (C) take into account integrative health care
                    services, and
                        (D) take into account typical multiemployer plan
                    benefit structures and the impact of the essential
                    benefit package on such plans.
                (2) Deadline.--The Health Benefits Advisory Committee shall
            recommend initial benefit standards to the Secretary not later
            than 1 year after the date of the enactment of this Act.
                (3) State input.--The Health Benefits Advisory Committee
            shall examine the health coverage laws and benefits of each
            State in developing recommendations under this subsection and
            may incorporate such coverage and benefits as the Committee
            determines to be appropriate and consistent with this division.
            The Health Benefits Advisory Committee shall also seek input
            from the States and consider recommendations on how to ensure
            that the quality of health coverage does not decline in any
            State.
                (4) Public input.--The Health Benefits Advisory Committee
            shall allow for public input as a part of developing
            recommendations under this subsection.
                (5) Benefit standards defined.--In this subtitle, the term
            ``benefit standards'' means standards respecting--
                        (A) the essential benefits package described in
                    section 122, including categories of covered
                    treatments, items and services within benefit classes,
                    and cost-sharing; and
                        (B) the cost-sharing levels for enhanced plans and
                    premium plans (as provided under section 203(c))
                    consistent with paragraph (5).
                (6) Levels of cost-sharing for enhanced and premium
            plans.--
                        (A) Enhanced plan.--The level of cost-sharing for
                    enhanced plans shall be designed so that such plans
                    have benefits that are actuarially equivalent to
                    approximately 85 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
                        (B) Premium plan.--The level of cost-sharing for
                    premium plans shall be designed so that such plans have
                    benefits that are actuarially equivalent to
                    approximately 95 percent of the actuarial value of the
                    benefits provided under the reference benefits package
                    described in section 122(c)(3)(B).
                (7) Recommendations of integrative health care services
            task force.--
                        (A) Inclusion in committee's recommendations.--The
                    Health Benefits Advisory Committee shall include in its
                    recommendations under paragraph (1) the recommendations
                    made by the Integrative Health Care Services Task Force
                    established under subparagraph (B).
                        (B) Establishment of task force.--The Health
                    Benefits Advisory Committee shall establish an
                    Integrative Health Care Services Task Force. Such Task
                    Force shall consist of 5 experts with expertise in
                    research in, and practice of, integrative health care.
                    Such experts shall be appointed by the Committee from
                    among experts nominated by the Secretary, in
                    consultation with the National Center for Complementary
                    and Alternative Medicine at the National Institutes of
                    Health. The duty of the Task Force shall be to make
                    recommendations to the Committee on evidence-based,
                    clinically effective, and safe integrative care
                    services.
        (c) Operations.--
                (1) Per diem pay.--Each member of the Health Benefits
            Advisory Committee shall receive travel expenses, including per
            diem in accordance with applicable provisions under subchapter
            I of chapter 57 of title 5, United States Code, and shall
            otherwise serve without additional pay.
                (2) Members not treated as federal employees.--Members of
            the Health Benefits Advisory Committee shall not be considered
            employees of the Federal government solely by reason of any
            service on the Committee.
                (3) Application of faca.--The Federal Advisory Committee
            Act (5 U.S.C. App.), other than section 14, shall apply to the
            Health Benefits Advisory Committee.
        (d) Publication.--The Secretary shall provide for publication in
    the Federal Register and the posting on the Internet website of the
    Department of Health and Human Services of all recommendations made by
    the Health Benefits Advisory Committee under this section.

    SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT
                  STANDARDS.

        (a) Process for Adoption of Recommendations.--
                (1) Review of recommended standards.--Not later than 45
            days after the date of receipt of benefit standards recommended
            under section 123 (including such standards as modified under
            paragraph (2)(B)), the Secretary shall review such standards
            and shall determine whether to propose adoption of such
            standards as a package.
                (2) Determination to adopt standards.--If the Secretary
            determines--
                        (A) to propose adoption of benefit standards so
                    recommended as a package, the Secretary shall, by
                    regulation under section 553 of title 5, United States
                    Code, propose adoption such standards; or
                        (B) not to propose adoption of such standards as a
                    package, the Secretary shall notify the Health Benefits
                    Advisory Committee in writing of such determination and
                    the reasons for not proposing the adoption of such
                    recommendation and provide the Committee with a further
                    opportunity to modify its previous recommendations and
                    submit new recommendations to the Secretary on a timely
                    basis.
                (3) Contingency.--If, because of the application of
            paragraph (2)(B), the Secretary would otherwise be unable to
            propose initial adoption of such recommended standards by the
            deadline specified in subsection (b)(1), the Secretary shall,
            by regulation under section 553 of title 5, United States Code,
            propose adoption of initial benefit standards by such deadline.
                (4) Publication.--The Secretary shall provide for
            publication in the Federal Register of all determinations made
            by the Secretary under this subsection.
        (b) Adoption of Standards.--
                (1) Initial standards.--Not later than 18 months after the
            date of the enactment of this Act, the Secretary shall, through
            the rulemaking process consistent with subsection (a), adopt an
            initial set of benefit standards.
                (2) Periodic updating standards.--Under subsection (a), the
            Secretary shall provide for the periodic updating of the
            benefit standards previously adopted under this section.
                (3) Requirement.--The Secretary may not adopt any benefit
            standards for an essential benefits package or for level of
            cost-sharing that are inconsistent with the requirements for
            such a package or level under sections 122 and 123(b)(5).

    SEC. 125. PROHIBITION OF DISCRIMINATION IN HEALTH CARE SERVICES BASED
                  ON RELIGIOUS OR SPIRITUAL CONTENT.

        Neither the Commissioner nor any health insurance issuer offering
    health insurance coverage through the Exchange shall discriminate in
    approving or covering a health care service on the basis of its
    religious or spiritual content if expenditures for such a health care
    service are allowable as a deduction under 213(d) of the Internal
    Revenue Code of 1986, as in effect on January 1, 2009.

                  Subtitle D--Additional Consumer Protections

    SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.

        The Commissioner shall establish uniform marketing standards that
    all insured QHBP offering entities shall meet.

    SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.

        (a) In General.--A QHBP offering entity shall provide for timely
    grievance and appeals mechanisms that the Commissioner shall establish.
        (b) Internal Claims and Appeals Process.--Under a qualified health
    benefits plan the QHBP offering entity shall provide an internal claims
    and appeals process that initially incorporates the claims and appeals
    procedures (including urgent claims) set forth at section 2560.503-1 of
    title 29, Code of Federal Regulations, as published on November 21,
    2000 (65 Fed. Reg. 70246) and shall update such process in accordance
    with any standards that the Commissioner may establish.
        (c) External Review Process.--
                (1) In general.--The Commissioner shall establish an
            external review process (including procedures for expedited
            reviews of urgent claims) that provides for an impartial,
            independent, and de novo review of denied claims under this
            subdivision.
                (2) Requiring fair grievance and appeals mechanisms.--A
            determination made, with respect to a qualified health benefits
            plan offered by a QHBP offering entity, under the external
            review process established under this subsection shall be
            binding on the plan and the entity.
        (d) Construction.--Nothing in this section shall be construed as
    affecting the availability of judicial review under State law for
    adverse decisions under subsection (b) or (c), subject to section 151.

    SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

        (a) Accurate and Timely Disclosure.--
                (1) In general.--A qualified health benefits plan shall
            comply with standards established by the Commissioner for the
            accurate and timely disclosure of plan documents, plan terms
            and conditions, claims payment policies and practices, periodic
            financial disclosure, data on enrollment, data on
            disenrollment, data on the number of claims denials, data on
            rating practices, information on cost-sharing and payments with
            respect to any out-of-network coverage, and other information
            as determined appropriate by the Commissioner. The Commissioner
            shall require that such disclosure be provided in plain
            language.
                (2) Plain language.--In this subsection, the term ``plain
            language'' means language that the intended audience, including
            individuals with limited English proficiency, can readily
            understand and use because that language is clean, concise,
            well-organized, and follows other best practices of plain
            language writing.
                (3) Guidance.--The Commissioner shall develop and issue
            guidance on best practices of plain language writing.
        (b) Contracting Reimbursement.--A qualified health benefits plan
    shall comply with standards established by the Commissioner to ensure
    transparency to each health care provider relating to reimbursement
    arrangements between such plan and such provider.
        (c) Advance Notice of Plan Changes.--A change in a qualified health
    benefits plan shall not be made without such reasonable and timely
    advance notice to enrollees of such change.
        (d) Identification of Providers Trained and Accredited in
    Integrative Medicine.--A qualified health benefit plan shall include in
    the disclosure required under subsection (a) identification to
    enrollees of any providers of services under the plan that are trained
    and accredited in integrative health medicine.

    SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED
                  THROUGH THE HEALTH INSURANCE EXCHANGE.

        The requirements of the previous provisions of this subtitle shall
    apply to qualified health benefits plans that are not being offered
    through the Health Insurance Exchange only to the extent specified by
    the Commissioner.

    SEC. 135. TIMELY PAYMENT OF CLAIMS.

        A QHBP offering entity shall comply with the requirements of
    section 1857(f) of the Social Security Act with respect to a qualified
    health benefits plan it offers in the same manner an Medicare Advantage
    organization is required to comply with such requirements with respect
    to a Medicare Advantage plan it offers under part C of Medicare.

    SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF
                  BENEFITS.

        The Commissioner shall establish standards for the coordination and
    subrogation of benefits and reimbursement of payments in cases
    involving individuals and multiple plan coverage.

    SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.

        A QHBP offering entity is required to comply with standards for
    electronic financial and administrative transactions under section
    1173A of the Social Security Act, added by section 163(a).

    SEC. 138. RECORDS RELATIVE TO PRESCRIPTION INFORMATION.

        (a) In General.--A qualified health benefits plan shall ensure that
    its records relative to prescription information containing patient
    identifiable and prescriber-identifiable data are maintained in
    accordance with this section.''
        (b) Requirements.--
                (1) In general.--Records described in subsection (a) may
            not be licensed, transferred, used, or sold by any pharmacy
            benefits manager, insurance company, electronic transmission
            intermediary, retail, mail order, or Internet pharmacy or other
            similar entity, for any commercial purpose, except for the
            limited purposes of--
                        (A) pharmacy reimbursement;
                        (B) formulary compliance;
                        (C) care management;
                        (D) utilization review by a health care provider,
                    the patient's insurance provider or the agent of
                    either;
                        (E) health care research; or
                        (F) as otherwise provided by law.
                (2) Commercial purpose.--For purposes of paragraph (1), the
            term ``commercial purpose'' includes, but is not limited to,
            advertising, marketing, promotion, or any activity that could
            be used to influence sales or market share of a pharmaceutical
            product, influence or evaluate the prescribing behavior of an
            individual health care professional, or evaluate the
            effectiveness of a professional pharmaceutical detailing sales
            force.
        (c) Construction.--
                (1) Permitted practices.--Nothing in this section shall
            prohibit--
                        (A) the dispensing of prescription medications to a
                    patient or to the patient's authorized representative;
                        (B) the transmission of prescription information
                    between an authorized prescriber and a licensed
                    pharmacy;
                        (C) the transfer of prescription information
                    between licensed pharmacies;
                        (D) the transfer of prescription records that may
                    occur in the event a pharmacy ownership is changed or
                    transferred;
                        (E) care management educational communications
                    provided to a patient about the patient's health
                    condition, adherence to a prescribed course of therapy,
                    or other information about the drug being dispensed,
                    treatment options, or clinical trials.
                (2) De-identified data.--Nothing in this section shall
            prohibit the collection, use, transfer, or sale of patient and
            prescriber de-identified data by zip code, geographic region,
            or medical specialty for commercial purposes.

                             Subtitle E--Governance

    SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.

        (a) In General.--There is hereby established, as an independent
    agency in the executive branch of the Government, a Health Choices
    Administration (in this subdivision referred to as the
    ``Administration'').
        (b) Commissioner.--
                (1) In general.--The Administration shall be headed by a
            Health Choices Commissioner (in this subdivision referred to as
            the ``Commissioner'') who shall be appointed by the President,
            by and with the advice and consent of the Senate.
                (2) Compensation; etc.--The provisions of paragraphs (2),
            (5) and (7) of subsection (a) (relating to compensation, terms,
            general powers, rulemaking, and delegation) of section 702 of
            the Social Security Act (42 U.S.C. 902) shall apply to the
            Commissioner and the Administration in the same manner as such
            provisions apply to the Commissioner of Social Security and the
            Social Security Administration.

    SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.

        (a) Duties.--The Commissioner is responsible for carrying out the
    following functions under this subdivision:
                (1) Qualified plan standards.--The establishment of
            qualified health benefits plan standards under this title,
            including the enforcement of such standards in coordination
            with State insurance regulators and the Secretaries of Labor
            and the Treasury.
                (2) Health insurance exchange.--The establishment and
            operation of a Health Insurance Exchange under subtitle A of
            title II.
                (3) Individual affordability credits.--The administration
            of individual affordability credits under subtitle C of title
            II, including determination of eligibility for such credits.
                (4) Additional functions.--Such additional functions as may
            be specified in this subdivision.
        (b) Promoting Accountability.--
                (1) In general.--The Commissioner shall undertake
            activities in accordance with this subtitle to promote
            accountability of QHBP offering entities in meeting Federal
            health insurance requirements, regardless of whether such
            accountability is with respect to qualified health benefits
            plans offered through the Health Insurance Exchange or outside
            of such Exchange.
                (2) Compliance examination and audits.--
                        (A) In general.--The commissioner shall, in
                    coordination with States, conduct audits of qualified
                    health benefits plan compliance with Federal
                    requirements.   Such audits may include random
                    compliance audits and targeted audits in response to
                    complaints or other suspected non-compliance.
                        (B) Recoupment of costs in connection with
                    examination and audits.--The Commissioner is authorized
                    to recoup from qualified health benefits plans
                    reimbursement for the costs of such examinations and
                    audit of such QHBP offering entities.
        (c) Data Collection.--The Commissioner shall collect data for
    purposes of carrying out the Commissioner's duties, including for
    purposes of promoting quality and value, protecting consumers, and
    addressing disparities in health and health care and may share such
    data with the Secretary of Health and Human Services.
        (d) Sanctions Authority.--
                (1) In general.--In the case that the Commissioner
            determines that a QHBP offering entity violates a requirement
            of this title, the Commissioner may, in coordination with State
            insurance regulators and the Secretary of Labor, provide, in
            addition to any other remedies authorized by law, for any of
            the remedies described in paragraph (2).
                (2) Remedies.--The remedies described in this paragraph,
            with respect to a qualified health benefits plan offered by a
            QHBP offering entity, are--
                        (A) civil money penalties of not more than the
                    amount that would be applicable under similar
                    circumstances for similar violations under section
                    1857(g) of the Social Security Act;
                        (B) suspension of enrollment of individuals under
                    such plan after the date the Commissioner notifies the
                    entity of a determination under paragraph (1) and until
                    the Commissioner is satisfied that the basis for such
                    determination has been corrected and is not likely to
                    recur;
                        (C) in the case of an Exchange-participating health
                    benefits plan, suspension of payment to the entity
                    under the Health Insurance Exchange for individuals
                    enrolled in such plan after the date the Commissioner
                    notifies the entity of a determination under paragraph
                    (1) and until the Secretary is satisfied that the basis
                    for such determination has been corrected and is not
                    likely to recur; or
                        (D) working with State insurance regulators to
                    terminate plans for repeated failure by the offering
                    entity to meet the requirements of this title.
        (e) Standard Definitions of Insurance and Medical Terms.--The
    Commissioner shall provide for the development of standards for the
    definitions of terms used in health insurance coverage, including
    insurance-related terms.
        (f) Efficiency in Administration.--The Commissioner shall issue
    regulations for the effective and efficient administration of the
    Health Insurance Exchange and affordability credits under subtitle C,
    including, with respect to the determination of eligibility for
    affordability credits, the use of personnel who are employed in
    accordance with the requirements of title 5, United States Code, to
    carry out the duties of the Commissioner or, in the case of sections
    208 and 241(b)(2), the use of State personnel who are employed in
    accordance with standards prescribed by the Office of Personnel
    Management pursuant to section 208 of the Intergovernmental Personnel
    Act of 1970 (42 U.S.C. 4728).

    SEC. 143. CONSULTATION AND COORDINATION.

        (a) Consultation.--In carrying out the Commissioner's duties under
    this subdivision, the Commissioner, as appropriate, shall consult with
    at least with the following:
                (1) The National Association of Insurance Commissioners,
            State attorneys general, and State insurance regulators,
            including concerning the standards for insured qualified health
            benefits plans under this title and enforcement of such
            standards.
                (2) Appropriate State agencies, specifically concerning the
            administration of individual affordability credits under
            subtitle C of title II and the offering of Exchange-
            participating health benefits plans, to Medicaid eligible
            individuals under subtitle A of such title.
                (3) Other appropriate Federal agencies.
                (4) Indian tribes and tribal organizations.
                (5) The National Association of Insurance Commissioners for
            purposes of using model guidelines established by such
            association for purposes of subtitles B and D.
        (b) Coordination.--
                (1) In general.--In carrying out the functions of the
            Commissioner, including with respect to the enforcement of the
            provisions of this subdivision, the Commissioner shall work in
            coordination with existing Federal and State entities to the
            maximum extent feasible consistent with this subdivision and in
            a manner that prevents conflicts of interest in duties and
            ensures effective enforcement.
                (2) Uniform standards.--The Commissioner, in coordination
            with such entities, shall seek to achieve uniform standards
            that adequately protect consumers in a manner that does not
            unreasonably affect employers and insurers.

    SEC. 144. HEALTH INSURANCE OMBUDSMAN.

        (a) In General.--The Commissioner shall appoint within the Health
    Choices Administration a Qualified Health Benefits Plan Ombudsman who
    shall have expertise and experience in the fields of health care and
    education of (and assistance to) individuals.
        (b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in
    a linguistically appropriate manner--
                (1) receive complaints, grievances, and requests for
            information submitted by individuals;
                (2) provide assistance with respect to complaints,
            grievances, and requests referred to in paragraph (1),
            including--
                        (A) helping individuals determine the relevant
                    information needed to seek an appeal of a decision or
                    determination;
                        (B) assistance to such individuals with any
                    problems arising from disenrollment from such a plan;
                        (C) assistance to such individuals in choosing a
                    qualified health benefits plan in which to enroll; and
                        (D) assistance to such individuals in presenting
                    information under subtitle C (relating to affordability
                    credits);
                (3) consult with educated patients and consumer advocates
            (described in section 123(a)(5)); and
                (4) submit annual reports to Congress and the Commissioner
            that describe the activities of the Ombudsman and that include
            such recommendations for improvement in the administration of
            this subdivision as the Ombudsman determines appropriate. The
            Ombudsman shall not serve as an advocate for any increases in
            payments or new coverage of services, but may identify issues
            and problems in payment or coverage policies.

           Subtitle F--Relation to Other Requirements; Miscellaneous

    SEC. 151. RELATION TO OTHER REQUIREMENTS.

        (a) Coverage Not Offered Through Exchange.--
                (1) In general.--In the case of health insurance coverage
            not offered through the Health Insurance Exchange (whether or
            not offered in connection with an employment-based health
            plan), and in the case of employment-based health plans, the
            requirements of this title do not supercede any requirements
            applicable under titles XXII and XXVII of the Public Health
            Service Act, parts 6 and 7 of subtitle B of title I of the
            Employee Retirement Income Security Act of 1974, or State law,
            except insofar as such requirements prevent the application of
            a requirement of this subdivision, as determined by the
            Commissioner.
                (2) Construction.--Nothing in paragraph (1) shall be
            construed as affecting the application of section 514 of the
            Employee Retirement Income Security Act of 1974.
        (b) Coverage Offered Through Exchange.--
                (1) In general.--In the case of health insurance coverage
            offered through the Health Insurance Exchange--
                        (A) the requirements of this title do not supercede
                    any requirements (including requirements relating to
                    genetic information nondiscrimination and mental
                    health) applicable under title XXVII of the Public
                    Health Service Act or under State law, except insofar
                    as such requirements prevent the application of a
                    requirement of this subdivision, as determined by the
                    Commissioner; and
                        (B) individual rights and remedies under State laws
                    shall apply.
                (2) Construction.--In the case of coverage described in
            paragraph (1), nothing in such paragraph shall be construed as
            preventing the application of rights and remedies under State
            laws with respect to any requirement referred to in paragraph
            (1)(A).

    SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.

        (a) In General.--Except as otherwise explicitly permitted by this
    division and by subsequent regulations consistent with this division,
    all health care and related services (including insurance coverage and
    public health activities) covered by this division shall be provided
    without regard to personal characteristics extraneous to the provision
    of high quality health care or related services.
        (b) Implementation.--To implement the requirement set forth in
    subsection (a), the Secretary of Health and Human Services shall, not
    later than 18 months after the date of the enactment of this Act,
    promulgate such regulations as are necessary or appropriate to insure
    that all health care and related services (including insurance coverage
    and public health activities) covered by this division are provided
    (whether directly or through contractual, licensing, or other
    arrangements) without regard to personal characteristics extraneous to
    the provision of high quality health care or related services.

    SEC. 153. WHISTLEBLOWER PROTECTION.

        (a) Retaliation Prohibited.--No employer may discharge any employee
    or otherwise discriminate against any employee with respect to his
    compensation, terms, conditions, or other privileges of employment
    because the employee (or any person acting pursuant to a request of the
    employee)--
                (1) provided, caused to be provided, or is about to provide
            or cause to be provided to the employer, the Federal
            Government, or the attorney general of a State information
            relating to any violation of, or any act or omission the
            employee reasonably believes to be a violation of any provision
            of this division or any order, rule, or regulation promulgated
            under this division;
                (2) testified or is about to testify in a proceeding
            concerning such violation;
                (3) assisted or participated or is about to assist or
            participate in such a proceeding; or
                (4) objected to, or refused to participate in, any
            activity, policy, practice, or assigned task that the employee
            (or other such person) reasonably believed to be in violation
            of any provision of this division or any order, rule, or
            regulation promulgated under this division.
        (b) Enforcement Action.--An employee covered by this section who
    alleges discrimination by an employer in violation of subsection (a)
    may bring an action governed by the rules, procedures, legal burdens of
    proof, and remedies set forth in section 40(b) of the Consumer Product
    Safety Act (15 U.S.C. 2087(b)).
        (c) Employer Defined.--As used in this section, the term
    ``employer'' means any person (including one or more individuals,
    partnerships, associations, corporations, trusts, professional
    membership organization including a certification, disciplinary, or
    other professional body, unincorporated organizations, nongovernmental
    organizations, or trustees) engaged in profit or nonprofit business or
    industry whose activities are governed by this division, and any agent,
    contractor, subcontractor, grantee, or consultant of such person.
        (d) Rule of Construction.--The rule of construction set forth in
    section 20109(h) of title 49, United States Code, shall also apply to
    this section.

    SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

        Nothing in this subdivision shall be construed to alter or
    supercede any statutory or other obligation to engage in collective
    bargaining over the terms and conditions of employment related to
    health care.

    SEC. 155. SEVERABILITY.

        If any provision of this division, or any application of such
    provision to any person or circumstance, is held to be
    unconstitutional, the remainder of the provisions of this division and
    the application of the provision to any other person or circumstance
    shall not be affected.

    SEC. 156. RULE OF CONSTRUCTION REGARDING HAWAII PREPAID HEALTH CARE
                  ACT.

        (a) In General.--Subject to this section--
                (1) nothing in this subdivision (or an amendment made by
            this subdivision) shall be construed to modify or limit the
            application of the exemption for the Hawaii Prepaid Health Care
            Act (Haw. Rev. Stat. Sec. Sec.  393-1 et seq.) as provided for
            under section 514(b)(5) of the Employee Retirement Income
            Security Act of 1974 (29 U.S.C. 1144(b)(5)), and such exemption
            shall also apply with respect to the provisions of this
            subdivision, and
                (2) for purposes of this subdivision (and the amendments
            made by this subdivision), coverage provided pursuant to the
            Hawaii Prepaid Health Care Act shall be treated as a qualified
            health benefits plan providing acceptable coverage so long as
            the Secretary of Labor determines that such coverage for
            employees (taking into account the benefits and the cost to
            employees for such benefits) is substantially equivalent to or
            greater than the coverage provided for employees pursuant to
            the essential benefits package.
        (b) Coordination With State Law of Hawaii.--The Commissioner shall,
    based on ongoing consultation with the appropriate officials of the
    State of Hawaii, make adjustments to rules and regulations of the
    Commissioner under this subdivision as may be necessary, as determined
    by the Commissioner, to most effectively coordinate the provisions of
    this subdivision with the provisions of the Hawaii Prepaid Health Care
    Act, taking into account any changes made from time to time to the
    Hawaii Prepaid Health Care Act and related laws of such State.

    SEC. 157. INCREASING MEANINGFUL USE OF ELECTRONIC HEALTH RECORDS.

        (a) Study.--The Commissioner shall conduct a study on methods that
    QHBP offering entities can use to encourage increased meaningful use of
    electronic health records by health care providers, including--
                (1) qualified health benefits plans offering higher
            reimbursement rates for such meaningful use; and
                (2) promoting the use by health care providers of low-cost
            available electronic health record software packages, such as
            software made available to health care providers by the
            Veterans Administration.
        (b) Report.--Not later than 2 years after the date of the enactment
    of this Act, the Commissioner shall submit to the Congress a report
    containing--
                (1) the results of the study under subsection (a); and
                (2) recommendations concerning whether qualified health
            benefits plans should increase reimbursement rates to health
            care providers to increase meaningful use of electronic health
            records by such providers.
        (c) Requirements.--
                (1) In general.--Not later than one year after the date the
            report is submitted to the Congress under subsection (b), if,
            under subsection (b)(2), the Commissioner recommends increased
            reimbursement rates, the Commissioner shall require that
            qualified health benefits plans increase reimbursement rates
            for health care providers that show meaningful use of
            electronic health records.
                (2) Cost limitation.--An increase in rates under paragraph
            (1) shall not result in any increase in affordability premium
            or cost-sharing credits under subtitle C of title II of this
            subdivision.

    SEC. 158. PRIVATE RIGHT OF CONTRACT WITH HEALTH CARE PROVIDERS.

        Nothing in this division shall be construed to preclude any
    participant or beneficiary in a group health plan from entering into
    any contract or arrangement for health care with any health care
    provider.

                         Subtitle G--Early Investments

    SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

        (a) Group Health Insurance Coverage.--Title XXVII of the Public
    Health Service Act is amended by inserting after section 2713 the
    following new section:

    ``SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

        ``(a) In General.--Each health insurance issuer that offers health
    insurance coverage in the small or large group market shall provide
    that for any plan year in which the coverage has a medical loss ratio
    below a level specified by the Secretary, the issuer shall provide in a
    manner specified by the Secretary for rebates to enrollees of payment
    sufficient to meet such loss ratio. Such methodology shall be set at
    the highest level medical loss ratio possible that is designed to
    ensure adequate participation by issuers, competition in the health
    insurance market, and value for consumers so that their premiums are
    used for services.
        ``(b) Uniform Definitions.--The Secretary shall establish a uniform
    definition of medical loss ratio and methodology for determining how to
    calculate the medical loss ratio. Such methodology shall be designed to
    take into account the special circumstances of smaller plans, different
    types of plans, and newer plans.''.
        (b) Individual Health Insurance Coverage.--Such title is further
    amended by inserting after section 2753 the following new section:

    ``SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

        ``The provisions of section 2714 shall apply to health insurance
    coverage offered in the individual market in the same manner as such
    provisions apply to health insurance coverage offered in the small or
    large group market.''.
        (c) Immediate Implementation.--The amendments made by this section
    shall apply in the group and individual market for plan years beginning
    on or after January 1, 2011.

    SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.

        (a) Clarification Regarding Application of Guaranteed Renewability
    of Individual Health Insurance Coverage.--Section 2742 of the Public
    Health Service Act (42 U.S.C. 300gg-42) is amended--
                (1) in its heading, by inserting ``and continuation in
            force, including prohibition of rescission,'' after
            ``guaranteed renewability''; and
                (2) in subsection (a), by inserting ``, including without
            rescission,'' after ``continue in force''.
        (b) Secretarial Guidance Regarding Rescissions.--Section 2742 of
    such Act (42 U.S.C. 300gg-42) is amended by adding at the end the
    following:
        ``(f) Rescission.--A health insurance issuer may rescind health
    insurance coverage only upon clear and convincing evidence of fraud
    described in subsection (b)(2). The Secretary, no later than July 1,
    2010, shall issue guidance implementing this requirement, including
    procedures for independent, external third party review.''.
        (c) Opportunity for Independent, External Third Party Review in
    Certain Cases.--Subpart 1 of part B of title XXVII of such Act (42
    U.S.C. 300gg-41 et seq.) is amended by adding at the end the following:

    ``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW
                  IN CASES OF RESCISSION.

        ``(a) Notice and Review Right.--If a health insurance issuer
    determines to rescind health insurance coverage for an individual in
    the individual market, before such rescission may take effect the
    issuer shall provide the individual with notice of such proposed
    rescission and an opportunity for a review of such determination by an
    independent, external third party under procedures specified by the
    Secretary under section 2742(f).
        ``(b) Independent Determination.--If the individual requests such
    review by an independent, external third party of a rescission of
    health insurance coverage, the coverage shall remain in effect until
    such third party determines that the coverage may be rescinded under
    the guidance issued by the Secretary under section 2742(f).''.
        (d) Effective Date.--The amendments made by this section shall
    apply on and after October 1, 2010, with respect to health insurance
    coverage issued before, on, or after such date.

    SEC. 163. ADMINISTRATIVE SIMPLIFICATION.

        (a) Standardizing Electronic Administrative Transactions.--
                (1) In general.--Part C of title XI of the Social Security
            Act (42 U.S.C. 1320d et seq.) is amended by inserting after
            section 1173 the following new section:

    ``SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

        ``(a) Standards for Financial and Administrative Transactions.--
                ``(1) In general.--The Secretary shall adopt and regularly
            update standards consistent with the goals described in
            paragraph (2).
                ``(2) Goals for financial and administrative
            transactions.--The goals for standards under paragraph (1) are
            that such standards shall--
                        ``(A) be unique with no conflicting or redundant
                    standards;
                        ``(B) be authoritative, permitting no additions or
                    constraints for electronic transactions, including
                    companion guides;
                        ``(C) be comprehensive, efficient and robust,
                    requiring minimal augmentation by paper transactions or
                    clarification by further communications;
                        ``(D) enable the real-time (or near real-time)
                    determination of an individual's financial
                    responsibility at the point of service and, to the
                    extent possible, prior to service, including whether
                    the individual is eligible for a specific service with
                    a specific physician at a specific facility, which may
                    include utilization of a machine-readable health plan
                    beneficiary identification card;
                        ``(E) enable, where feasible, near real-time
                    adjudication of claims;
                        ``(F) provide for timely acknowledgment, response,
                    and status reporting applicable to any electronic
                    transaction deemed appropriate by the Secretary;
                        ``(G) describe all data elements (such as reason
                    and remark codes) in unambiguous terms, not permit
                    optional fields, require that data elements be either
                    required or conditioned upon set values in other
                    fields, and prohibit additional conditions; and
                        ``(H) harmonize all common data elements across
                    administrative and clinical transaction standards.
                ``(3) Time for adoption.--Not later than 2 years after the
            date of implementation of the X12 Version 5010 transaction
            standards implemented under this part, the Secretary shall
            adopt standards under this section.
                ``(4) Requirements for specific standards.--The standards
            under this section shall be developed, adopted and enforced so
            as to--
                        ``(A) clarify, refine, complete, and expand, as
                    needed, the standards required under section 1173;
                        ``(B) require paper versions of standardized
                    transactions to comply with the same standards as to
                    data content such that a fully compliant, equivalent
                    electronic transaction can be populated from the data
                    from a paper version;
                        ``(C) enable electronic funds transfers, in order
                    to allow automated reconciliation with the related
                    health care payment and remittance advice;
                        ``(D) require timely and transparent claim and
                    denial management processes, including tracking,
                    adjudication, and appeal processing;
                        ``(E) require the use of a standard electronic
                    transaction with which health care providers may
                    quickly and efficiently enroll with a health plan to
                    conduct the other electronic transactions provided for
                    in this part; and
                        ``(F) provide for other requirements relating to
                    administrative simplification as identified by the
                    Secretary, in consultation with stakeholders.
                ``(5) Building on existing standards.--In developing the
            standards under this section, the Secretary shall build upon
            existing and planned standards.
                ``(6) Implementation and enforcement.--Not later than 6
            months after the date of the enactment of this section, the
            Secretary shall submit to the appropriate committees of
            Congress a plan for the implementation and enforcement, by not
            later than 5 years after such date of enactment, of the
            standards under this section. Such plan shall include--
                        ``(A) a process and timeframe with milestones for
                    developing the complete set of standards;
                        ``(B) an expedited upgrade program for continually
                    developing and approving additions and modifications to
                    the standards as often as annually to improve their
                    quality and extend their functionality to meet evolving
                    requirements in health care;
                        ``(C) programs to provide incentives for, and ease
                    the burden of, implementation for certain health care
                    providers, with special consideration given to such
                    providers serving rural or underserved areas and ensure
                    coordination with standards, implementation
                    specifications, and certification criteria being
                    adopted under the HITECH Act;
                        ``(D) programs to provide incentives for, and ease
                    the burden of, health care providers who volunteer to
                    participate in the process of setting standards for
                    electronic transactions;
                        ``(E) an estimate of total funds needed to ensure
                    timely completion of the implementation plan; and
                        ``(F) an enforcement process that includes timely
                    investigation of complaints, random audits to ensure
                    compliance, civil monetary and programmatic penalties
                    for non-compliance consistent with existing laws and
                    regulations, and a fair and reasonable appeals process
                    building off of enforcement provisions under this part.
        ``(b) Limitations on Use of Data.--Nothing in this section shall be
    construed to permit the use of information collected under this section
    in a manner that would adversely affect any individual.
        ``(c) Protection of Data.--The Secretary shall ensure (through the
    promulgation of regulations or otherwise) that all data collected
    pursuant to subsection (a) are--
                ``(1) used and disclosed in a manner that meets the HIPAA
            privacy and security law (as defined in section 3009(a)(2) of
            the Public Health Service Act), including any privacy or
            security standard adopted under section 3004 of such Act; and
                ``(2) protected from all inappropriate internal use by any
            entity that collects, stores, or receives the data, including
            use of such data in determinations of eligibility (or continued
            eligibility) in health plans, and from other inappropriate
            uses, as defined by the Secretary.''.
                (2) Definitions.--Section 1171 of such Act (42 U.S.C.
            1320d) is amended--
                        (A) in paragraph (7), by striking ``with reference
                    to'' and all that follows and inserting ``with
                    reference to a transaction or data element of health
                    information in section 1173 means implementation
                    specifications, certification criteria, operating
                    rules, messaging formats, codes, and code sets adopted
                    or established by the Secretary for the electronic
                    exchange and use of information''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(9) Operating rules.--The term `operating rules' means
            business rules for using and processing transactions. Operating
            rules should address the following:
                        ``(A) Requirements for data content using available
                    and established national standards.
                        ``(B) Infrastructure requirements that establish
                    best practices for streamlining data flow to yield
                    timely execution of transactions.
                        ``(C) Policies defining the transaction related
                    rights and responsibilities for entities that are
                    transmitting or receiving data.''.
                (3) Conforming amendment.--Section 1179(a) of such Act (42
            U.S.C. 1320d-8(a)) is amended, in the matter before paragraph
            (1)--
                        (A) by inserting ``on behalf of an individual''
                    after ``1978)''; and
                        (B) by inserting ``on behalf of an individual''
                    after ``for a financial institution.''
        (b) Standards for Claims Attachments and Coordination of Benefits
    .--
                (1) Standard for health claims attachments.--Not later than
            1 year after the date of the enactment of this Act, the
            Secretary of Health and Human Services shall promulgate a final
            rule to establish a standard for health claims attachment
            transaction described in section 1173(a)(2)(B) of the Social
            Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of
            benefits.
                (2) Revision in processing payment transactions by
            financial institutions.--
                        (A) In general.--Section 1179 of the Social
                    Security Act (42 U.S.C. 1320d-8) is amended, in the
                    matter before paragraph (1)--
                                (i) by striking ``or is engaged'' and
                            inserting ``and is engaged''; and
                                (ii) by inserting ``(other than as a
                            business associate for a covered entity)''
                            after ``for a financial institution''.
                        (B) Effective date.--The amendments made by
                    paragraph (1) shall apply to transactions occurring on
                    or after such date (not later than 6 months after the
                    date of the enactment of this Act) as the Secretary of
                    Health and Human Services shall specify.

    SEC. 164. REINSURANCE PROGRAM FOR RETIREES.

        (a) Establishment.--
                (1) In general.--Not later than 90 days after the date of
            the enactment of this Act, the Secretary of Health and Human
            Services shall establish a temporary reinsurance program (in
            this section referred to as the ``reinsurance program'') to
            provide reimbursement to assist participating employment-based
            plans with the cost of providing health benefits to retirees
            and to eligible spouses, surviving spouses and dependents of
            such retirees.
                (2) Definitions.--For purposes of this section:
                        (A) The term ``eligible employment-based plan''
                    means a group health benefits plan that--
                                (i) is maintained by one or more employers,
                            former employers or employee associations, or a
                            voluntary employees' beneficiary association,
                            or a committee or board of individuals
                            appointed to administer such plan, and
                                (ii) provides health benefits to retirees.
                        (B) The term ``health benefits'' means medical,
                    surgical, hospital, prescription drug, and such other
                    benefits as shall be determined by the Secretary,
                    whether self-funded or delivered through the purchase
                    of insurance or otherwise.
                        (C) The term ``participating employment-based
                    plan'' means an eligible employment-based plan that is
                    participating in the reinsurance program.
                        (D) The term ``retiree'' means, with respect to a
                    participating employment-benefit plan, an individual
                    who--
                                (i) is 55 years of age or older;
                                (ii) is not eligible for coverage under
                            title XVIII of the Social Security Act; and
                                (iii) is not an active employee of an
                            employer maintaining the plan or of any
                            employer that makes or has made substantial
                            contributions to fund such plan.
                        (E) The term ``Secretary'' means Secretary of
                    Health and Human Services.
        (b) Participation.--To be eligible to participate in the
    reinsurance program, an eligible employment-based plan shall submit to
    the Secretary an application for participation in the program, at such
    time, in such manner, and containing such information as the Secretary
    shall require.
        (c) Payment.--
                (1) Submission of claims.--
                        (A) In general.--Under the reinsurance program, a
                    participating employment-based plan shall submit claims
                    for reimbursement to the Secretary which shall contain
                    documentation of the actual costs of the items and
                    services for which each claim is being submitted.
                        (B) Basis for claims.--Each claim submitted under
                    subparagraph (A) shall be based on the actual amount
                    expended by the participating employment-based plan
                    involved within the plan year for the appropriate
                    employment based health benefits provided to a retiree
                    or to the spouse, surviving spouse, or dependent of a
                    retiree. In determining the amount of any claim for
                    purposes of this subsection, the participating
                    employment-based plan shall take into account any
                    negotiated price concessions (such as discounts, direct
                    or indirect subsidies, rebates, and direct or indirect
                    remunerations) obtained by such plan with respect to
                    such health benefits. For purposes of calculating the
                    amount of any claim, the costs paid by the retiree or
                    by the spouse, surviving spouse, or dependent of the
                    retiree in the form of deductibles, co-payments, and
                    co-insurance shall be included along with the amounts
                    paid by the participating employment-based plan.
                (2) Program payments and limit.--If the Secretary
            determines that a participating employment-based plan has
            submitted a valid claim under paragraph (1), the Secretary
            shall reimburse such plan for 80 percent of that portion of the
            costs attributable to such claim that exceeds $15,000, but is
            less than $90,000. Such amounts shall be adjusted each year
            based on the percentage increase in the medical care component
            of the Consumer Price Index (rounded to the nearest multiple of
            $1,000) for the year involved.
                (3) Use of payments.--Amounts paid to a participating
            employment-based plan under this subsection shall be used to
            lower the costs borne directly by the participants and
            beneficiaries for health benefits provided under such plan in
            the form of premiums, co-payments, deductibles, co-insurance,
            or other out-of-pocket costs. Such payments shall not be used
            to reduce the costs of an employer maintaining the
            participating employment-based plan. The Secretary shall
            develop a mechanism to monitor the appropriate use of such
            payments by such plans.
                (4) Appeals and program protections.--The Secretary shall
            establish--
                        (A) an appeals process to permit participating
                    employment-based plans to appeal a determination of the
                    Secretary with respect to claims submitted under this
                    section; and
                        (B) procedures to protect against fraud, waste, and
                    abuse under the program.
                (5) Audits.--The Secretary shall conduct annual audits of
            claims data submitted by participating employment-based plans
            under this section to ensure that they are in compliance with
            the requirements of this section.
        (d) Retiree Reserve Trust Fund.--
                (1) Establishment.--
                        (A) In general.--There is established in the
                    Treasury of the United States a trust fund to be known
                    as the ``Retiree Reserve Trust Fund'' (referred to in
                    this section as the ``Trust Fund''), that shall consist
                    of such amounts as may be appropriated or credited to
                    the Trust Fund as provided for in this subsection to
                    enable the Secretary to carry out the reinsurance
                    program. Such amounts shall remain available until
                    expended.
                        (B) Funding.--There are hereby appropriated to the
                    Trust Fund, out of any moneys in the Treasury not
                    otherwise appropriated, an amount requested by the
                    Secretary as necessary to carry out this section,
                    except that the total of all such amounts requested
                    shall not exceed $10,000,000,000.
                        (C) Appropriations from the trust fund.--
                                (i) In general.--Amounts in the Trust Fund
                            are appropriated to provide funding to carry
                            out the reinsurance program and shall be used
                            to carry out such program.
                                (ii) Budgetary implications.--Amounts
                            appropriated under clause (i), and outlays
                            flowing from such appropriations, shall not be
                            taken into account for purposes of any budget
                            enforcement procedures including allocations
                            under section 302(a) and (b) of the Balanced
                            Budget and Emergency Deficit Control Act and
                            budget resolutions for fiscal years during
                            which appropriations are made from the Trust
                            Fund.
                                (iii) Limitation to available funds.--The
                            Secretary has the authority to stop taking
                            applications for participation in the program
                            or take such other steps in reducing
                            expenditures under the reinsurance program in
                            order to ensure that expenditures under the
                            reinsurance program do not exceed the funds
                            available under this subsection.

    SEC. 165. PROHIBITION AGAINST POST-RETIREMENT REDUCTIONS OF RETIREE
                  HEALTH BENEFITS BY GROUP HEALTH PLANS.

        (a) In General.--Part 7 of subtitle B of title I of the Employee
    Retirement Income Security Act of 1974 is amended by inserting after
    section 714 the following new section:

    ``SEC. 715. PROTECTION AGAINST POST-RETIREMENT REDUCTION OF RETIREE
                  HEALTH BENEFITS.

        ``(a) In General.--Every group health plan shall contain a
    provision which expressly bars the plan, or any fiduciary of the plan,
    from reducing the benefits provided under the plan to a retired
    participant, or beneficiary of such participant, if such reduction
    affects the benefits provided to the participant or beneficiary as of
    the date the participant retired for purposes of the plan and such
    reduction occurs after the participant's retirement unless such
    reduction is also made with respect to active participants.
        ``(b) No Reduction.--Notwithstanding that a group health plan
    described in subsection (a) may contain a provision reserving the
    general power to amend or terminate the plan or a provision
    specifically authorizing the plan to make post-retirement reductions in
    retiree health benefits, it shall be prohibited for any group health
    plan, whether through amendment or otherwise, to reduce the benefits
    provided to a retired participant or his or her beneficiary under the
    terms of the plan if such reduction of benefits occurs after the date
    the participant retired for purposes of the plan and reduces benefits
    that were provided to the participant, or his or her beneficiary, as of
    the date the participant retired unless such reduction is also made
    with respect to active participants.''.
        (b) Conforming Amendment.--The table of contents in section 1 of
    such Act is amended by inserting after the item relating to section 714
    the following new item:

    ``Sec. 715. Protection against post-retirement reduction of retiree
                                health benefits.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act.

    SEC. 166. LIMITATIONS ON PREEXISTING CONDITION EXCLUSIONS IN GROUP
                  HEALTH PLANS IN ADVANCE OF APPLICABILITY OF NEW
                  PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS.

        (a) Amendments to the Employee Retirement Income Security Act of
    1974.--
                (1) Reduction in look-back period.--Section 701(a)(1) of
            the Employee Retirement Income Security Act of 1974 (29 U.S.C.
            1181(a)(1)) is amended by striking ``6-month period'' and
            inserting ``30-day period''.
                (2) Reduction in permitted preexisting condition limitation
            period.--Section 701(a)(2) of such Act (29 U.S.C. 1181(a)(2))
            is amended by striking ``12 months'' and inserting ``3
            months'', and by striking ``18 months'' and inserting ``9
            months''.
                (3) Inapplicability of interim limitations upon
            applicability of total prohibition of exclusion.--Section 701
            of such Act shall cease to be effective in the case of any
            group health plan as of the date on which such plan becomes
            subject to the requirements of section 111 of this division
            (relating to prohibiting preexisting condition exclusions).
        (b) Effective Date.--
                (1) In general.--Except as provided in subparagraph (B),
            the amendments made by paragraphs (1) and (2) of subsection (a)
            shall apply with respect to group health plans for plan years
            beginning after the end of the 6th calendar month following the
            date of the enactment of this Act.
                (2) Special rule for collective bargaining agreements.--In
            the case of a group health plan maintained pursuant to one or
            more collective bargaining agreements between employee
            representatives and one or more employers ratified before the
            date of the enactment of this Act, the amendments made by
            paragraphs (1) and (2) of subsection (a) shall not apply to
            plan years beginning before the earlier of--
                        (A) the date on which the last of the collective
                    bargaining agreements relating to the plan terminates
                    (determined without regard to any extension thereof
                    agreed to after the date of the enactment of this Act),
                    or
                        (B) 3 years after the date of the enactment of this
                    Act.
            For purposes of subparagraph (A), any plan amendment made
            pursuant to a collective bargaining agreement relating to the
            plan which amends the plan solely to conform to any requirement
            added by the amendments made by paragraphs (1) and (2) of
            subsection (a) shall not be treated as a termination of such
            collective bargaining agreement.

    SEC. 167. EXTENSION OF COBRA CONTINUATION COVERAGE.

        (a) Extension of Current Periods of Continuation Coverage.--
                (1) In general.--In the case of any individual who is,
            under a COBRA continuation coverage provision, covered under
            COBRA continuation coverage on or after the date of the
            enactment of this Act, the required period of any such coverage
            which has not subsequently terminated under the terms of such
            provision for any reason other than the expiration of a period
            of a specified number of months shall, notwithstanding such
            provision and subject to subsection (b), extend to the earlier
            of the date on which such individual becomes eligible for
            coverage under an employment-based health plan or the date on
            which such individual becomes eligible for health insurance
            coverage through the Health Insurance Exchange (or a State-
            based Health Insurance Exchange operating in a State or group
            of States).
                (2) Notice.--As soon as practicable after the date of the
            enactment of this Act, the Secretary of Labor, in consultation
            with the Secretary of the Treasury and the Secretary of Health
            and Human Services, shall, in consultation with administrators
            of the group health plans (or other entities) that provide or
            administer the COBRA continuation coverage involved, provide
            rules setting forth the form and manner in which prompt notice
            to individuals of the continued availability of COBRA
            continuation coverage to such individuals under paragraph (1).
        (b) Continued Effect of Other Terminating Events.--Notwithstanding
    subsection (a), any required period of COBRA continuation coverage
    which is extended under such subsection shall terminate upon the
    occurrence, prior to the date of termination otherwise provided in such
    subsection, of any terminating event specified in the applicable
    continuation coverage provision other than the expiration of a period
    of a specified number of months.
        (c) Access to State Health Benefits Risk Pools.--This section shall
    supersede any provision of the law of a State or political subdivision
    thereof to the extent that such provision has the effect of limiting or
    precluding access by a qualified beneficiary whose COBRA continuation
    coverage has been extended under this section to a State health
    benefits risk pool recognized by the Commissioner for purposes of this
    section solely by reason of the extension of such coverage beyond the
    date on which such coverage otherwise would have expired.
        (d) Definitions.--For purposes of this section--
                (1) COBRA continuation coverage.--The term ``COBRA
            continuation coverage'' means continuation coverage provided
            pursuant to part 6 of subtitle B of title I of the Employee
            Retirement Income Security Act of 1974 (other than under
            section 609), title XXII of the Public Health Service Act,
            section 4980B of the Internal Revenue Code of 1986 (other than
            subsection (f)(1) of such section insofar as it relates to
            pediatric vaccines), or section 905a of title 5, United States
            Code, or under a State program that provides comparable
            continuation coverage. Such term does not include coverage
            under a health flexible spending arrangement under a cafeteria
            plan within the meaning of section 125 of the Internal Revenue
            Code of 1986.
                (2) COBRA continuation provision.--The term ``COBRA
            continuation provision'' means the provisions of law described
            in paragraph (1).

           TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                     Subtitle A--Health Insurance Exchange

    SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF
                  DUTIES; DEFINITIONS.

        (a) Establishment.--There is established within the Health Choices
    Administration and under the direction of the Commissioner a Health
    Insurance Exchange in order to facilitate access of individuals and
    employers, through a transparent process, to a variety of choices of
    affordable, quality health insurance coverage, including a public
    health insurance option.
        (b) Outline of Duties of Commissioner.--In accordance with this
    subtitle and in coordination with appropriate Federal and State
    officials as provided under section 143(b), the Commissioner shall--
                (1) under section 204 establish standards for, accept bids
            from, and negotiate and enter into contracts with, QHBP
            offering entities for the offering of health benefits plans
            through the Health Insurance Exchange, with different levels of
            benefits required under section 203, and including with respect
            to oversight and enforcement;
                (2) under section 205 facilitate outreach and enrollment in
            such plans of Exchange-eligible individuals and employers
            described in section 202; and
                (3) conduct such activities related to the Health Insurance
            Exchange as required, including establishment of a risk pooling
            mechanism under section 206 and consumer protections under
            subtitle D of title I.
        (c) Exchange-participating Health Benefits Plan Defined.--In this
    subdivision, the term ``Exchange-participating health benefits plan''
    means a qualified health benefits plan that is offered through the
    Health Insurance Exchange.

    SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

        (a) Access to Coverage.--In accordance with this section, all
    individuals are eligible to obtain coverage through enrollment in an
    Exchange-participating health benefits plan offered through the Health
    Insurance Exchange unless such individuals are enrolled in another
    qualified health benefits plan or other acceptable coverage.
        (b) Definitions.--In this subdivision:
                (1) Exchange-eligible individual.--The term ``Exchange-
            eligible individual'' means an individual who is eligible under
            this section to be enrolled through the Health Insurance
            Exchange in an Exchange-participating health benefits plan and,
            with respect to family coverage, includes dependents of such
            individual.
                (2) Exchange-eligible employer.--The term ``Exchange-
            eligible employer'' means an employer that is eligible under
            this section to enroll through the Health Insurance Exchange
            employees of the employer (and their dependents) in Exchange-
            eligible health benefits plans.
                (3) Employment-related definitions.--The terms
            ``employer'', ``employee'', ``full-time employee'', and ``part-
            time employee'' have the meanings given such terms by the
            Commissioner for purposes of this subdivision.
        (c) Transition.--Individuals and employers shall only be eligible
    to enroll or participate in the Health Insurance Exchange in accordance
    with the following transition schedule:
                (1) First year.--In Y1 (as defined in section 100(c))--
                        (A) individuals described in subsection (d)(1),
                    including individuals described in paragraphs (3), (4),
                    and (5) of subsection (d); and
                        (B) smallest employers described in subsection
                    (e)(1).
                (2) Second year.--In Y2--
                        (A) individuals and employers described in
                    paragraph (1); and
                        (B) smaller employers described in subsection
                    (e)(2).
                (3)  Third year.--In Y3--
                        (A) individuals and employers described in
                    paragraph (2);
                        (B) larger employers described in subsection
                    (e)(3); and
                        (C) largest employers as permitted by the
                    Commissioner under subsection (e)(4).
                (4) Fourth and subsequent years.--In Y4 and subsequent
            years--
                        (A) individuals and employers described in
                    paragraph (3); and
                        (B) largest employers as permitted by the
                    Commissioner under subsection (e)(4).
        (d) Individuals.--
                (1) Individual described.--Subject to the succeeding
            provisions of this subsection, an individual described in this
            paragraph is an individual who--
                        (A) is not enrolled in coverage described in
                    subparagraphs (C) through (F) of paragraph (2); and
                        (B) is not enrolled in coverage as a full-time
                    employee (or as a dependent of such an employee) under
                    a group health plan if the coverage and an employer
                    contribution under the plan meet the requirements of
                    section 312.
            For purposes of subparagraph (B), in the case of an individual
            who is self-employed, who has at least 1 employee, and who
            meets the requirements of section 312, such individual shall be
            deemed a full-time employee described in such subparagraph.
                (2) Acceptable coverage.--For purposes of this subdivision,
            the term ``acceptable coverage'' means any of the following:
                        (A) Qualified health benefits plan coverage.--
                    Coverage under a qualified health benefits plan.
                        (B) Grandfathered health insurance coverage;
                    coverage under current group health plan.--Coverage
                    under a grandfathered health insurance coverage (as
                    defined in subsection (a) of section 102) or under a
                    current group health plan (described in subsection (b)
                    of such section).
                        (C) Medicare.--Coverage under part A of title XVIII
                    of the Social Security Act.
                        (D) Medicaid.--Coverage for medical assistance
                    under title XIX of the Social Security Act, excluding
                    such coverage that is only available because of the
                    application of subsection (u), (z), or (aa) of section
                    1902 of such Act
                        (E) Members of the armed forces and dependents
                    (including tricare).--Coverage under chapter 55 of
                    title 10, United States Code, including similar
                    coverage furnished under section 1781 of title 38 of
                    such Code.
                        (F) VA.--Coverage under the veteran's health care
                    program under chapter 17 of title 38, United States
                    Code, but only if the coverage for the individual
                    involved is determined by the Commissioner in
                    coordination with the Secretary of Treasury to be not
                    less than a level specified by the Commissioner and
                    Secretary of Veteran's Affairs, in coordination with
                    the Secretary of Treasury, based on the individual's
                    priority for services as provided under section 1705(a)
                    of such title.
                        (G) Other coverage.--Such other health benefits
                    coverage, such as a State health benefits risk pool, as
                    the Commissioner, in coordination with the Secretary of
                    the Treasury, recognizes for purposes of this
                    paragraph.
            The Commissioner shall make determinations under this paragraph
            in coordination with the Secretary of the Treasury.
                (3) Treatment of certain non-traditional medicaid eligible
            individuals.--An individual who is a non-traditional Medicaid
            eligible individual (as defined in section 205(e)(4)(C)) in a
            State may be an Exchange-eligible individual if the individual
            was enrolled in a qualified health benefits plan, grandfathered
            health insurance coverage, or current group health plan during
            the 6 months before the individual became a non-traditional
            Medicaid eligible individual. During the period in which such
            an individual has chosen to enroll in an Exchange-participating
            health benefits plan, the individual is not also eligible for
            medical assistance under Medicaid.
                (4) Continuing eligibility permitted.--
                        (A) In general.--Except as provided in subparagraph
                    (B), once an individual qualifies as an Exchange-
                    eligible individual under this subsection (including as
                    an employee or dependent of an employee of an Exchange-
                    eligible employer) and enrolls under an Exchange-
                    participating health benefits plan through the Health
                    Insurance Exchange, the individual shall continue to be
                    treated as an Exchange-eligible individual until the
                    individual is no longer enrolled with an Exchange-
                    participating health benefits plan.
                        (B) Exceptions.--
                                (i) In general.--Subparagraph (A) shall not
                            apply to an individual once the individual
                            becomes eligible for coverage--
                                        (I) under part A of the Medicare
                                    program;
                                        (II) under the Medicaid program as
                                    a Medicaid eligible individual, except
                                    as permitted under paragraph (3) or
                                    clause (ii); or
                                        (III) in such other circumstances
                                    as the Commissioner may provide.
                                (ii) Transition period.--In the case
                            described in clause (i)(II), the Commissioner
                            shall permit the individual to continue
                            treatment under subparagraph (A) until such
                            limited time as the Commissioner determines it
                            is administratively feasible, consistent with
                            minimizing disruption in the individual's
                            access to health care.
                (5) Adversely affected retiree health benefits group
            participants and beneficiaries.--
                        (A) In general.--Beginning in Y1, an individual who
                    is a participant or beneficiary in an adversely
                    affected retiree health benefits group who does not
                    have coverage described in paragraph (2)(C) is an
                    Exchange eligible individual, whether or not such an
                    individual has other acceptable coverage.
                        (B) Adversely affected retiree health benefit group
                    defined.--In this paragraph, the term ``adversely
                    affected retiree health benefits group'' means the
                    retired participants and their beneficiaries of a group
                    health plan that cancelled or substantially reduced the
                    amount, type, level, or form of health benefit or
                    option provided prior January 1, 2008.
        (e) Employers.--
                (1)  Smallest employers.--Subject to paragraph (5),
            smallest employers described in this paragraph are employers
            with 15 or fewer employees.
                (2) Smaller employers.--Subject to paragraph (5), smaller
            employers described in this paragraph are employers that are
            not smallest employers described in paragraph (1) and that have
            25 or fewer employees.
                (3) Larger employers.--Subject to paragraph (5), larger
            employers described in this paragraph are employers that are
            not smallest employers described in paragraph (1) or smaller
            employers described in paragraph (2) and that have 50 or fewer
            employees.
                (4) Largest employers.--
                        (A) In general.--Beginning with Y3, the
                    Commissioner may permit employers not described in
                    paragraphs (1) (2), or (3) to be Exchange-eligible
                    employers.
                        (B) Phase-in.--In applying subparagraph (A), the
                    Commissioner may phase-in the application of such
                    subparagraph based on the number of full-time employees
                    of an employer and such other considerations as the
                    Commissioner deems appropriate.
                (5) Continuing eligibility.--Once an employer is permitted
            to be an Exchange-eligible employer under this subsection and
            enrolls employees through the Health Insurance Exchange, the
            employer shall continue to be treated as an Exchange-eligible
            employer for each subsequent plan year regardless of the number
            of employees involved unless and until the employer meets the
            requirement of section 311(a) through paragraph (1) of such
            section by offering a group health plan and not through
            offering Exchange-participating health benefits plan.
                (6) Employer participation and contributions.--
                        (A) Satisfaction of employer responsibility.--For
                    any year in which an employer is an Exchange-eligible
                    employer, such employer may meet the requirements of
                    section 312 with respect to employees of such employer
                    by offering such employees the option of enrolling with
                    Exchange-participating health benefits plans through
                    the Health Insurance Exchange consistent with the
                    provisions of subtitle B of title III.
                        (B) Employee choice.--Any employee offered
                    Exchange-participating health benefits plans by the
                    employer of such employee under subparagraph (A) may
                    choose coverage under any such plan. That choice
                    includes, with respect to family coverage, coverage of
                    the dependents of such employee.
                (7) Affiliated groups.--Any employer which is part of a
            group of employers who are treated as a single employer under
            subsection (b), (c), (m), or (o) of section 414 of the Internal
            Revenue Code of 1986 shall be treated, for purposes of this
            subtitle, as a single employer.
                (8) Other counting rules.--The Commissioner shall establish
            rules relating to how employees are counted for purposes of
            carrying out this subsection.
                (9) Treatment of multiemployer plans.--The plan sponsor of
            a group health plan (as defined in section 733(a) of the
            Employee Retirement Income Security Act of 1974) that is
            multiemployer plan (as defined in section 3(37) of such Act)
            may obtain health insurance coverage with respect to
            participants in the plan through the Exchange to the same
            extent as an employer not described in paragraph (1) or (2) is
            permitted by the Commissioner to obtain health insurance
            coverage through the Exchange as an Exchange-eligible employer
        (f) Special Situation Authority.--The Commissioner shall have the
    authority to establish such rules as may be necessary to deal with
    special situations with regard to uninsured individuals and employers
    participating as Exchange-eligible individuals and employers, such as
    transition periods for individuals and employers who gain, or lose,
    Exchange-eligible participation status, and to establish grace periods
    for premium payment.
        (g) Surveys of Individuals and Employers.--The Commissioner shall
    provide for periodic surveys of Exchange-eligible individuals and
    employers concerning satisfaction of such individuals and employers
    with the Health Insurance Exchange and Exchange-participating health
    benefits plans.
        (h) Exchange Access Study.--
                (1) In general.--The Commissioner shall conduct a study of
            access to the Health Insurance Exchange for individuals and for
            employers, including individuals and employers who are not
            eligible and enrolled in Exchange-participating health benefits
            plans. The goal of the study is to determine if there are
            significant groups and types of individuals and employers who
            are not Exchange eligible individuals or employers, but who
            would have improved benefits and affordability if made eligible
            for coverage in the Exchange.
                (2) Items included in study.--Such study also shall
            examine--
                        (A) the terms, conditions, and affordability of
                    group health coverage offered by employers and QHBP
                    offering entities outside of the Exchange compared to
                    Exchange-participating health benefits plans; and
                        (B) the affordability-test standard for access of
                    certain employed individuals to coverage in the Health
                    Insurance Exchange.
                (3) Report.--Not later than January 1 of Y3, in Y6, and
            thereafter, the Commissioner shall submit to Congress on the
            study conducted under this subsection and shall include in such
            report recommendations regarding changes in standards for
            Exchange eligibility for individuals and employers.

    SEC. 203. BENEFITS PACKAGE LEVELS.

        (a) In General.--The Commissioner shall specify the benefits to be
    made available under Exchange-participating health benefits plans
    during each plan year, consistent with subtitle C of title I and this
    section.
        (b) Limitation on Health Benefits Plans Offered by Offering
    Entities.--The Commissioner may not enter into a contract with a QHBP
    offering entity under section 204(c) for the offering of an Exchange-
    participating health benefits plan in a service area unless the
    following requirements are met:
                (1) Required offering of basic plan.--The entity offers
            only one basic plan for such service area.
                (2) Optional offering of enhanced plan.--If and only if the
            entity offers a basic plan for such service area, the entity
            may offer one enhanced plan for such area.
                (3) Optional offering of premium plan.--If and only if the
            entity offers an enhanced plan for such service area, the
            entity may offer one premium plan for such area.
                (4) Optional offering of premium-plus plans.--If and only
            if the entity offers a premium plan for such service area, the
            entity may offer one or more premium-plus plans for such area.
    All such plans may be offered under a single contract with the
    Commissioner.
        (c) Specification of Benefit Levels for Plans.--
                (1) In general.--The Commissioner shall establish the
            following standards consistent with this subsection and title
            I:
                        (A) Basic, enhanced, and premium plans.--Standards
                    for 3 levels of Exchange-participating health benefits
                    plans: basic, enhanced, and premium (in this
                    subdivision referred to as a ``basic plan'', ``enhanced
                    plan'', and ``premium plan'', respectively).
                        (B) Premium-plus plan benefits.--Standards for
                    additional benefits that may be offered, consistent
                    with this subsection and subtitle C of title I, under a
                    premium plan (such a plan with additional benefits
                    referred to in this subdivision as a ``premium-plus
                    plan'') .
                (2) Basic plan.--
                        (A) In general.--A basic plan shall offer the
                    essential benefits package required under title I for a
                    qualified health benefits plan.
                        (B) Tiered cost-sharing for affordable credit
                    eligible individuals.--In the case of an affordable
                    credit eligible individual (as defined in section
                    242(a)(1)) enrolled in an Exchange-participating health
                    benefits plan, the benefits under a basic plan are
                    modified to provide for the reduced cost-sharing for
                    the income tier applicable to the individual under
                    section 244(c).
                (3) Enhanced plan.--A enhanced plan shall offer, in
            addition to the level of benefits under the basic plan, a lower
            level of cost-sharing as provided under title I consistent with
            section 123(b)(5)(A).
                (4) Premium plan.--A premium plan shall offer, in addition
            to the level of benefits under the basic plan, a lower level of
            cost-sharing as provided under title I consistent with section
            123(b)(5)(B).
                (5) Premium-plus plan.--A premium-plus plan is a premium
            plan that also provides additional benefits, such as adult oral
            health and vision care, approved by the Commissioner. The
            portion of the premium that is attributable to such additional
            benefits shall be separately specified.
                (6) Range of permissible variation in cost-sharing.--The
            Commissioner shall establish a permissible range of variation
            of cost-sharing for each basic, enhanced, and premium plan,
            except with respect to any benefit for which there is no cost-
            sharing permitted under the essential benefits package. Such
            variation shall permit a variation of not more than plus (or
            minus) 10 percent in cost-sharing with respect to each benefit
            category specified under section 122.
        (d) Treatment of State Benefit Mandates.--Insofar as a State
    requires a health insurance issuer offering health insurance coverage
    to include benefits beyond the essential benefits package, such
    requirement shall continue to apply to an Exchange-participating health
    benefits plan, if the State has entered into an arrangement
    satisfactory to the Commissioner to reimburse the Commissioner for the
    amount of any net increase in affordability premium credits under
    subtitle C as a result of an increase in premium in basic plans as a
    result of application of such requirement.

    SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH
                  BENEFITS PLANS.

        (a) Contracting Duties.--In carrying out section 201(b)(1) and
    consistent with this subtitle:
                (1) Offering entity and plan standards.--The Commissioner
            shall--
                        (A) establish standards necessary to implement the
                    requirements of this title and title I for--
                                (i) QHBP offering entities for the offering
                            of an Exchange-participating health benefits
                            plan; and
                                (ii) for Exchange-participating health
                            benefits plans; and
                        (B) certify QHBP offering entities and qualified
                    health benefits plans as meeting such standards and
                    requirements of this title and title I for purposes of
                    this subtitle.
                (2) Soliciting and negotiating bids; contracts.--The
            Commissioner shall--
                        (A) solicit bids from QHBP offering entities for
                    the offering of Exchange-participating health benefits
                    plans;
                        (B) based upon a review of such bids, negotiate
                    with such entities for the offering of such plans; and
                        (C) enter into contracts with such entities for the
                    offering of such plans through the Health Insurance
                    Exchange under terms (consistent with this title)
                    negotiated between the Commissioner and such entities.
                (3) FAR not applicable.--The provisions of the Federal
            Acquisition Regulation shall not apply to contracts between the
            Commissioner and QHBP offering entities for the offering of
            Exchange-participating health benefits plans under this title.
        (b) Standards for QHBP Offering Entities to Offer Exchange-
    participating Health Benefits Plans.--The standards established under
    subsection (a)(1)(A) shall require that, in order for a QHBP offering
    entity to offer an Exchange-participating health benefits plan, the
    entity must meet the following requirements:
                (1) Licensed.--The entity shall be licensed to offer health
            insurance coverage under State law for each State in which it
            is offering such coverage.
                (2) Data reporting.--The entity shall provide for the
            reporting of such information as the Commissioner may specify,
            including information necessary to administer the risk pooling
            mechanism described in section 206(b) and information to
            address disparities in health and health care.
                (3) Implementing affordability credits.--The entity shall
            provide for implementation of the affordability credits
            provided for enrollees under subtitle C, including the
            reduction in cost-sharing under section 244(c).
                (4) Enrollment.--The entity shall accept all enrollments
            under this subtitle, subject to such exceptions (such as
            capacity limitations) in accordance with the requirements under
            title I for a qualified health benefits plan. The entity shall
            notify the Commissioner if the entity projects or anticipates
            reaching such a capacity limitation that would result in a
            limitation in enrollment.
                (5) Risk pooling participation.--The entity shall
            participate in such risk pooling mechanism as the Commissioner
            establishes under section 206(b).
                (6) Essential community providers.--With respect to the
            basic plan offered by the entity, the entity shall contract for
            outpatient services with covered entities (as defined in
            section 340B(a)(4) of the Public Health Service Act, as in
            effect as of July 1, 2009). The Commissioner shall specify the
            extent to which and manner in which the previous sentence shall
            apply in the case of a basic plan with respect to which the
            Commissioner determines provides substantially all benefits
            through a health maintenance organization, as defined in
            section 2791(b)(3) of the Public Health Service Act.
                (7) Culturally and linguistically appropriate services and
            communications.--The entity shall provide for culturally and
            linguistically appropriate communication and health services.
                (8) Additional requirements.--The entity shall comply with
            other applicable requirements of this title, as specified by
            the Commissioner, which shall include standards regarding
            billing and collection practices for premiums and related grace
            periods and which may include standards to ensure that the
            entity does not use coercive practices to force providers not
            to contract with other entities offering coverage through the
            Health Insurance Exchange.
        (c) Contracts.--
                (1) Bid application.--To be eligible to enter into a
            contract under this section, a QHBP offering entity shall
            submit to the Commissioner a bid at such time, in such manner,
            and containing such information as the Commissioner may
            require.
                (2) Term.--Each contract with a QHBP offering entity under
            this section shall be for a term of not less than one year, but
            may be made automatically renewable from term to term in the
            absence of notice of termination by either party.
                (3) Enforcement of network adequacy.--In the case of a
            health benefits plan of a QHBP offering entity that uses a
            provider network, the contract under this section with the
            entity shall provide that if--
                        (A) the Commissioner determines that such provider
                    network does not meet such standards as the
                    Commissioner shall establish under section 115; and
                        (B) an individual enrolled in such plan receives an
                    item or service from a provider that is not within such
                    network;
            then any cost-sharing for such item or service shall be equal
            to the amount of such cost-sharing that would be imposed if
            such item or service was furnished by a provider within such
            network.
                (4) Oversight and enforcement responsibilities.--The
            Commissioner shall establish processes, in coordination with
            State insurance regulators, to oversee, monitor, and enforce
            applicable requirements of this title with respect to QHBP
            offering entities offering Exchange-participating health
            benefits plans and such plans, including the marketing of such
            plans. Such processes shall include the following:
                        (A) Grievance and complaint mechanisms.--The
                    Commissioner shall establish, in coordination with
                    State insurance regulators, a process under which
                    Exchange-eligible individuals and employers may file
                    complaints concerning violations of such standards.
                        (B) Enforcement.--In carrying out authorities under
                    this subdivision relating to the Health Insurance
                    Exchange, the Commissioner may impose one or more of
                    the intermediate sanctions described in section 142(c).
                        (C) Termination.--
                                (i) In general.--The Commissioner may
                            terminate a contract with a QHBP offering
                            entity under this section for the offering of
                            an Exchange-participating health benefits plan
                            if such entity fails to comply with the
                            applicable requirements of this title. Any
                            determination by the Commissioner to terminate
                            a contract shall be made in accordance with
                            formal investigation and compliance procedures
                            established by the Commissioner under which--
                                        (I) the Commissioner provides the
                                    entity with the reasonable opportunity
                                    to develop and implement a corrective
                                    action plan to correct the deficiencies
                                    that were the basis of the
                                    Commissioner's determination; and
                                        (II) the Commissioner provides the
                                    entity with reasonable notice and
                                    opportunity for hearing (including the
                                    right to appeal an initial decision)
                                    before terminating the contract.
                                (ii) Exception for imminent and serious
                            risk to health.--Clause (i) shall not apply if
                            the Commissioner determines that a delay in
                            termination, resulting from compliance with the
                            procedures specified in such clause prior to
                            termination, would pose an imminent and serious
                            risk to the health of individuals enrolled
                            under the qualified health benefits plan of the
                            QHBP offering entity.
                        (D) Construction.--Nothing in this subsection shall
                    be construed as preventing the application of other
                    sanctions under subtitle E of title I with respect to
                    an entity for a violation of such a requirement.

    SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND
                  EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.

        (a) In General.--
                (1) Outreach.--The Commissioner shall conduct outreach
            activities consistent with subsection (c), including through
            use of appropriate entities as described in paragraph (4) of
            such subsection, to inform and educate individuals and
            employers about the Health Insurance Exchange and Exchange-
            participating health benefits plan options. Such outreach shall
            include outreach specific to vulnerable populations, such as
            children, individuals with disabilities, individuals with
            mental illness, and individuals with other cognitive
            impairments.
                (2) Eligibility.--The Commissioner shall make timely
            determinations of whether individuals and employers are
            Exchange-eligible individuals and employers (as defined in
            section 202).
                (3) Enrollment.--The Commissioner shall establish and carry
            out an enrollment process for Exchange-eligible individuals and
            employers, including at community locations, in accordance with
            subsection (b).
        (b) Enrollment Process.--
                (1) In general.--The Commissioner shall establish a process
            consistent with this title for enrollments in Exchange-
            participating health benefits plans. Such process shall provide
            for enrollment through means such as the mail, by telephone,
            electronically, and in person.
                (2) Enrollment periods.--
                        (A) Open enrollment period.--The Commissioner shall
                    establish an annual open enrollment period during which
                    an Exchange-eligible individual or employer may elect
                    to enroll in an Exchange-participating health benefits
                    plan for the following plan year and an enrollment
                    period for affordability credits under subtitle C. Such
                    periods shall be during September through November of
                    each year, or such other time that would maximize
                    timeliness of income verification for purposes of such
                    subtitle. The open enrollment period shall not be less
                    than 30 days.
                        (B) Special enrollment.--The Commissioner shall
                    also provide for special enrollment periods to take
                    into account special circumstances of individuals and
                    employers, such as an individual who--
                                (i) loses acceptable coverage;
                                (ii) experiences a change in marital or
                            other dependent status;
                                (iii) moves outside the service area of the
                            Exchange-participating health benefits plan in
                            which the individual is enrolled; or
                                (iv) experiences a significant change in
                            income.
                        (C) Enrollment information.--The Commissioner shall
                    provide for the broad dissemination of information to
                    prospective enrollees on the enrollment process,
                    including before each open enrollment period. In
                    carrying out the previous sentence, the Commissioner
                    may work with other appropriate entities to facilitate
                    such provision of information.
                (3) Automatic enrollment for non-medicaid eligible
            individuals.--
                        (A) In general.--The Commissioner shall provide for
                    a process under which individuals who are Exchange-
                    eligible individuals described in subparagraph (B) are
                    automatically enrolled under an appropriate Exchange-
                    participating health benefits plan. Such process may
                    involve a random assignment or some other form of
                    assignment that takes into account the health care
                    providers used by the individual involved or such other
                    relevant factors as the Commissioner may specify.
                        (B) Subsidized individuals described.--An
                    individual described in this subparagraph is an
                    Exchange-eligible individual who is either of the
                    following:
                                (i) Affordability credit eligible
                            individuals.--The individual--
                                        (I) has applied for, and been
                                    determined eligible for, affordability
                                    credits under subtitle C;
                                        (II) has not opted out from
                                    receiving such affordability credit;
                                    and
                                        (III) does not otherwise enroll in
                                    another Exchange-participating health
                                    benefits plan.
                                (ii) Individuals enrolled in a terminated
                            plan.--The individual is enrolled in an
                            Exchange-participating health benefits plan
                            that is terminated (during or at the end of a
                            plan year) and who does not otherwise enroll in
                            another Exchange-participating health benefits
                            plan.
                (4) Direct payment of premiums to plans.--Under the
            enrollment process, individuals enrolled in an Exchange-
            participating health benefits plan shall pay such plans
            directly, and not through the Commissioner or the Health
            Insurance Exchange.
        (c) Coverage Information and Assistance.--
                (1) Coverage information.--The Commissioner shall provide
            for the broad dissemination of information on Exchange-
            participating health benefits plans offered under this title.
            Such information shall be provided in a comparative manner, and
            shall include information on benefits, premiums, cost-sharing,
            quality, provider networks, and consumer satisfaction.
                (2) Consumer assistance with choice.--To provide assistance
            to Exchange-eligible individuals and employers, the
            Commissioner shall--
                        (A) provide for the operation of a toll-free
                    telephone hotline to respond to requests for assistance
                    and maintain an Internet website through which
                    individuals may obtain information on coverage under
                    Exchange-participating health benefits plans and file
                    complaints;
                        (B) develop and disseminate information to
                    Exchange-eligible enrollees on their rights and
                    responsibilities;
                        (C) assist Exchange-eligible individuals in
                    selecting Exchange-participating health benefits plans
                    and obtaining benefits through such plans; and
                        (D) ensure that the Internet website described in
                    subparagraph (A) and the information described in
                    subparagraph (B) is developed using plain language (as
                    defined in section 133(a)(2)).
                (3) Use of other entities.--In carrying out this
            subsection, the Commissioner may work with other appropriate
            entities to facilitate the dissemination of information under
            this subsection and to provide assistance as described in
            paragraph (2).
        (d) Special Duties Related to Medicaid and CHIP.--
                (1) Coverage for certain newborns.--
                        (A) In general.--In the case of a child born in the
                    United States who at the time of birth is not otherwise
                    covered under acceptable coverage, for the period of
                    time beginning on the date of birth and ending on the
                    date the child otherwise is covered under acceptable
                    coverage (or, if earlier, the end of the month in which
                    the 60-day period, beginning on the date of birth,
                    ends), the child shall be deemed--
                                (i) to be a non-traditional Medicaid
                            eligible individual (as defined in subsection
                            (e)(5)) for purposes of this subdivision and
                            Medicaid; and
                                (ii) to have elected to enroll in Medicaid
                            through the application of paragraph (3).
                        (B) Extended treatment as traditional medicaid
                    eligible individual.--In the case of a child described
                    in subparagraph (A) who at the end of the period
                    referred to in such subparagraph is not otherwise
                    covered under acceptable coverage, the child shall be
                    deemed (until such time as the child obtains such
                    coverage or the State otherwise makes a determination
                    of the child's eligibility for medical assistance under
                    its Medicaid plan pursuant to section 1943(c)(1) of the
                    Social Security Act) to be a traditional Medicaid
                    eligible individual described in section 1902(l)(1)(B)
                    of such Act.
                (2) CHIP transition.--A child who, as of the day before the
            first day of Y1, is eligible for child health assistance under
            title XXI of the Social Security Act (including a child
            receiving coverage under an arrangement described in section
            2101(a)(2) of such Act) is deemed as of such first day to be an
            Exchange-eligible individual unless the individual is a
            traditional Medicaid eligible individual as of such day.
                (3) Automatic enrollment of medicaid eligible individuals
            into medicaid.--The Commissioner shall provide for a process
            under which an individual who is described in section 202(d)(3)
            and has not elected to enroll in an Exchange-participating
            health benefits plan is automatically enrolled under Medicaid.
                (4) Notifications.--The Commissioner shall notify each
            State in Y1 and for purposes of section 1902(gg)(1) of the
            Social Security Act (as added by section 1703(a)) whether the
            Health Insurance Exchange can support enrollment of children
            described in paragraph (2) in such State in such year.
        (e) Medicaid Coverage for Medicaid Eligible Individuals.--
                (1) In general.--
                        (A) Choice for limited exchange-eligible
                    individuals.--As part of the enrollment process under
                    subsection (b), the Commissioner shall provide the
                    option, in the case of an Exchange-eligible individual
                    described in section 202(d)(3), for the individual to
                    elect to enroll under Medicaid instead of under an
                    Exchange-participating health benefits plan. Such an
                    individual may change such election during an
                    enrollment period under subsection (b)(2).
                        (B) Medicaid enrollment obligation.--An Exchange
                    eligible individual may apply, in the manner described
                    in section 241(b)(1), for a determination of whether
                    the individual is a Medicaid-eligible individual. If
                    the individual is determined to be so eligible, the
                    Commissioner, through the Medicaid memorandum of
                    understanding, shall provide for the enrollment of the
                    individual under the State Medicaid plan in accordance
                    with the Medicaid memorandum of understanding under
                    paragraph (4). In the case of such an enrollment, the
                    State shall provide for the same periodic
                    redetermination of eligibility under Medicaid as would
                    otherwise apply if the individual had directly applied
                    for medical assistance to the State Medicaid agency.
                (2) Non-traditional medicaid eligible individuals.--In the
            case of a non-traditional Medicaid eligible individual
            described in section 202(d)(3) who elects to enroll under
            Medicaid under paragraph (1)(A), the Commissioner shall provide
            for the enrollment of the individual under the State Medicaid
            plan in accordance with the Medicaid memorandum of
            understanding under paragraph (4).
                (3) Coordinated enrollment with state through memorandum of
            understanding.--The Commissioner, in consultation with the
            Secretary of Health and Human Services, shall enter into a
            memorandum of understanding with each State (each in this
            subdivision referred to as a ``Medicaid memorandum of
            understanding'') with respect to coordinating enrollment of
            individuals in Exchange-participating health benefits plans and
            under the State's Medicaid program consistent with this section
            and to otherwise coordinate the implementation of the
            provisions of this subdivision with respect to the Medicaid
            program. Such memorandum shall permit the exchange of
            information consistent with the limitations described in
            section 1902(a)(7) of the Social Security Act. Nothing in this
            section shall be construed as permitting such memorandum to
            modify or vitiate any requirement of a State Medicaid plan.
                (4) Medicaid eligible individuals.--For purposes of this
            subdivision:
                        (A) Medicaid eligible individual.--The term
                    ``Medicaid eligible individual'' means an individual
                    who is eligible for medical assistance under Medicaid.
                        (B) Traditional medicaid eligible individual.--The
                    term ``traditional Medicaid eligible individual'' means
                    a Medicaid eligible individual other than an individual
                    who is--
                                (i) a Medicaid eligible individual by
                            reason of the application of subclause (VIII)
                            of section 1902(a)(10)(A)(i) of the Social
                            Security Act; or
                                (ii) a childless adult not described in
                            section 1902(a)(10)(A) or (C) of such Act (as
                            in effect as of the day before the date of the
                            enactment of this Act).
                        (C) Non-traditional medicaid eligible individual.--
                    The term ``non-traditional Medicaid eligible
                    individual'' means a Medicaid eligible individual who
                    is not a traditional Medicaid eligible individual.
        (f) Effective Culturally and Linguistically Appropriate
    Communication.--In carrying out this section, the Commissioner shall
    establish effective methods for communicating in plain language and a
    culturally and linguistically appropriate manner.

    SEC. 206. OTHER FUNCTIONS.

        (a) Coordination of Affordability Credits.--The Commissioner shall
    coordinate the distribution of affordability premium and cost-sharing
    credits under subtitle C to QHBP offering entities offering Exchange-
    participating health benefits plans.
        (b) Coordination of Risk Pooling.--The Commissioner shall establish
    a mechanism whereby there is an adjustment made of the premium amounts
    payable among QHBP offering entities offering Exchange-participating
    health benefits plans of premiums collected for such plans that takes
    into account (in a manner specified by the Commissioner) the
    differences in the risk characteristics of individuals and employers
    enrolled under the different Exchange-participating health benefits
    plans offered by such entities so as to minimize the impact of adverse
    selection of enrollees among the plans offered by such entities.
        (c) Special Inspector General for the Health Insurance Exchange.--
                (1) Establishment; appointment.--There is hereby
            established the Office of the Special Inspector General for the
            Health Insurance Exchange, to be headed by a Special Inspector
            General for the Health Insurance Exchange (in this subsection
            referred to as the ``Special Inspector General'') to be
            appointed by the President, by and with the advice and consent
            of the Senate. The nomination of an individual as Special
            Inspector General shall be made as soon as practicable after
            the establishment of the program under this subtitle.
                (2) Duties.--The Special Inspector General shall--
                        (A) conduct, supervise, and coordinate audits,
                    evaluations and investigations of the Health Insurance
                    Exchange to protect the integrity of the Health
                    Insurance Exchange, as well as the health and welfare
                    of participants in the Exchange;
                        (B) report both to the Commissioner and to the
                    Congress regarding program and management problems and
                    recommendations to correct them;
                        (C) have other duties (described in paragraphs (2)
                    and (3) of section 121 of division A of Public Law 110-
                    343) in relation to the duties described in the
                    previous subparagraphs; and
                        (D) have the authorities provided in section 6 of
                    the Inspector General Act of 1978 in carrying out
                    duties under this paragraph.
                (3) Application of other special inspector general
            provisions.--The provisions of subsections (b) (other than
            paragraphs (1) and (3)), (d) (other than paragraph (1)), and
            (e) of section 121 of division A of the Emergency Economic
            Stabilization Act of 2009 (Public Law 110-343) shall apply to
            the Special Inspector General under this subsection in the same
            manner as such provisions apply to the Special Inspector
            General under such section.
                (4) Reports.--Not later than one year after the
            confirmation of the Special Inspector General, and annually
            thereafter, the Special Inspector General shall submit to the
            appropriate committees of Congress a report summarizing the
            activities of the Special Inspector General during the one year
            period ending on the date such report is submitted.
                (5) Termination.--The Office of the Special Inspector
            General shall terminate five years after the date of the
            enactment of this Act.
        (d)  Assistance for Small Employers.--
                (1) In general.--The Commissioner, in consultation with the
            Small Business Administration, shall establish and carry out a
            program to provide to small employers counseling and technical
            assistance with respect to the provision of health insurance to
            employees of such employers through the Health Insurance
            Exchange.
                (2) Duties.--The program established under paragraph (1)
            shall include the following services:
                        (A) Educational activities to increase awareness of
                    the Health Insurance Exchange and available small
                    employer health plan options.
                        (B) Distribution of information to small employers
                    with respect to the enrollment and selection process
                    for health plans available under the Health Insurance
                    Exchange, including standardized comparative
                    information on the health plans available under the
                    Health Insurance Exchange.
                        (C) Distribution of information to small employers
                    with respect to available affordability credits or
                    other financial assistance.
                        (D) Referrals to appropriate entities of complaints
                    and questions relating to the Health Insurance
                    Exchange.
                        (E) Enrollment and plan selection assistance for
                    employers with respect to the Health Insurance
                    Exchange.
                        (F) Responses to questions relating to the Health
                    Insurance Exchange and the program established under
                    paragraph (1).
                (3) Authority to provide services directly or by
            contract.--The Commissioner may provide services under
            paragraph (2) directly or by contract with nonprofit entities
            that the Commissioner determines capable of carrying out such
            services.
                (4) Small employer defined.--In this subsection, the term
            ``small employer'' means an employer with less than 100
            employees.

    SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.

        (a) Establishment of Health Insurance Exchange Trust Fund.--There
    is created within the Treasury of the United States a trust fund to be
    known as the ``Health Insurance Exchange Trust Fund'' (in this section
    referred to as the ``Trust Fund''), consisting of such amounts as may
    be appropriated or credited to the Trust Fund under this section or any
    other provision of law.
        (b) Payments From Trust Fund.--The Commissioner shall pay from time
    to time from the Trust Fund such amounts as the Commissioner determines
    are necessary to make payments to operate the Health Insurance
    Exchange, including payments under subtitle C (relating to
    affordability credits).
        (c) Transfers to Trust Fund.--
                (1) Dedicated payments.--There is hereby appropriated to
            the Trust Fund amounts equivalent to the following:
                        (A) Taxes on individuals not obtaining acceptable
                    coverage.--The amounts received in the Treasury under
                    section 59B of the Internal Revenue Code of 1986
                    (relating to requirement of health insurance coverage
                    for individuals).
                        (B) Employment taxes on employers not providing
                    acceptable coverage.--The amounts received in the
                    Treasury under section 3111(c) of the Internal Revenue
                    Code of 1986 (relating to employers electing to not
                    provide health benefits).
                        (C) Excise tax on failures to meet certain health
                    coverage requirements.--The amounts received in the
                    Treasury under section 4980H(b) (relating to excise tax
                    with respect to failure to meet health coverage
                    participation requirements).
                (2) Appropriations to cover government contributions.--
            There are hereby appropriated, out of any moneys in the
            Treasury not otherwise appropriated, to the Trust Fund, an
            amount equivalent to the amount of payments made from the Trust
            Fund under subsection (b) plus such amounts as are necessary
            reduced by the amounts deposited under paragraph (1).
        (d) Application of Certain Rules.--Rules similar to the rules of
    subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall
    apply with respect to the Trust Fund.

    SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.

        (a) In General.--If--
                (1) a State (or group of States, subject to the approval of
            the Commissioner) applies to the Commissioner for approval of a
            State-based Health Insurance Exchange to operate in the State
            (or group of States); and
                (2) the Commissioner approves such State-based Health
            Insurance Exchange,
    then, subject to subsections (c) and (d), the State-based Health
    Insurance Exchange shall operate, instead of the Health Insurance
    Exchange, with respect to such State (or group of States). The
    Commissioner shall approve a State-based Health Insurance Exchange if
    it meets the requirements for approval under subsection (b).
        (b) Requirements for Approval.--The Commissioner may not approve a
    State-based Health Insurance Exchange under this section unless the
    following requirements are met:
                (1) The State-based Health Insurance Exchange must
            demonstrate the capacity to and provide assurances satisfactory
            to the Commissioner that the State-based Health Insurance
            Exchange will carry out the functions specified for the Health
            Insurance Exchange in the State (or States) involved,
            including--
                        (A) negotiating and contracting with QHBP offering
                    entities for the offering of Exchange-participating
                    health benefits plan, which satisfy the standards and
                    requirements of this title and title I;
                        (B) enrolling Exchange-eligible individuals and
                    employers in such State in such plans;
                        (C) the establishment of sufficient local offices
                    to meet the needs of Exchange-eligible individuals and
                    employers;
                        (D) administering affordability credits under
                    subtitle B using the same methodologies (and at least
                    the same income verification methods) as would
                    otherwise apply under such subtitle and at a cost to
                    the Federal Government which does exceed the cost to
                    the Federal Government if this section did not apply;
                    and
                        (E) enforcement activities consistent with federal
                    requirements.
                (2) There is no more than one Health Insurance Exchange
            operating with respect to any one State.
                (3) The State provides assurances satisfactory to the
            Commissioner that approval of such an Exchange will not result
            in any net increase in expenditures to the Federal Government.
                (4) The State provides for reporting of such information as
            the Commissioner determines and assurances satisfactory to the
            Commissioner that it will vigorously enforce violations of
            applicable requirements.
                (5) Such other requirements as the Commissioner may
            specify.
        (c) Ceasing Operation.--
                (1) In general.--A State-based Health Insurance Exchange
            may, at the option of each State involved, and only after
            providing timely and reasonable notice to the Commissioner,
            cease operation as such an Exchange, in which case the Health
            Insurance Exchange shall operate, instead of such State-based
            Health Insurance Exchange, with respect to such State (or
            States).
                (2) Termination; health insurance exchange resumption of
            functions.--The Commissioner may terminate the approval (for
            some or all functions) of a State-based Health Insurance
            Exchange under this section if the Commissioner determines that
            such Exchange no longer meets the requirements of subsection
            (b) or is no longer capable of carrying out such functions in
            accordance with the requirements of this subtitle. In lieu of
            terminating such approval, the Commissioner may temporarily
            assume some or all functions of the State-based Health
            Insurance Exchange until such time as the Commissioner
            determines the State-based Health Insurance Exchange meets such
            requirements of subsection (b) and is capable of carrying out
            such functions in accordance with the requirements of this
            subtitle.
                (3) Effectiveness.--The ceasing or termination of a State-
            based Health Insurance Exchange under this subsection shall be
            effective in such time and manner as the Commissioner shall
            specify.
        (d) Retention of Authority.--
                (1) Authority retained.--Enforcement authorities of the
            Commissioner shall be retained by the Commissioner.
                (2) Discretion to retain additional authority.--The
            Commissioner may specify functions of the Health Insurance
            Exchange that--
                        (A) may not be performed by a State-based Health
                    Insurance Exchange under this section; or
                        (B) may be performed by the Commissioner and by
                    such a State-based Health Insurance Exchange.
        (e) References.--In the case of a State-based Health Insurance
    Exchange, except as the Commissioner may otherwise specify under
    subsection (d), any references in this subtitle to the Health Insurance
    Exchange or to the Commissioner in the area in which the State-based
    Health Insurance Exchange operates shall be deemed a reference to the
    State-based Health Insurance Exchange and the head of such Exchange,
    respectively.
        (f) Funding.--In the case of a State-based Health Insurance
    Exchange, there shall be assistance provided for the operation of such
    Exchange in the form of a matching grant with a State share of
    expenditures required.

    SEC. 209. PARTICIPATION OF SMALL EMPLOYER BENEFIT ARRANGEMENTS.

        (a) In General.--The Commissioner may enter into contracts with
    small employer benefit arrangements to provide consumer information,
    outreach, and assistance in the enrollment of small employers (and
    their employees) who are members of such an arrangement under Exchange
    participating health benefits plans.
        (b) Small Employer Benefit Arrangement Defined.--In this section,
    the term ``small employer benefit arrangement'' means a not-for-profit
    agricultural or other cooperative that--
                (1) consists solely of its members and is operated for the
            primary purpose of providing affordable employee benefits to
            its members;
                (2) only has as members small employers in the same
            industry or line of business;
                (3) has no member that has more than a 5 percent voting
            interest in the cooperative; and
                (4) is governed by a board of directors elected by its
            members.

                   Subtitle B--Public Health Insurance Option

    SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE
                  OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.

        (a) Establishment.--For years beginning with Y1, the Secretary of
    Health and Human Services (in this subtitle referred to as the
    ``Secretary'') shall provide for the offering of an Exchange-
    participating health benefits plan (in this subdivision referred to as
    the ``public health insurance option'') that ensures choice,
    competition, and stability of affordable, high quality coverage
    throughout the United States in accordance with this subtitle. In
    designing the option, the Secretary's primary responsibility is to
    create a low-cost plan without compromising quality or access to care.
        (b) Offering as an Exchange-participating Health Benefits Plan.--
                (1) Exclusive to the exchange.--The public health insurance
            option shall only be made available through the Health
            Insurance Exchange.
                (2) Ensuring a level playing field.--Consistent with this
            subtitle, the public health insurance option shall comply with
            requirements that are applicable under this title to an
            Exchange-participating health benefits plan, including
            requirements related to benefits, benefit levels, provider
            networks, notices, consumer protections, and cost sharing.
                (3) Provision of benefit levels.--The public health
            insurance option--
                        (A) shall offer basic, enhanced, and premium plans;
                    and
                        (B) may offer premium-plus plans.
        (c) Administrative Contracting.--The Secretary may enter into
    contracts for the purpose of performing administrative functions
    (including functions described in subsection (a)(4) of section 1874A of
    the Social Security Act) with respect to the public health insurance
    option in the same manner as the Secretary may enter into contracts
    under subsection (a)(1) of such section. The Secretary has the same
    authority with respect to the public health insurance option as the
    Secretary has under subsections (a)(1) and (b) of section 1874A of the
    Social Security Act with respect to title XVIII of such Act. Contracts
    under this subsection shall not involve the transfer of insurance risk
    to such entity.
        (d) Ombudsman.--The Secretary shall establish an office of the
    ombudsman for the public health insurance option which shall have
    duties with respect to the public health insurance option similar to
    the duties of the Medicare Beneficiary Ombudsman under section
    1808(c)(2) of the Social Security Act.
        (e) Data Collection.--The Secretary shall collect such data as may
    be required to establish premiums and payment rates for the public
    health insurance option and for other purposes under this subtitle,
    including to improve quality and to reduce disparities in health and
    health care based on race, ethnicity, primary language, sex, sexual
    orientation, gender identity, disability, socioeconomic status, rural,
    urban, or other geographic setting, and any other population or
    subpopulation as determined appropriate by the Secretary, but only if
    the data collection is conducted on a voluntary basis and consistent
    with the standards, including privacy protections, established pursuant
    to section 1709 of the Public Health Service Act.
        (f) Treatment of Public Health Insurance Option.--With respect to
    the public health insurance option, the Secretary shall be treated as a
    QHBP offering entity offering an Exchange-participating health benefits
    plan.
        (g) Access to Federal Courts.--The provisions of Medicare (and
    related provisions of title II of the Social Security Act) relating to
    access of Medicare beneficiaries to Federal courts for the enforcement
    of rights under Medicare, including with respect to amounts in
    controversy, shall apply to the public health insurance option and
    individuals enrolled under such option under this title in the same
    manner as such provisions apply to Medicare and Medicare beneficiaries.

    SEC. 222. PREMIUMS AND FINANCING.

        (a) Establishment of Premiums.--
                (1) In general.--The Secretary shall establish
            geographically-adjusted premium rates for the public health
            insurance option in a manner--
                        (A) that complies with the premium rules
                    established by the Commissioner under section 113 for
                    Exchange-participating health benefit plans; and
                        (B) at a level sufficient to fully finance the
                    costs of--
                                (i) health benefits provided by the public
                            health insurance option; and
                                (ii) administrative costs related to
                            operating the public health insurance option.
                (2) Contingency margin.--In establishing premium rates
            under paragraph (1), the Secretary shall include an appropriate
            amount for a contingency margin.
        (b) Account.--
                (1) Establishment.--There is established in the Treasury of
            the United States an Account for the receipts and disbursements
            attributable to the operation of the public health insurance
            option, including the start-up funding under paragraph (2).
            Section 1854(g) of the Social Security Act shall apply to
            receipts described in the previous sentence in the same manner
            as such section applies to payments or premiums described in
            such section.
                (2) Start-up funding.--
                        (A) In general.--In order to provide for the
                    establishment of the public health insurance option
                    there is hereby appropriated to the Secretary, out of
                    any funds in the Treasury not otherwise appropriated,
                    $2,000,000,000. In order to provide for initial claims
                    reserves before the collection of premiums, there is
                    hereby appropriated to the Secretary, out of any funds
                    in the Treasury not otherwise appropriated, such sums
                    as necessary to cover 90 days worth of claims reserves
                    based on projected enrollment.
                        (B) Amortization of start-up funding.--The
                    Secretary shall provide for the repayment of the
                    startup funding provided under subparagraph (A) to the
                    Treasury in an amortized manner over the 10-year period
                    beginning with Y1.
                        (C) Limitation on funding.--Nothing in this section
                    shall be construed as authorizing any additional
                    appropriations to the Account, other than such amounts
                    as are otherwise provided with respect to other
                    Exchange-participating health benefits plans.

    SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.

        (a) Rates Established by Secretary.--
                (1) In general.--The Secretary shall establish payment
            rates for the public health insurance option for services and
            health care providers consistent with this section and may
            change such payment rates in accordance with section 224.
                (2) Initial payment rules.--
                        (A) In general.--Except as provided in subparagraph
                    (B) and subsection (b)(1), during Y1, Y2, and Y3, the
                    Secretary shall base the payment rates under this
                    section for services and providers described in
                    paragraph (1) on the payment rates for similar services
                    and providers under parts A and B of Medicare.
                        (B) Exceptions.--
                                (i) Practitioners' services.--Payment rates
                            for practitioners' services otherwise
                            established under the fee schedule under
                            section 1848 of the Social Security Act shall
                            be applied without regard to the provisions
                            under subsection (f) of such section and the
                            update under subsection (d)(4) under such
                            section for a year as applied under this
                            paragraph shall be not less than 1 percent.
                                (ii) Adjustments.--The Secretary may
                            determine the extent to which Medicare
                            adjustments applicable to base payment rates
                            under parts A and B of Medicare shall apply
                            under this subtitle.
                (3) For new services.--The Secretary shall modify payment
            rates described in paragraph (2) in order to accommodate
            payments for services, such as well-child visits, that are not
            otherwise covered under Medicare.
                (4) Prescription drugs.--Payment rates under this section
            for prescription drugs that are not paid for under part A or
            part B of Medicare shall be at rates negotiated by the
            Secretary.
        (b) Incentives for Participating Providers.--
                (1) Initial incentive period.--
                        (A) In general.--The Secretary shall provide, in
                    the case of services described in subparagraph (B)
                    furnished during Y1, Y2, and Y3, for payment rates that
                    are 5 percent greater than the rates established under
                    subsection (a).
                        (B) Services described.--The services described in
                    this subparagraph are items and professional services,
                    under the public health insurance option by a physician
                    or other health care practitioner who participates in
                    both Medicare and the public health insurance option.
                        (C) Special rules.--A pediatrician and any other
                    health care practitioner who is a type of practitioner
                    that does not typically participate in Medicare (as
                    determined by the Secretary) shall also be eligible for
                    the increased payment rates under subparagraph (A).
                (2) Subsequent periods.--Beginning with Y4 and for
            subsequent years, the Secretary shall continue to use an
            administrative process to set such rates in order to promote
            payment accuracy, to ensure adequate beneficiary access to
            providers, and to promote affordability and the efficient
            delivery of medical care consistent with section 221(a). Such
            rates shall not be set at levels expected to increase overall
            medical costs under the option beyond what would be expected if
            the process under subsection (a)(2) and paragraph (1) of this
            subsection were continued.
                (3) Establishment of a provider network.--Health care
            providers participating under Medicare are participating
            providers in the public health insurance option unless they opt
            out in a process established by the Secretary.
        (c) Administrative Process for Setting Rates.--Chapter 5 of title
    5, United States Code shall apply to the process for the initial
    establishment of payment rates under this section but not to the
    specific methodology for establishing such rates or the calculation of
    such rates.
        (d) Construction.--Nothing in this subtitle shall be construed as
    limiting the Secretary's authority to correct for payments that are
    excessive or deficient, taking into account the provisions of section
    221(a) and the amounts paid for similar health care providers and
    services under other Exchange-participating health benefits plans.
        (e) Construction.--Nothing in this subtitle shall be construed as
    affecting the authority of the Secretary to establish payment rates,
    including payments to provide for the more efficient delivery of
    services, such as the initiatives provided for under section 224.
        (f) Limitations on Review.--There shall be no administrative or
    judicial review of a payment rate or methodology established under this
    section or under section 224.

    SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.

        (a) In General.--For plan years beginning with Y1, the Secretary
    may utilize innovative payment mechanisms and policies to determine
    payments for items and services under the public health insurance
    option. The payment mechanisms and policies under this section may
    include patient-centered medical home and other care management
    payments, accountable care organizations, value-based purchasing,
    bundling of services, differential payment rates, performance or
    utilization based payments, partial capitation, and direct contracting
    with providers.
        (b) Requirements for Innovative Payments.--The Secretary shall
    design and implement the payment mechanisms and policies under this
    section in a manner that--
                (1) seeks to--
                        (A) improve health outcomes;
                        (B) reduce health disparities (including racial,
                    ethnic, and other disparities);
                        (C) provide efficient and affordable care;
                        (D) address geographic variation in the provision
                    of health services; or
                        (E) prevent or manage chronic illness; and
                (2) promotes care that is integrated, patient-centered,
            quality, and efficient.
        (c) Encouraging the Use of High Value Services.--To the extent
    allowed by the benefit standards applied to all Exchange-participating
    health benefits plans, the public health insurance option may modify
    cost sharing and payment rates to encourage the use of services that
    promote health and value.
        (d) Non-uniformity Permitted.--Nothing in this subtitle shall
    prevent the Secretary from varying payments based on different payment
    structure models (such as accountable care organizations and medical
    homes) under the public health insurance option for different
    geographic areas.

    SEC. 225. PROVIDER PARTICIPATION.

        (a) In General.--The Secretary shall establish conditions of
    participation for health care providers under the public health
    insurance option.
        (b) Licensure or Certification.--The Secretary shall not allow a
    health care provider to participate in the public health insurance
    option unless such provider is appropriately licensed, certified, or
    otherwise permitted to practice under State law.
        (c) Payment Terms for Providers.--
                (1) Physicians.--The Secretary shall provide for the annual
            participation of physicians under the public health insurance
            option, for which payment may be made for services furnished
            during the year, in one of 2 classes:
                        (A) Preferred physicians.--Those physicians who
                    agree to accept the payment rate established under
                    section 223 (without regard to cost-sharing) as the
                    payment in full.
                        (B) Participating, non-preferred physicians.--Those
                    physicians who agree not to impose charges (in relation
                    to the payment rate described in section 223 for such
                    physicians) that exceed the ratio permitted under
                    section 1848(g)(2)(C) of the Social Security Act.
                (2) Other providers.--The Secretary shall provide for the
            participation (on an annual or other basis specified by the
            Secretary) of health care providers (other than physicians)
            under the public health insurance option under which payment
            shall only be available if the provider agrees to accept the
            payment rate established under section 223 (without regard to
            cost-sharing) as the payment in full.
        (d) Exclusion of Certain Providers.--The Secretary shall exclude
    from participation under the public health insurance option a health
    care provider that is excluded from participation in a Federal health
    care program (as defined in section 1128B(f) of the Social Security
    Act).

    SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.

        Provisions of law (other than criminal law provisions) identified
    by the Secretary by regulation, in consultation with the Inspector
    General of the Department of Health and Human Services, that impose
    sanctions with respect to waste, fraud, and abuse under Medicare, such
    as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to
    the public health insurance option.

    SEC. 227. SENSE OF THE HOUSE REGARDING ENROLLMENT OF MEMBERS IN THE
                  PUBLIC OPTION.

        It is the sense of the House of Representatives that Members who
    vote in favor of the establishment of a public, Federal Government run
    health insurance option, and senior members of the President's
    administration, are urged to forgo their right to participate in the
    Federal Employees Health Benefits Program (FEHBP) and agree to enroll
    under that public option.

                  Subtitle C--Individual Affordability Credits

    SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.

        (a) In General.--Subject to the succeeding provisions of this
    subtitle, in the case of an affordable credit eligible individual
    enrolled in an Exchange-participating health benefits plan--
                (1) the individual shall be eligible for, in accordance
            with this subtitle, affordability credits consisting of--
                        (A) an affordability premium credit under section
                    243 to be applied against the premium for the Exchange-
                    participating health benefits plan in which the
                    individual is enrolled; and
                        (B) an affordability cost-sharing credit under
                    section 244 to be applied as a reduction of the cost-
                    sharing otherwise applicable to such plan; and
                (2) the Commissioner shall pay the QHBP offering entity
            that offers such plan from the Health Insurance Exchange Trust
            Fund the aggregate amount of affordability credits for all
            affordable credit eligible individuals enrolled in such plan.
        (b) Application.--
                (1) In general.--An Exchange eligible individual may apply
            to the Commissioner through the Health Insurance Exchange or
            through another entity under an arrangement made with the
            Commissioner, in a form and manner specified by the
            Commissioner. The Commissioner through the Health Insurance
            Exchange or through another public entity under an arrangement
            made with the Commissioner shall make a determination as to
            eligibility of an individual for affordability credits under
            this subtitle. The Commissioner shall establish a process
            whereby, on the basis of information otherwise available,
            individuals may be deemed to be affordable credit eligible
            individuals. In carrying this subtitle, the Commissioner shall
            establish effective methods that ensure that individuals with
            limited English proficiency are able to apply for affordability
            credits.
                (2) Use of state medicaid agencies.--If the Commissioner
            determines that a State Medicaid agency has the capacity to
            make a determination of eligibility for affordability credits
            under this subtitle and under the same standards as used by the
            Commissioner, under the Medicaid memorandum of understanding
            (as defined in section 205(c)(4))--
                        (A) the State Medicaid agency is authorized to
                    conduct such determinations for any Exchange-eligible
                    individual who requests such a determination; and
                        (B) the Commissioner shall reimburse the State
                    Medicaid agency for the costs of conducting such
                    determinations.
                (3) Medicaid screen and enroll obligation.--In the case of
            an application made under paragraph (1), there shall be a
            determination of whether the individual is a Medicaid-eligible
            individual. If the individual is determined to be so eligible,
            the Commissioner, through the Medicaid memorandum of
            understanding, shall provide for the enrollment of the
            individual under the State Medicaid plan in accordance with the
            Medicaid memorandum of understanding. In the case of such an
            enrollment, the State shall provide for the same periodic
            redetermination of eligibility under Medicaid as would
            otherwise apply if the individual had directly applied for
            medical assistance to the State Medicaid agency.
        (c) Use of Affordability Credits.--
                (1) In general.--In Y1 and Y2 an affordable credit eligible
            individual may use an affordability credit only with respect to
            a basic plan.
                (2) Flexibility in plan enrollment authorized.--Beginning
            with Y3, the Commissioner shall establish a process to allow an
            affordability credit to be used for enrollees in enhanced or
            premium plans. In the case of an affordable credit eligible
            individual who enrolls in an enhanced or premium plan, the
            individual shall be responsible for any difference between the
            premium for such plan and the affordable credit amount
            otherwise applicable if the individual had enrolled in a basic
            plan.
        (d) Access to Data.--In carrying out this subtitle, the
    Commissioner shall request from the Secretary of the Treasury
    consistent with section 6103 of the Internal Revenue Code of 1986 such
    information as may be required to carry out this subtitle.
        (e) No Cash Rebates.--In no case shall an affordable credit
    eligible individual receive any cash payment as a result of the
    application of this subtitle.

    SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

        (a) Definition.--
                (1) In general.--For purposes of this subdivision, the term
            ``affordable credit eligible individual'' means, subject to
            subsection (b), an individual who is lawfully present in a
            State in the United States (other than as a nonimmigrant
            described in a subparagraph (excluding subparagraphs (K), (T),
            (U), and (V)) of section 101(a)(15) of the Immigration and
            Nationality Act)--
                        (A) who is enrolled under an Exchange-participating
                    health benefits plan and is not enrolled under such
                    plan as an employee (or dependent of an employee)
                    through an employer qualified health benefits plan that
                    meets the requirements of section 312;
                        (B) with family income below 400 percent of the
                    Federal poverty level for a family of the size
                    involved; and
                        (C) who is not a Medicaid eligible individual,
                    other than an individual described in section 202(d)(3)
                    or an individual during a transition period under
                    section 202(d)(4)(B)(ii).
                (2) Treatment of family.--Except as the Commissioner may
            otherwise provide, members of the same family who are
            affordable credit eligible individuals shall be treated as a
            single affordable credit individual eligible for the applicable
            credit for such a family under this subtitle.
        (b) Limitations on Employee and Dependent Disqualification.--
                (1) In general.--Subject to paragraph (2), the term
            ``affordable credit eligible individual'' does not include a
            full-time employee of an employer if the employer offers the
            employee coverage (for the employee and dependents) as a full-
            time employee under a group health plan if the coverage and
            employer contribution under the plan meet the requirements of
            section 312.
                (2) Exceptions.--
                        (A) For certain family circumstances.--The
                    Commissioner shall establish such exceptions and
                    special rules in the case described in paragraph (1) as
                    may be appropriate in the case of a divorced or
                    separated individual or such a dependent of an employee
                    who would otherwise be an affordable credit eligible
                    individual.
                        (B) For unaffordable employer coverage.--For years
                    beginning with Y2, in the case of full-time employees
                    for which the cost of the employee premium (plus, to
                    the extent specified by the Commissioner, out-of-pocket
                    cost-sharing for such year or the preceding year) for
                    coverage under a group health plan would exceed 11
                    percent of current family income (determined by the
                    Commissioner on the basis of verifiable documentation
                    and without regard to section 245), paragraph (1) shall
                    not apply.
        (c) Income Defined.--
                (1) In general.--In this title, the term ``income'' means
            modified adjusted gross income (as defined in section 59B of
            the Internal Revenue Code of 1986).
                (2) Study of income disregards.--The Commissioner shall
            conduct a study that examines the application of income
            disregards for purposes of this subtitle. Not later than the
            first day of Y2, the Commissioner shall submit to Congress a
            report on such study and shall include such recommendations as
            the Commissioner determines appropriate.
        (d) Clarification of Treatment of Affordability Credits.--
    Affordability credits under this subtitle shall not be treated, for
    purposes of title IV of the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996, to be a benefit provided under
    section 403 of such title.

    SEC. 243. AFFORDABLE PREMIUM CREDIT.

        (a) In General.--The affordability premium credit under this
    section for an affordable credit eligible individual enrolled in an
    Exchange-participating health benefits plan is in an amount equal to
    the amount (if any) by which the premium for the plan (or, if less, the
    reference premium amount specified in subsection (c)), exceeds the
    affordable premium amount specified in subsection (b) for the
    individual.
        (b) Affordable Premium Amount.--
                (1) In general.--The affordable premium amount specified in
            this subsection for an individual for monthly premium in a plan
            year shall be equal to \1/12\ of the product of--
                        (A) the premium percentage limit specified in
                    paragraph (2) for the individual based upon the
                    individual's family income for the plan year; and
                        (B) the individual's family income for such plan
                    year.
                (2) Premium percentage limits based on table.--The
            Commissioner shall establish premium percentage limits so that
            for individuals whose family income is within an income tier
            specified in the table in subsection (d) such percentage limits
            shall increase, on a sliding scale in a linear manner, from the
            initial premium percentage to the final premium percentage
            specified in such table for such income tier.
        (c) Reference Premium Amount.--The reference premium amount
    specified in this subsection for a plan year for an individual in a
    premium rating area is equal to the average premium for the 3 basic
    plans in the area for the plan year with the lowest premium levels. In
    computing such amount the Commissioner may exclude plans with extremely
    limited enrollments.
        (d) Table of Premium Percentage Limits and Actuarial Value
    Percentages Based on Income Tier.--
                (1) In general.--For purposes of this subtitle, the table
            specified in this subsection is as follows:

       In the case of family income
     (expressed as a percent of FPL)      The initial premium         The final premium        The actuarial value
    within the following income tier:       percentage is--            percentage is--           percentage is--

    133% through 150%                  1.5%                       3%                        97%
    150% through 200%                  3%                         5%                        93%
    200% through 250%                  5%                         7%                        85%
    250% through 300%                  7%                         9%                        78%
    300% through 350%                  9%                         10%                       72%
    350% through 400%                  10%                  11%                       70%

                (2) Special rules.--For purposes of applying the table
            under paragraph (1)--
                        (A) For lowest level of income.--In the case of an
                    individual with income that does not exceed 133 percent
                    of FPL, the individual shall be considered to have
                    income that is 133% of FPL.
                        (B) Application of higher actuarial value
                    percentage at tier transition points.--If two actuarial
                    value percentages may be determined with respect to an
                    individual, the actuarial value percentage shall be the
                    higher of such percentages.

    SEC. 244. AFFORDABILITY COST-SHARING CREDIT.

        (a) In General.--The affordability cost-sharing credit under this
    section for an affordable credit eligible individual enrolled in an
    Exchange-participating health benefits plan is in the form of the cost-
    sharing reduction described in subsection (b) provided under this
    section for the income tier in which the individual is classified based
    on the individual's family income.
        (b) Cost-sharing Reductions.--The Commissioner shall specify a
    reduction in cost-sharing amounts and the annual limitation on cost-
    sharing specified in section 122(c)(2)(B) under a basic plan for each
    income tier specified in the table under section 243(d), with respect
    to a year, in a manner so that, as estimated by the Commissioner, the
    actuarial value of the coverage with such reduced cost-sharing amounts
    (and the reduced annual cost-sharing limit) is equal to the actuarial
    value percentage (specified in the table under section 243(d) for the
    income tier involved) of the full actuarial value if there were no
    cost-sharing imposed under the plan.
        (c) Determination and Payment of Cost-sharing Affordability
    Credit.--In the case of an affordable credit eligible individual in a
    tier enrolled in an Exchange-participating health benefits plan offered
    by a QHBP offering entity, the Commissioner shall provide for payment
    to the offering entity of an amount equivalent to the increased
    actuarial value of the benefits under the plan provided under section
    203(c)(2)(B) resulting from the reduction in cost-sharing described in
    subsection (b).

    SEC. 245. INCOME DETERMINATIONS.

        (a) In General.--In applying this subtitle for an affordability
    credit for an individual for a plan year, the individual's income shall
    be the income (as defined in section 242(c)) for the individual for the
    most recent taxable year (as determined in accordance with rules of the
    Commissioner). The Federal poverty level applied shall be such level in
    effect as of the date of the application.
        (b) Program Integrity; Income Verification Procedures.--
                (1) Program integrity.--The Commissioner shall take such
            steps as may be appropriate to ensure the accuracy of
            determinations and redeterminations under this subtitle.
                (2) Income verification.--
                        (A) In general.--Upon an initial application of an
                    individual for an affordability credit under this
                    subtitle (or in applying section 242(b)) or upon an
                    application for a change in the affordability credit
                    based upon a significant change in family income
                    described in subparagraph (A)--
                                (i) the Commissioner shall request from the
                            Secretary of the Treasury the disclosure to the
                            Commissioner of such information as may be
                            permitted to verify the information contained
                            in such application; and
                                (ii) the Commissioner shall use the
                            information so disclosed to verify such
                            information.
                        (B) Alternative procedures.--The Commissioner shall
                    establish procedures for the verification of income for
                    purposes of this subtitle if no income tax return is
                    available for the most recent completed tax year.
        (c) Special Rules.--
                (1) Changes in income as a percent of fpl.--In the case
            that an individual's income (expressed as a percentage of the
            Federal poverty level for a family of the size involved) for a
            plan year is expected (in a manner specified by the
            Commissioner) to be significantly different from the income (as
            so expressed) used under subsection (a), the Commissioner shall
            establish rules requiring an individual to report, consistent
            with the mechanism established under paragraph (2), significant
            changes in such income (including a significant change in
            family composition) to the Commissioner and requiring the
            substitution of such income for the income otherwise
            applicable.
                (2) Reporting of significant changes in income.--The
            Commissioner shall establish rules under which an individual
            determined to be an affordable credit eligible individual would
            be required to inform the Commissioner when there is a
            significant change in the family income of the individual
            (expressed as a percentage of the FPL for a family of the size
            involved) and of the information regarding such change. Such
            mechanism shall provide for guidelines that specify the
            circumstances that qualify as a significant change, the
            verifiable information required to document such a change, and
            the process for submission of such information. If the
            Commissioner receives new information from an individual
            regarding the family income of the individual, the Commissioner
            shall provide for a redetermination of the individual's
            eligibility to be an affordable credit eligible individual.
                (3) Transition for chip.--In the case of a child described
            in section 202(d)(2), the Commissioner shall establish rules
            under which the family income of the child is deemed to be no
            greater than the family income of the child as most recently
            determined before Y1 by the State under title XXI of the Social
            Security Act.
                (4) Study of geographic variation in application of fpl.--
            The Commissioner shall examine the feasibility and implication
            of adjusting the application of the Federal poverty level under
            this subtitle for different geographic areas so as to reflect
            the variations in cost-of-living among different areas within
            the United States. If the Commissioner determines that an
            adjustment is feasible, the study should include a methodology
            to make such an adjustment. Not later than the first day of Y2,
            the Commissioner shall submit to Congress a report on such
            study and shall include such recommendations as the
            Commissioner determines appropriate.
        (d) Penalties for Misrepresentation.--In the case of an individual
    intentionally misrepresents family income or the individual fails
    (without regard to intent) to disclose to the Commissioner a
    significant change in family income under subsection (c) in a manner
    that results in the individual becoming an affordable credit eligible
    individual when the individual is not or in the amount of the
    affordability credit exceeding the correct amount--
                (1) the individual is liable for repayment of the amount of
            the improper affordability credit; ;and
                (2) in the case of such an intentional misrepresentation or
            other egregious circumstances specified by the Commissioner,
            the Commissioner may impose an additional penalty.

    SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

        Nothing in this subtitle shall allow Federal payments for
    affordability credits on behalf of individuals who are not lawfully
    present in the United States.

                          Subtitle D--State Innovation

    SEC. 251. WAIVER OF ERISA LIMITATION; APPLICATION INSTEAD OF STATE
                  SINGLE PAYER SYSTEM.

        (a) In General.--A State may request from the Secretary, and the
    Secretary must grant except under extraordinary circumstances, a waiver
    of application of section 514 of the Employee Retirement Income
    Security Act of 1974 with respect to a state single payer system
    enacted into law by such State that would be structured and operate in
    a manner consistent with this subtitle. The Secretary shall provide for
    the revocation of any waiver granted under this section upon a
    determination made by the Secretary that the requirements of the
    preceding sentence are no longer being met.
        (b) Effect of Waiver.--During any period for which a waiver under
    subsection (a) is in effect--
                (1) the provisions of section 514 of the Employee
            Retirement Income Security Act of 1974 shall not apply with
            respect to the State single payer system; and
                (2) the State single payer system shall operate in the
            State instead of the public health insurance option or the
            National Health Exchange.
        (c) Construction.--Nothing in this subtitle shall be construed to
    limit or otherwise affect the transfer and allocation under this
    division of funds to States with single payer systems.

    SEC. 252. REQUIREMENTS.

        A State single payer system shall--
                (1) ) provide benefits that meet or exceed the standards of
            coverage and quality of care set forth in this division; and
                (2) ensure that the cost to the Federal Government
            resulting from the waiver granted under section 261 is neither
            substantially greater nor substantially less than would have
            been the case in the absence of such waiver, except that:
                        (A) the State may seek and benefit from planning
                    and start-up funds with respect to the system; and
                        (B) nothing in this paragraph shall be construed to
                    preclude allowance for normal variations in population
                    demographics, health status, and other factors
                    exogenous to the health care system that may affect
                    differences in costs.

    SEC. 253. DEFINITIONS.

        (a) State Single Payer System.--The term ``State single payer
    system'' means, in connection with a State, a non-profit program of the
    State for providing health care--
                (1) in which a single agency of the State is responsible
            for financing health care benefits for all residents of the
            State and for the administration or supervision of the
            administration of the program;
                (2) under which private insurance duplicating the benefits
            provided in the single payer program is prohibited;
                (3) which provides comprehensive health benefits to all
            residents of the State, and provides measures to assure free
            choice of providers for covered services, to promote quality,
            and to help resolve complaints and disputes between consumers
            and providers; and
                (4) under which participation by health maintenance
            organizations is limited to non-profit health maintenance
            organizations that own their own delivery facilities and employ
            physicians on salary, and funding is limited to services that
            the health maintenance organizations actually deliver; and
                (5) which may be maintained by such State together one or
            more other States in a geographic region.
        (b) Secretary.--The term ``Secretary'' means the Secretary of
    Labor, acting in consultation with the Secretary of Health and Human
    Services.

                        TITLE III--SHARED RESPONSIBILITY

                     Subtitle A--Individual Responsibility

    SEC. 301. INDIVIDUAL RESPONSIBILITY.

        For an individual's responsibility to obtain acceptable coverage,
    see section 59B of the Internal Revenue Code of 1986 (as added by
    section 401 of this division).

                      Subtitle B--Employer Responsibility

               PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        (a) In General.--An employer meets the requirements of this section
    if such employer does all of the following:
                (1) Offer of coverage.--The employer offers each employee
            individual and family coverage under a qualified health
            benefits plan (or under a current employment-based health plan
            (within the meaning of section 102(b))) in accordance with
            section 312.
                (2) Contribution towards coverage.--If an employee accepts
            such offer of coverage, the employer makes timely contributions
            towards such coverage in accordance with section 312.
                (3) Contribution in lieu of coverage.--Beginning with Y2,
            if an employee declines such offer but otherwise obtains
            coverage in an Exchange-participating health benefits plan
            (other than by reason of being covered by family coverage as a
            spouse or dependent of the primary insured), the employer shall
            make a timely contribution to the Health Insurance Exchange
            with respect to each such employee in accordance with section
            313.
        (b)  Hardship Exemption.--Notwithstanding any other provision of
    this part, an employer may, in a form and manner which shall be
    prescribed by the Secretary, apply to the Secretary for a waiver from
    the health coverage participation requirements of this part for any 2-
    year period. The Secretary shall grant the waiver within 30 days after
    submission of the application if the application reasonably
    demonstrates to the Secretary that meeting the requirements of this
    part would result in job losses that would negatively impact the
    employer or the community in which the employer is located.

    SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND
                  DEPENDENT COVERAGE.

        (a) In General.--An employer meets the requirements of this section
    with respect to an employee if the following requirements are met:
                (1) Offering of coverage.--The employer offers the coverage
            described in section 311(1) either through an Exchange-
            participating health benefits plan or other than through such a
            plan.
                (2) Employer required contribution.--The employer timely
            pays to the issuer of such coverage an amount not less than the
            employer required contribution specified in subsection (b) for
            such coverage.
                (3) Provision of information.--The employer provides the
            Health Choices Commissioner, the Secretary of Labor, the
            Secretary of Health and Human Services, and the Secretary of
            the Treasury, as applicable, with such information as the
            Commissioner may require to ascertain compliance with the
            requirements of this section.
                (4) Autoenrollment of employees.--The employer provides for
            autoenrollment of the employee in accordance with subsection
            (c).
        (b) Reduction of Employee Premiums Through Minimum Employer
    Contribution.--
                (1) Full-time employees.--The minimum employer contribution
            described in this subsection for coverage of a full-time
            employee (and, if any, the employee's spouse and qualifying
            children (as defined in section 152(c) of the Internal Revenue
            Code of 1986) under a qualified health benefits plan (or
            current employment-based health plan) is equal to--
                        (A) in case of individual coverage, not less than
                    72.5 percent of the applicable premium (as defined in
                    section 4980B(f)(4) of such Code, subject to paragraph
                    (2)) of the lowest cost plan offered by the employer
                    that is a qualified health benefits plan (or is such
                    current employment-based health plan); and
                        (B) in the case of family coverage which includes
                    coverage of such spouse and children, not less 65
                    percent of such applicable premium of such lowest cost
                    plan.
                (2) Applicable premium for exchange coverage.--In this
            subtitle, the amount of the applicable premium of the lowest
            cost plan with respect to coverage of an employee under an
            Exchange-participating health benefits plan is the reference
            premium amount under section 243(c) for individual coverage
            (or, if elected, family coverage) for the premium rating area
            in which the individual or family resides.
                (3) Minimum employer contribution for employees other than
            full-time employees.--In the case of coverage for an employee
            who is not a full-time employee, the amount of the minimum
            employer contribution under this subsection shall be a
            proportion (as determined in accordance with rules of the
            Health Choices Commissioner, the Secretary of Labor, the
            Secretary of Health and Human Services, and the Secretary of
            the Treasury, as applicable) of the minimum employer
            contribution under this subsection with respect to a full-time
            employee that reflects the proportion of--
                        (A) the average weekly hours of employment of the
                    employee by the employer, to
                        (B) the minimum weekly hours specified by the
                    Commissioner for an employee to be a full-time
                    employee.
                (4) Salary reductions not treated as employer
            contributions.--For purposes of this section, any contribution
            on behalf of an employee with respect to which there is a
            corresponding reduction in the compensation of the employee
            shall not be treated as an amount paid by the employer.
        (c) Automatic Enrollment for Employer Sponsored Health Benefits.--
                (1) In general.--The requirement of this subsection with
            respect to an employer and an employee is that the employer
            automatically enrolls such employee into the employment-based
            health benefits plan for individual coverage under the plan
            option with the lowest applicable employee premium.
                (2) Opt-out.--In no case may an employer automatically
            enroll an employee in a plan under paragraph (1) if such
            employee makes an affirmative election to opt out of such plan
            or to elect coverage under an employment-based health benefits
            plan offered by such employer. An employer shall provide an
            employee with a 30-day period to make such an affirmative
            election before the employer may automatically enroll the
            employee in such a plan.
                (3) Notice requirements.--
                        (A) In general.--Each employer described in
                    paragraph (1) who automatically enrolls an employee
                    into a plan as described in such paragraph shall
                    provide the employees, within a reasonable period
                    before the beginning of each plan year (or, in the case
                    of new employees, within a reasonable period before the
                    end of the enrollment period for such a new employee),
                    written notice of the employees' rights and obligations
                    relating to the automatic enrollment requirement under
                    such paragraph. Such notice must be comprehensive and
                    understood by the average employee to whom the
                    automatic enrollment requirement applies.
                        (B) Inclusion of specific information.--The written
                    notice under subparagraph (A) must explain an
                    employee's right to opt out of being automatically
                    enrolled in a plan and in the case that more than one
                    level of benefits or employee premium level is offered
                    by the employer involved, the notice must explain which
                    level of benefits and employee premium level the
                    employee will be automatically enrolled in the absence
                    of an affirmative election by the employee.

    SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.

        (a) In General.--A contribution is made in accordance with this
    section with respect to an employee if such contribution is equal to an
    amount equal to 8 percent of the average wages paid by the employer
    during the period of enrollment (determined by taking into account all
    employees of the employer and in such manner as the Commissioner
    provides, including rules providing for the appropriate aggregation of
    related employers). Any such contribution--
                (1) shall be paid to the Health Choices Commissioner for
            deposit into the Health Insurance Exchange Trust Fund, and
                (2) shall not be applied against the premium of the
            employee under the Exchange-participating health benefits plan
            in which the employee is enrolled.
        (b) Special Rules for Small Employers.--
                (1) In general.--In the case of any employer who is a small
            employer for any calendar year, subsection (a) shall be applied
            by substituting the applicable percentage determined in
            accordance with the following table for ``8 percent'':

    If the annual payroll of such employer   The applicable percentage is:
     for the preceding calendar year:
      Does not exceed $250,000.............  0 percent
      Exceeds $250,000, but does not exceed  2 percent
       $300,000.
      Exceeds $300,000, but does not exceed  4 percent
       $350,000.
      Exceeds $350,000, but does not exceed  6 percent
       $400,000.

                (2) Small employer.--For purposes of this subsection, the
            term ``small employer'' means any employer for any calendar
            year if the annual payroll of such employer for the preceding
            calendar year does not exceed $400,000.
                (3) Annual payroll.--For purposes of this paragraph, the
            term ``annual payroll'' means, with respect to any employer for
            any calendar year, the aggregate wages paid by the employer
            during such calendar year.
                (4) Aggregation rules.--Related employers and predecessors
            shall be treated as a single employer for purposes of this
            subsection.

    SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.

        The Health Choices Commissioner (in coordination with the Secretary
    of Labor, the Secretary of Health and Human Services, and the Secretary
    of the Treasury) shall have authority to set standards for determining
    whether employers or insurers are undertaking any actions to affect the
    risk pool within the Health Insurance Exchange by inducing individuals
    to decline coverage under a qualified health benefits plan (or current
    employment-based health plan (within the meaning of section 102(b))
    offered by the employer and instead to enroll in an Exchange-
    participating health benefits plan. An employer violating such
    standards shall be treated as not meeting the requirements of this
    section.

       PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
                  1974.

        (a) In General.--Subtitle B of title I of the Employee Retirement
    Income Security Act of 1974 is amended by adding at the end the
    following new part:

         ``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

    ``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH
                  COVERAGE PARTICIPATION REQUIREMENTS.

        ``(a) In General.--An employer may make an election with the
    Secretary to be subject to the health coverage participation
    requirements.
        ``(b) Time and Manner.--An election under subsection (a) may be
    made at such time and in such form and manner as the Secretary may
    prescribe.

    ``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.

        ``(a) In General.--If an employer makes an election to the
    Secretary under section 801--
                ``(1) such election shall be treated as the establishment
            and maintenance of a group health plan (as defined in section
            733(a)) for purposes of this title, subject to section 151 of
            the America's Affordable Health Choices Act of 2009, and
                ``(2) the health coverage participation requirements shall
            be deemed to be included as terms and conditions of such plan.
        ``(b) Periodic Investigations to Discover Noncompliance.--The
    Secretary shall regularly audit a representative sampling of employers
    and group health plans and conduct investigations and other activities
    under section 504 with respect to such sampling of plans so as to
    discover noncompliance with the health coverage participation
    requirements in connection with such plans. The Secretary shall
    communicate findings of noncompliance made by the Secretary under this
    subsection to the Secretary of the Treasury and the Health Choices
    Commissioner. The Secretary shall take such timely enforcement action
    as appropriate to achieve compliance.
        ``(c) Recordkeeping.--To facilitate the audits described in
    subsection (b), the Secretary shall promulgate recordkeeping
    requirements for employers to account for both employees of the
    employer and individuals whom the employer has not treated as employees
    of the employer but with whom the employer, in the course of the trade
    or business in which the employer is engaged, has engaged for the
    performance of labor or services.

    ``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        ``For purposes of this part, the term `health coverage
    participation requirements' means the requirements of part 1 of
    subtitle B of title III of subdivision A of America's Affordable Health
    Choices Act of 2009 (as in effect on the date of the enactment of such
    Act).

    ``SEC. 804. RULES FOR APPLYING REQUIREMENTS.

        ``(a) Affiliated Groups.--In the case of any employer which is part
    of a group of employers who are treated as a single employer under
    subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue
    Code of 1986, the election under section 801 shall be made by such
    employer as the Secretary may provide. Any such election, once made,
    shall apply to all members of such group.
        ``(b) Separate Elections.--Under regulations prescribed by the
    Secretary, separate elections may be made under section 801 with
    respect to--
                ``(1) separate lines of business, and
                ``(2) full-time employees and employees who are not full-
            time employees.

    ``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
                  NONCOMPLIANCE.

        ``The Secretary may terminate the election of any employer under
    section 801 if the Secretary (in coordination with the Health Choices
    Commissioner) determines that such employer is in substantial
    noncompliance with the health coverage participation requirements and
    shall refer any such determination to the Secretary of the Treasury as
    appropriate.

    ``SEC. 806. REGULATIONS.

        ``The Secretary may promulgate such regulations as may be necessary
    or appropriate to carry out the provisions of this part, in accordance
    with section 324(a) of the America's Affordable Health Choices Act of
    2009. The Secretary may promulgate any interim final rules as the
    Secretary determines are appropriate to carry out this part.''.
        (b) Enforcement of Health Coverage Participation Requirements.--
    Section 502 of such Act (29 U.S.C. 1132) is amended--
                (1) in subsection (a)(6), by striking ``paragraph'' and all
            that follows through ``subsection (c)'' and inserting
            ``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of
            subsection (c)''; and
                (2) in subsection (c), by redesignating the second
            paragraph (10) as paragraph (12) and by inserting after the
            first paragraph (10) the following new paragraph:
                ``(11) Health coverage participation requirements.--
                        ``(A) Civil penalties.--In the case of any employer
                    who fails (during any period with respect to which an
                    election under section 801(a) is in effect) to satisfy
                    the health coverage participation requirements with
                    respect to any employee, the Secretary may assess a
                    civil penalty against the employer of $100 for each day
                    in the period beginning on the date such failure first
                    occurs and ending on the date such failure is
                    corrected.
                        ``(B) Health coverage participation requirements.--
                    For purposes of this paragraph, the term `health
                    coverage participation requirements' has the meaning
                    provided in section 803.
                        ``(C) Limitations on amount of penalty.--
                                ``(i) Penalty not to apply where failure
                            not discovered exercising reasonable
                            diligence.--No penalty shall be assessed under
                            subparagraph (A) with respect to any failure
                            during any period for which it is established
                            to the satisfaction of the Secretary that the
                            employer did not know, or exercising reasonable
                            diligence would not have known, that such
                            failure existed.
                                ``(ii) Penalty not to apply to failures
                            corrected within 30 days.--No penalty shall be
                            assessed under subparagraph (A) with respect to
                            any failure if--
                                        ``(I) such failure was due to
                                    reasonable cause and not to willful
                                    neglect, and
                                        ``(II) such failure is corrected
                                    during the 30-day period beginning on
                                    the 1st date that the employer knew, or
                                    exercising reasonable diligence would
                                    have known, that such failure existed.
                                ``(iii) Overall limitation for
                            unintentional failures.--In the case of
                            failures which are due to reasonable cause and
                            not to willful neglect, the penalty assessed
                            under subparagraph (A) for failures during any
                            1-year period shall not exceed the amount equal
                            to the lesser of--
                                        ``(I) 10 percent of the aggregate
                                    amount paid or incurred by the employer
                                    (or predecessor employer) during the
                                    preceding 1-year period for group
                                    health plans, or
                                        ``(II) $500,000.
                        ``(D) Advance notification of failure prior to
                    assessment.--Before a reasonable time prior to the
                    assessment of any penalty under this paragraph with
                    respect to any failure by an employer, the Secretary
                    shall inform the employer in writing of such failure
                    and shall provide the employer information regarding
                    efforts and procedures which may be undertaken by the
                    employer to correct such failure.
                        ``(E) Coordination with excise tax.--Under
                    regulations prescribed in accordance with section 324
                    of the America's Affordable Health Choices Act of 2009,
                    the Secretary and the Secretary of the Treasury shall
                    coordinate the assessment of penalties under this
                    section in connection with failures to satisfy health
                    coverage participation requirements with the imposition
                    of excise taxes on such failures under section 4980H(b)
                    of the Internal Revenue Code of 1986 so as to avoid
                    duplication of penalties with respect to such failures.
                        ``(F) Deposit of penalty collected.--Any amount of
                    penalty collected under this paragraph shall be
                    deposited as miscellaneous receipts in the Treasury of
                    the United States.''.
        (c) Clerical Amendments.--The table of contents in section 1 of
    such Act is amended by inserting after the item relating to section 734
    the following new items:

         ``Part 8--National Health Coverage Participation Requirements

    ``Sec. ?801.?Election of employer to be subject to national health
                                coverage participation requirements.
    ``Sec. ?802.?Treatment of coverage resulting from election.
    ``Sec. ?803.?Health coverage participation requirements.
    ``Sec. ?804.?Rules for applying requirements.
    ``Sec. ?805.?Termination of election in cases of substantial
                                noncompliance.
    ``Sec. ?806.?Regulations. ''.
        (d) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE INTERNAL REVENUE CODE OF 1986.

        (a) Failure To Elect, or Substantially Comply With, Health Coverage
    Participation Requirements.--For employment tax on employers who fail
    to elect, or substantially comply with, the health coverage
    participation requirements described in part 1, see section 3111(c) of
    the Internal Revenue Code of 1986 (as added by section 412 of this
    division).
        (b) Other Failures.--For excise tax on other failures of electing
    employers to comply with such requirements, see section 4980H of the
    Internal Revenue Code of 1986 (as added by section 411 of this
    division).

    SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
                  UNDER THE PUBLIC HEALTH SERVICE ACT.

        (a) In General.--Part C of title XXVII of the Public Health Service
    Act is amended by adding at the end the following new section:

    ``SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

        ``(a) Election of Employer To Be Subject to National Health
    Coverage Participation Requirements.--
                ``(1) In general.--An employer may make an election with
            the Secretary to be subject to the health coverage
            participation requirements.
                ``(2) Time and manner.--An election under paragraph (1) may
            be made at such time and in such form and manner as the
            Secretary may prescribe.
        ``(b) Treatment of Coverage Resulting From Election.--
                ``(1) In general.--If an employer makes an election to the
            Secretary under subsection (a)--
                        ``(A) such election shall be treated as the
                    establishment and maintenance of a group health plan
                    for purposes of this title, subject to section 151 of
                    the America's Affordable Health Choices Act of 2009,
                    and
                        ``(B) the health coverage participation
                    requirements shall be deemed to be included as terms
                    and conditions of such plan.
                ``(2) Periodic investigations to determine compliance with
            health coverage participation requirements.--The Secretary
            shall regularly audit a representative sampling of employers
            and conduct investigations and other activities with respect to
            such sampling of employers so as to discover noncompliance with
            the health coverage participation requirements in connection
            with such employers (during any period with respect to which an
            election under subsection (a) is in effect). The Secretary
            shall communicate findings of noncompliance made by the
            Secretary under this subsection to the Secretary of the
            Treasury and the Health Choices Commissioner. The Secretary
            shall take such timely enforcement action as appropriate to
            achieve compliance.
        ``(c) Health Coverage Participation Requirements.--For purposes of
    this section, the term `health coverage participation requirements'
    means the requirements of part 1 of subtitle B of title III of
    subdivision A of the America's Affordable Health Choices Act of 2009
    (as in effect on the date of the enactment of this section).
        ``(d) Separate Elections.--Under regulations prescribed by the
    Secretary, separate elections may be made under subsection (a) with
    respect to full-time employees and employees who are not full-time
    employees.
        ``(e) Termination of Election in Cases of Substantial
    Noncompliance.--The Secretary may terminate the election of any
    employer under subsection (a) if the Secretary (in coordination with
    the Health Choices Commissioner) determines that such employer is in
    substantial noncompliance with the health coverage participation
    requirements and shall refer any such determination to the Secretary of
    the Treasury as appropriate.
        ``(f) Enforcement of Health Coverage Participation Requirements.--
                ``(1) Civil penalties.--In the case of any employer who
            fails (during any period with respect to which the election
            under subsection (a) is in effect) to satisfy the health
            coverage participation requirements with respect to any
            employee, the Secretary may assess a civil penalty against the
            employer of $100 for each day in the period beginning on the
            date such failure first occurs and ending on the date such
            failure is corrected.
                ``(2) Limitations on amount of penalty.--
                        ``(A) Penalty not to apply where failure not
                    discovered exercising reasonable diligence.--No penalty
                    shall be assessed under paragraph (1) with respect to
                    any failure during any period for which it is
                    established to the satisfaction of the Secretary that
                    the employer did not know, or exercising reasonable
                    diligence would not have known, that such failure
                    existed.
                        ``(B) Penalty not to apply to failures corrected
                    within 30 days.--No penalty shall be assessed under
                    paragraph (1) with respect to any failure if--
                                ``(i) such failure was due to reasonable
                            cause and not to willful neglect, and
                                ``(ii) such failure is corrected during the
                            30-day period beginning on the 1st date that
                            the employer knew, or exercising reasonable
                            diligence would have known, that such failure
                            existed.
                        ``(C) Overall limitation for unintentional
                    failures.--In the case of failures which are due to
                    reasonable cause and not to willful neglect, the
                    penalty assessed under paragraph (1) for failures
                    during any 1-year period shall not exceed the amount
                    equal to the lesser of--
                                ``(i) 10 percent of the aggregate amount
                            paid or incurred by the employer (or
                            predecessor employer) during the preceding
                            taxable year for group health plans, or
                                ``(ii) $500,000.
                ``(3) Advance notification of failure prior to
            assessment.--Before a reasonable time prior to the assessment
            of any penalty under paragraph (1) with respect to any failure
            by an employer, the Secretary shall inform the employer in
            writing of such failure and shall provide the employer
            information regarding efforts and procedures which may be
            undertaken by the employer to correct such failure.
                ``(4) Actions to enforce assessments.--The Secretary may
            bring a civil action in any District Court of the United States
            to collect any civil penalty under this subsection.
                ``(5) Coordination with excise tax.--Under regulations
            prescribed in accordance with section 324 of the America's
            Affordable Health Choices Act of 2009, the Secretary and the
            Secretary of the Treasury shall coordinate the assessment of
            penalties under paragraph (1) in connection with failures to
            satisfy health coverage participation requirements with the
            imposition of excise taxes on such failures under section
            4980H(b) of the Internal Revenue Code of 1986 so as to avoid
            duplication of penalties with respect to such failures.
                ``(6) Deposit of penalty collected.--Any amount of penalty
            collected under this subsection shall be deposited as
            miscellaneous receipts in the Treasury of the United States.
        ``(g) Regulations.--The Secretary may promulgate such regulations
    as may be necessary or appropriate to carry out the provisions of this
    section, in accordance with section 324(a) of the America's Affordable
    Health Choices Act of 2009. The Secretary may promulgate any interim
    final rules as the Secretary determines are appropriate to carry out
    this section.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to periods beginning after December 31, 2012.

    SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

        (a) Assuring Coordination.--The officers consisting of the
    Secretary of Labor, the Secretary of the Treasury, the Secretary of
    Health and Human Services, and the Health Choices Commissioner shall
    ensure, through the execution of an interagency memorandum of
    understanding among such officers, that--
                (1) regulations, rulings, and interpretations issued by
            such officers relating to the same matter over which two or
            more of such officers have responsibility under subpart B of
            part 6 of subtitle B of title I of the Employee Retirement
            Income Security Act of 1974, section 4980H of the Internal
            Revenue Code of 1986, and section 2793 of the Public Health
            Service Act are administered so as to have the same effect at
            all times; and
                (2) coordination of policies relating to enforcing the same
            requirements through such officers in order to have a
            coordinated enforcement strategy that avoids duplication of
            enforcement efforts and assigns priorities in enforcement.
        (b) Multiemployer Plans.--In the case of a group health plan that
    is a multiemployer plan (as defined in section 3(37) of the Employee
    Retirement Income Security Act of 1974), the regulations prescribed in
    accordance with subsection (a) by the officers referred to in
    subsection (a) shall provide for the application of the health coverage
    participation requirements to the plan sponsor and contributing
    sponsors of such plan.

             TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

                       Subtitle A--Shared Responsibility

                       PART 1--INDIVIDUAL RESPONSIBILITY

    SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

        (a) In General.--Subchapter A of chapter 1 of the Internal Revenue
    Code of 1986 is amended by adding at the end the following new part:

                     ``PART VIII--HEALTH CARE RELATED TAXES

        ``subpart a. tax on individuals without acceptable health care
                                   coverage.

    ``Subpart A--Tax on Individuals Without Acceptable Health Care Coverage

    ``Sec. ?59B.?Tax on individuals without acceptable health care
                                coverage.

    ``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

        ``(a) Tax Imposed.--In the case of any individual who does not meet
    the requirements of subsection (d) at any time during the taxable year,
    there is hereby imposed a tax equal to 2.5 percent of the excess of--
                ``(1) the taxpayer's modified adjusted gross income for the
            taxable year, over
                ``(2) the amount of gross income specified in section
            6012(a)(1) with respect to the taxpayer.
        ``(b) Limitations.--
                ``(1) Tax limited to average premium.--
                        ``(A) In general.--The tax imposed under subsection
                    (a) with respect to any taxpayer for any taxable year
                    shall not exceed the applicable national average
                    premium for such taxable year.
                        ``(B) Applicable national average premium.--
                                ``(i) In general.--For purposes of
                            subparagraph (A), the `applicable national
                            average premium' means, with respect to any
                            taxable year, the average premium (as
                            determined by the Secretary, in coordination
                            with the Health Choices Commissioner) for self-
                            only coverage under a basic plan which is
                            offered in a Health Insurance Exchange for the
                            calendar year in which such taxable year
                            begins.
                                ``(ii) Failure to provide coverage for more
                            than one individual.--In the case of any
                            taxpayer who fails to meet the requirements of
                            subsection (e) with respect to more than one
                            individual during the taxable year, clause (i)
                            shall be applied by substituting `family
                            coverage' for `self-only coverage'.
                ``(2) Proration for part year failures.--The tax imposed
            under subsection (a) with respect to any taxpayer for any
            taxable year shall not exceed the amount which bears the same
            ratio to the amount of tax so imposed (determined without
            regard to this paragraph and after application of paragraph
            (1)) as--
                        ``(A) the aggregate periods during such taxable
                    year for which such individual failed to meet the
                    requirements of subsection (d), bears to
                        ``(B) the entire taxable year.
        ``(c) Exceptions.--
                ``(1) Dependents.--Subsection (a) shall not apply to any
            individual for any taxable year if a deduction is allowable
            under section 151 with respect to such individual to another
            taxpayer for any taxable year beginning in the same calendar
            year as such taxable year.
                ``(2) Nonresident aliens.--Subsection (a) shall not apply
            to any individual who is a nonresident alien.
                ``(3) Individuals residing outside united states.--Any
            qualified individual (as defined in section 911(d)) (and any
            qualifying child residing with such individual) shall be
            treated for purposes of this section as covered by acceptable
            coverage during the period described in subparagraph (A) or (B)
            of section 911(d)(1), whichever is applicable.
                ``(4) Individuals residing in possessions of the united
            states.--Any individual who is a bona fide resident of any
            possession of the United States (as determined under section
            937(a)) for any taxable year (and any qualifying child residing
            with such individual) shall be treated for purposes of this
            section as covered by acceptable coverage during such taxable
            year.
                ``(5) Religious conscience exemption.--
                        ``(A) In general.--Subsection (a) shall not apply
                    to any individual (and any qualifying child residing
                    with such individual) for any period if such individual
                    has in effect an exemption which certifies that such
                    individual is a member of a recognized religious sect
                    or division thereof described in section 1402(g)(1) and
                    an adherent of established tenets or teachings of such
                    sect or division as described in such section.
                        ``(B) Exemption.--An application for the exemption
                    described in subparagraph (A) shall be filed with the
                    Secretary at such time and in such form and manner as
                    the Secretary may prescribe. Any such exemption granted
                    by the Secretary shall be effective for such period as
                    the Secretary determines appropriate.
        ``(d) Acceptable Coverage Requirement.--
                ``(1) In general.--The requirements of this subsection are
            met with respect to any individual for any period if such
            individual (and each qualifying child of such individual) is
            covered by acceptable coverage at all times during such period.
                ``(2) Acceptable coverage.--For purposes of this section,
            the term `acceptable coverage' means any of the following:
                        ``(A) Qualified health benefits plan coverage.--
                    Coverage under a qualified health benefits plan (as
                    defined in section 100(c) of the America's Affordable
                    Health Choices Act of 2009).
                        ``(B) Grandfathered health insurance coverage;
                    coverage under grandfathered employment-based health
                    plan.--Coverage under a grandfathered health insurance
                    coverage (as defined in subsection (a) of section 102
                    of the America's Affordable Health Choices Act of 2009)
                    or under a current employment-based health plan (within
                    the meaning of subsection (b) of such section).
                        ``(C) Medicare.--Coverage under part A of title
                    XVIII of the Social Security Act.
                        ``(D) Medicaid.--Coverage for medical assistance
                    under title XIX of the Social Security Act.
                        ``(E) Members of the armed forces and dependents
                    (including tricare).--Coverage under chapter 55 of
                    title 10, United States Code, including similar
                    coverage furnished under section 1781 of title 38 of
                    such Code.
                        ``(F) VA.--Coverage under the veteran's health care
                    program under chapter 17 of title 38, United States
                    Code, but only if the coverage for the individual
                    involved is determined by the Secretary in coordination
                    with the Health Choices Commissioner to be not less
                    than the level specified by the Secretary of the
                    Treasury, in coordination with the Secretary of
                    Veteran's Affairs and the Health Choices Commissioner,
                    based on the individual's priority for services as
                    provided under section 1705(a) of such title.
                        ``(G) Other coverage.--Such other health benefits
                    coverage as the Secretary, in coordination with the
                    Health Choices Commissioner, recognizes for purposes of
                    this subsection.
        ``(e) Other Definitions and Special Rules.--
                ``(1) Qualifying child.--For purposes of this section, the
            term `qualifying child' has the meaning given such term by
            section 152(c).
                ``(2) Basic plan.--For purposes of this section, the term
            `basic plan' has the meaning given such term under section
            100(c) of the America's Affordable Health Choices Act of 2009.
                ``(3) Health insurance exchange.--For purposes of this
            section, the term `Health Insurance Exchange' has the meaning
            given such term under section 100(c) of the America's
            Affordable Health Choices Act of 2009, including any State-
            based health insurance exchange approved for operation under
            section 208 of such Act.
                ``(4) Family coverage.--For purposes of this section, the
            term `family coverage' means any coverage other than self-only
            coverage.
                ``(5) Modified adjusted gross income.--For purposes of this
            section, the term `modified adjusted gross income' means
            adjusted gross income--
                        ``(A) determined without regard to section 911, and
                        ``(B) increased by the amount of interest received
                    or accrued by the taxpayer during the taxable year
                    which is exempt from tax.
                ``(6) Not treated as tax imposed by this chapter for
            certain purposes.--The tax imposed under this section shall not
            be treated as tax imposed by this chapter for purposes of
            determining the amount of any credit under this chapter or for
            purposes of section 55.
        ``(f) Regulations.--The Secretary shall prescribe such regulations
    or other guidance as may be necessary or appropriate to carry out the
    purposes of this section, including regulations or other guidance
    (developed in coordination with the Health Choices Commissioner) which
    provide--
                ``(1) exemption from the tax imposed under subsection (a)
            in cases of de minimis lapses of acceptable coverage, and
                ``(2) a process for applying for a waiver of the
            application of subsection (a) in cases of hardship.''.
        (b) Information Reporting.--
                (1) In general.--Subpart B of part III of subchapter A of
            chapter 61 of such Code is amended by inserting after section
            6050W the following new section:

    ``SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.

        ``(a) Requirement of Reporting.--Every person who provides
    acceptable coverage (as defined in section 59B(d)) to any individual
    during any calendar year shall, at such time as the Secretary may
    prescribe, make the return described in subsection (b) with respect to
    such individual.
        ``(b) Form and Manner of Returns.--A return is described in this
    subsection if such return--
                ``(1) is in such form as the Secretary may prescribe, and
                ``(2) contains--
                        ``(A) the name, address, and TIN of the primary
                    insured and the name of each other individual obtaining
                    coverage under the policy,
                        ``(B) the period for which each such individual was
                    provided with the coverage referred to in subsection
                    (a), and
                        ``(C) such other information as the Secretary may
                    require.
        ``(c) Statements To Be Furnished to Individuals With Respect to
    Whom Information Is Required.--Every person required to make a return
    under subsection (a) shall furnish to each primary insured whose name
    is required to be set forth in such return a written statement
    showing--
                ``(1) the name and address of the person required to make
            such return and the phone number of the information contact for
            such person, and
                ``(2) the information required to be shown on the return
            with respect to such individual.
    The written statement required under the preceding sentence shall be
    furnished on or before January 31 of the year following the calendar
    year for which the return under subsection (a) is required to be made.
        ``(d) Coverage Provided by Governmental Units.--In the case of
    coverage provided by any governmental unit or any agency or
    instrumentality thereof, the officer or employee who enters into the
    agreement to provide such coverage (or the person appropriately
    designated for purposes of this section) shall make the returns and
    statements required by this section.''.
                (2) Penalty for failure to file.--
                        (A) Return.--Subparagraph (B) of section 6724(d)(1)
                    of such Code is amended by striking ``or'' at the end
                    of clause (xxii), by striking ``and'' at the end of
                    clause (xxiii) and inserting ``or'', and by adding at
                    the end the following new clause:
                                ``(xxiv) section 6050X (relating to returns
                            relating to health insurance coverage), and''.
                        (B) Statement.--Paragraph (2) of section 6724(d) of
                    such Code is amended by striking ``or'' at the end of
                    subparagraph (EE), by striking the period at the end of
                    subparagraph (FF) and inserting ``, or'', and by
                    inserting after subparagraph (FF) the following new
                    subparagraph:
                        ``(GG) section 6050X (relating to returns relating
                    to health insurance coverage).''.
        (c) Return Requirement.--Subsection (a) of section 6012 of such
    Code is amended by inserting after paragraph (9) the following new
    paragraph:
                ``(10) Every individual to whom section 59B(a) applies and
            who fails to meet the requirements of section 59B(d) with
            respect to such individual or any qualifying child (as defined
            in section 152(c)) of such individual.''.
        (d) Clerical Amendments.--
                (1) The table of parts for subchapter A of chapter 1 of the
            Internal Revenue Code of 1986 is amended by adding at the end
            the following new item:

                   ``Part VIII. Health Care Related Taxes.''.

                (2) The table of sections for subpart B of part III of
            subchapter A of chapter 61 is amended by adding at the end the
            following new item:

    ``Sec. ?6050X.?Returns relating to health insurance coverage.''.
        (e) Section 15 Not To Apply.--The amendment made by subsection (a)
    shall not be treated as a change in a rate of tax for purposes of
    section 15 of the Internal Revenue Code of 1986.
        (f) Effective Date.--
                (1) In general.--The amendments made by this section shall
            apply to taxable years beginning after December 31, 2012.
                (2) Returns.--The amendments made by subsection (b) shall
            apply to calendar years beginning after December 31, 2012.

                        PART 2--EMPLOYER RESPONSIBILITY

    SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

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

    ``SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION
                  REQUIREMENTS.

        ``(a) Election of Employer Responsibility To Provide Health
    Coverage.--
                ``(1) In general.--Subsection (b) shall apply to any
            employer with respect to whom an election under paragraph (2)
            is in effect.
                ``(2) Time and manner.--An employer may make an election
            under this paragraph at such time and in such form and manner
            as the Secretary may prescribe.
                ``(3) Affiliated groups.--In the case of any employer which
            is part of a group of employers who are treated as a single
            employer under subsection (b), (c), (m), or (o) of section 414,
            the election under paragraph (2) shall be made by such person
            as the Secretary may provide. Any such election, once made,
            shall apply to all members of such group.
                ``(4) Separate elections.--Under regulations prescribed by
            the Secretary, separate elections may be made under paragraph
            (2) with respect to--
                        ``(A) separate lines of business, and
                        ``(B) full-time employees and employees who are not
                    full-time employees.
                ``(5) Termination of election in cases of substantial
            noncompliance.--The Secretary may terminate the election of any
            employer under paragraph (2) if the Secretary (in coordination
            with the Health Choices Commissioner) determines that such
            employer is in substantial noncompliance with the health
            coverage participation requirements.
        ``(b) Excise Tax With Respect to Failure To Meet Health Coverage
    Participation Requirements.--
                ``(1) In general.--In the case of any employer who fails
            (during any period with respect to which the election under
            subsection (a) is in effect) to satisfy the health coverage
            participation requirements with respect to any employee to whom
            such election applies, there is hereby imposed on each such
            failure with respect to each such employee a tax of $100 for
            each day in the period beginning on the date such failure first
            occurs and ending on the date such failure is corrected.
                ``(2) Limitations on amount of tax.--
                        ``(A) Tax not to apply where failure not discovered
                    exercising reasonable diligence.--No tax shall be
                    imposed by paragraph (1) on any failure during any
                    period for which it is established to the satisfaction
                    of the Secretary that the employer neither knew, nor
                    exercising reasonable diligence would have known, that
                    such failure existed.
                        ``(B) Tax not to apply to failures corrected within
                    30 days.--No tax shall be imposed by paragraph (1) on
                    any failure if--
                                ``(i) such failure was due to reasonable
                            cause and not to willful neglect, and
                                ``(ii) such failure is corrected during the
                            30-day period beginning on the 1st date that
                            the employer knew, or exercising reasonable
                            diligence would have known, that such failure
                            existed.
                        ``(C) Overall limitation for unintentional
                    failures.--In the case of failures which are due to
                    reasonable cause and not to willful neglect, the tax
                    imposed by subsection (a) for failures during the
                    taxable year of the employer shall not exceed the
                    amount equal to the lesser of--
                                ``(i) 10 percent of the aggregate amount
                            paid or incurred by the employer (or
                            predecessor employer) during the preceding
                            taxable year for employment-based health plans,
                            or
                                ``(ii) $500,000.
                        ``(D) Coordination with other enforcement
                    provisions.--The tax imposed under paragraph (1) with
                    respect to any failure shall be reduced (but not below
                    zero) by the amount of any civil penalty collected
                    under section 502(c)(11) of the Employee Retirement
                    Income Security Act of 1974 or section 2793(g) of the
                    Public Health Service Act with respect to such failure.
        ``(c) Health Coverage Participation Requirements.--For purposes of
    this section, the term `health coverage participation requirements'
    means the requirements of part I of subtitle B of title III of the
    America's Affordable Health Choices Act of 2009 (as in effect on the
    date of the enactment of this section).''.
        (b) Clerical Amendment.--The table of sections for chapter 43 of
    such Code is amended by adding at the end the following new item:

    ``Sec. ?4980H.?Election to satisfy health coverage participation
                                requirements.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.

        (a) In General.--Section 3111 of the Internal Revenue Code of 1986
    is amended by redesignating subsection (c) as subsection (d) and by
    inserting after subsection (b) the following new subsection:
        ``(c) Employers Electing to Not Provide Health Benefits.--
                ``(1) In general.--In addition to other taxes, there is
            hereby imposed on every nonelecting employer an excise tax,
            with respect to having individuals in his employ, equal to 8
            percent of the wages (as defined in section 3121(a)) paid by
            him with respect to employment (as defined in section 3121(b)).
                ``(2) Special rules for small employers.--
                        ``(A) In general.--In the case of any employer who
                    is small employer for any calendar year, paragraph (1)
                    shall be applied by substituting the applicable
                    percentage determined in accordance with the following
                    table for `8 percent':

    ``If the annual payroll of such          The applicable percentage is:
     employer for the preceding calendar
     year:
      Does not exceed $250,000.............  0 percent
      Exceeds $250,000, but does not exceed  2 percent
       $300,000.
      Exceeds $300,000, but does not exceed  4 percent
       $350,000.
      Exceeds $350,000, but does not exceed  6 percent
       $400,000.

                        ``(B) Small employer.--For purposes of this
                    paragraph, the term `small employer' means any employer
                    for any calendar year if the annual payroll of such
                    employer for the preceding calendar year does not
                    exceed $400,000.
                        ``(C) Annual payroll.--For purposes of this
                    paragraph, the term `annual payroll' means, with
                    respect to any employer for any calendar year, the
                    aggregate wages (as defined in section 3121(a)) paid by
                    him with respect to employment (as defined in section
                    3121(b)) during such calendar year.
                ``(3) Nonelecting employer.--For purposes of paragraph (1),
            the term `nonelecting employer' means any employer for any
            period with respect to which such employer does not have an
            election under section 4980H(a) in effect.
                ``(4) Special rule for separate elections.--In the case of
            an employer who makes a separate election described in section
            4980H(a)(4) for any period, paragraph (1) shall be applied for
            such period by taking into account only the wages paid to
            employees who are not subject to such election.
                ``(5) Aggregation; predecessors.--For purposes of this
            subsection--
                        ``(A) all persons treated as a single employer
                    under subsection (b), (c), (m), or (o) of section 414
                    shall be treated as 1 employer, and
                        ``(B) any reference to any person shall be treated
                    as including a reference to any predecessor of such
                    person.''.
        (b) Definitions.--Section 3121 of such Code is amended by adding at
    the end the following new subsection:
        ``(aa) Special Rules for Tax on Employers Electing Not To Provide
    Health Benefits.--For purposes of section 3111(c)--
                ``(1) Paragraphs (1), (5), and (19) of subsection (b) shall
            not apply.
                ``(2) Paragraph (7) of subsection (b) shall apply by
            treating all services as not covered by the retirement systems
            referred to in subparagraphs (C) and (F) thereof.
                ``(3) Subsection (e) shall not apply and the term `State'
            shall include the District of Columbia.''.
        (c) Conforming Amendment.--Subsection (d) of section 3111 of such
    Code, as redesignated by this section, is amended by striking ``this
    section'' and inserting ``subsections (a) and (b)''.
        (d) Application to Railroads.--
                (1) In general.--Section 3221 of such Code is amended by
            redesignating subsection (c) as subsection (d) and by inserting
            after subsection (b) the following new subsection:
        ``(c) Employers Electing to Not Provide Health Benefits.--
                ``(1) In general.--In addition to other taxes, there is
            hereby imposed on every nonelecting employer an excise tax,
            with respect to having individuals in his employ, equal to 8
            percent of the compensation paid during any calendar year by
            such employer for services rendered to such employer.
                ``(2) Exception for small employers.--Rules similar to the
            rules of section 3111(c)(2) shall apply for purposes of this
            subsection.
                ``(3) Nonelecting employer.--For purposes of paragraph (1),
            the term `nonelecting employer' means any employer for any
            period with respect to which such employer does not have an
            election under section 4980H(a) in effect.
                ``(4) Special rule for separate elections.--In the case of
            an employer who makes a separate election described in section
            4980H(a)(4) for any period, subsection (a) shall be applied for
            such period by taking into account only the wages paid to
            employees who are not subject to such election.''.
                (2) Definitions.--Subsection (e) of section 3231 of such
            Code is amended by adding at the end the following new
            paragraph:
                ``(13) Special rules for tax on employers electing not to
            provide health benefits.--For purposes of section 3221(c)--
                        ``(A) Paragraph (1) shall be applied without regard
                    to the third sentence thereof.
                        ``(B) Paragraph (2) shall not apply.''.
                (3) Conforming amendment.--Subsection (d) of section 3221
            of such Code, as redesignated by this section, is amended by
            striking ``subsections (a) and (b), see section 3231(e)(2)''
            and inserting ``this section, see paragraphs (2) and (13)(B) of
            section 3231(e)''.
        (e) Effective Date.--The amendments made by this section shall
    apply to periods beginning after December 31, 2012.

    Subtitle B--Credit for Small Business Employee Health Coverage Expenses

    SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.

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

    ``SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.

        ``(a) In General.--For purposes of section 38, in the case of a
    qualified small employer, the small business employee health coverage
    credit determined under this section for the taxable year is an amount
    equal to the applicable percentage of the qualified employee health
    coverage expenses of such employer for such taxable year.
        ``(b) Applicable Percentage.--
                ``(1) In general.--For purposes of this section, the
            applicable percentage is 50 percent.
                ``(2) Phaseout based on average compensation of
            employees.--In the case of an employer whose average annual
            employee compensation for the taxable year exceeds $20,000, the
            percentage specified in paragraph (1) shall be reduced by a
            number of percentage points which bears the same ratio to 50 as
            such excess bears to $20,000.
        ``(c) Limitations.--
                ``(1) Phaseout based on employer size.--In the case of an
            employer who employs more than 10 qualified employees during
            the taxable year, the credit determined under subsection (a)
            shall be reduced by an amount which bears the same ratio to the
            amount of such credit (determined without regard to this
            paragraph and after the application of the other provisions of
            this section) as--
                        ``(A) the excess of--
                                ``(i) the number of qualified employees
                            employed by the employer during the taxable
                            year, over
                                ``(ii) 10, bears to
                        ``(B) 15.
                ``(2) Credit not allowed with respect to certain highly
            compensated employees.--No credit shall be allowed under
            subsection (a) with respect to qualified employee health
            coverage expenses paid or incurred with respect to any employee
            for any taxable year if the aggregate compensation paid by the
            employer to such employee during such taxable year exceeds
            $80,000.
        ``(d) Qualified Employee Health Coverage Expenses.--For purposes of
    this section--
                ``(1) In general.--The term `qualified employee health
            coverage expenses' means, with respect to any employer for any
            taxable year, the aggregate amount paid or incurred by such
            employer during such taxable year for coverage of any qualified
            employee of the employer (including any family coverage which
            covers such employee) under qualified health coverage.
                ``(2) Qualified health coverage.--The term `qualified
            health coverage' means acceptable coverage (as defined in
            section 59B(d)) which--
                        ``(A) is provided pursuant to an election under
                    section 4980H(a), and
                        ``(B) satisfies the requirements referred to in
                    section 4980H(c).
        ``(e) Other Definitions.--For purposes of this section--
                ``(1) Qualified small employer.--For purposes of this
            section, the term `qualified small employer' means any employer
            for any taxable year if--
                        ``(A) the number of qualified employees employed by
                    such employer during the taxable year does not exceed
                    25, and
                        ``(B) the average annual employee compensation of
                    such employer for such taxable year does not exceed the
                    sum of the dollar amounts in effect under subsection
                    (b)(2).
                ``(2) Qualified employee.--The term `qualified employee'
            means any employee of an employer for any taxable year of the
            employer if such employee received at least $5,000 of
            compensation from such employer during such taxable year.
                ``(3) Average annual employee compensation.--The term
            `average annual employee compensation' means, with respect to
            any employer for any taxable year, the average amount of
            compensation paid by such employer to qualified employees of
            such employer during such taxable year.
                ``(4) Compensation.--The term `compensation' has the
            meaning given such term in section 408(p)(6)(A).
                ``(5) Family coverage.--The term `family coverage' means
            any coverage other than self-only coverage.
        ``(f) Special Rules.--For purposes of this section--
                ``(1) Special rule for partnerships and self-employed.--In
            the case of a partnership (or a trade or business carried on by
            an individual) which has one or more qualified employees
            (determined without regard to this paragraph) with respect to
            whom the election under 4980H(a) applies, each partner (or, in
            the case of a trade or business carried on by an individual,
            such individual) shall be treated as an employee.
                ``(2) Aggregation rule.--All persons treated as a single
            employer under subsection (b), (c), (m), or (o) of section 414
            shall be treated as 1 employer.
                ``(3) Denial of double benefit.--Any deduction otherwise
            allowable with respect to amounts paid or incurred for health
            insurance coverage to which subsection (a) applies shall be
            reduced by the amount of the credit determined under this
            section.
                ``(4) Inflation adjustment.--In the case of any taxable
            year beginning after 2013, each of the dollar amounts in
            subsections (b)(2), (c)(2), and (e)(2) shall be increased by an
            amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) the cost of living adjustment determined
                    under section 1(f)(3) for the calendar year in which
                    the taxable year begins determined by substituting
                    `calendar year 2012' for `calendar year 1992' in
                    subparagraph (B) thereof.
            If any increase determined under this paragraph is not a
            multiple of $50, such increase shall be rounded to the next
            lowest multiple of $50.''.
        (b) Credit To Be Part of General Business Credit.--Subsection (b)
    of section 38 of such Code (relating to general business credit) is
    amended by striking ``plus'' at the end of paragraph (34), by striking
    the period at the end of paragraph (35) and inserting ``, plus'', and
    by adding at the end the following new paragraph:
                ``(36) in the case of a qualified small employer (as
            defined in section 45R(e)), the small business employee health
            coverage credit determined under section 45R(a).''.
        (c) Clerical Amendment.--The table of sections for subpart D of
    part IV of subchapter A of chapter 1 of such Code is amended by
    inserting after the item relating to section 45Q the following new
    item:

    ``Sec. ?45R.?Small business employee health coverage credit.''.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2012.

        Subtitle C--Disclosures To Carry Out Health Insurance Exchange
                                   Subsidies

    SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

        (a) In General.--Subsection (l) of section 6103 of the Internal
    Revenue Code of 1986 is amended by adding at the end the following new
    paragraph:
                ``(21) Disclosure of return information to carry out health
            insurance exchange subsidies.--
                        ``(A) In general.--The Secretary, upon written
                    request from the Health Choices Commissioner or the
                    head of a State-based health insurance exchange
                    approved for operation under section 208 of the
                    America's Affordable Health Choices Act of 2009, shall
                    disclose to officers and employees of the Health
                    Choices Administration or such State-based health
                    insurance exchange, as the case may be, return
                    information of any taxpayer whose income is relevant in
                    determining any affordability credit described in
                    subtitle C of title II of the America's Affordable
                    Health Choices Act of 2009. Such return information
                    shall be limited to--
                                ``(i) taxpayer identity information with
                            respect to such taxpayer,
                                ``(ii) the filing status of such taxpayer,
                                ``(iii) the modified adjusted gross income
                            of such taxpayer (as defined in section
                            59B(e)(5)),
                                ``(iv) the number of dependents of the
                            taxpayer,
                                ``(v) such other information as is
                            prescribed by the Secretary by regulation as
                            might indicate whether the taxpayer is eligible
                            for such affordability credits (and the amount
                            thereof), and
                                ``(vi) the taxable year with respect to
                            which the preceding information relates or, if
                            applicable, the fact that such information is
                            not available.
                        ``(B) Restriction on use of disclosed
                    information.--Return information disclosed under
                    subparagraph (A) may be used by officers and employees
                    of the Health Choices Administration or such State-
                    based health insurance exchange, as the case may be,
                    only for the purposes of, and to the extent necessary
                    in, establishing and verifying the appropriate amount
                    of any affordability credit described in subtitle C of
                    title II of the America's Affordable Health Choices Act
                    of 2009 and providing for the repayment of any such
                    credit which was in excess of such appropriate
                    amount.''.
        (b) Procedures and Recordkeeping Related to Disclosures.--Paragraph
    (4) of section 6103(p) of such Code is amended--
                (1) by inserting ``, or any entity described in subsection
            (l)(21),'' after ``or (20)'' in the matter preceding
            subparagraph (A),
                (2) by inserting ``or any entity described in subsection
            (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
                (3) by inserting ``or any entity described in subsection
            (l)(21),'' after ``or (20)'' both places it appears in the
            matter after subparagraph (F).
        (c) Unauthorized Disclosure or Inspection.--Paragraph (2) of
    section 7213(a) of such Code is amended by striking ``or (20)'' and
    inserting ``(20), or (21)''.

                      Subtitle D--Other Revenue Provisions

                           PART 1--GENERAL PROVISIONS

    SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

        (a) In General.--Part VIII of subchapter A of chapter 1 of the
    Internal Revenue Code of 1986, as added by this title, is amended by
    adding at the end the following new subpart:

               ``Subpart B--Surcharge on High Income Individuals

    ``Sec. ?59C.?Surcharge on high income individuals.

    ``SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

        ``(a) General Rule.--In the case of a taxpayer other than a
    corporation, there is hereby imposed (in addition to any other tax
    imposed by this subtitle) a tax equal to--
                ``(1) 1 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $350,000 but does not exceed
            $500,000,
                ``(2) 1.5 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $500,000 but does not exceed
            $1,000,000, and
                ``(3) 5.4 percent of so much of the modified adjusted gross
            income of the taxpayer as exceeds $1,000,000.
        ``(b) Taxpayers Not Making a Joint Return.--In the case of any
    taxpayer other than a taxpayer making a joint return under section 6013
    or a surviving spouse (as defined in section 2(a)), subsection (a)
    shall be applied by substituting for each of the dollar amounts therein
    (after any increase determined under subsection (e)) a dollar amount
    equal to--
                ``(1) 50 percent of the dollar amount so in effect in the
            case of a married individual filing a separate return, and
                ``(2) 80 percent of the dollar amount so in effect in any
            other case.
        ``(c) Adjustments Based on Federal Health Reform Savings.--
                ``(1) In general.--Except as provided in paragraph (2), in
            the case of any taxable year beginning after December 31, 2012,
            subsection (a) shall be applied--
                        ``(A) by substituting `2 percent' for `1 percent',
                    and
                        ``(B) by substituting `3 percent' for `1.5
                    percent'.
                ``(2) Adjustments based on excess federal health reform
            savings.--
                        ``(A) Exception if federal health reform savings
                    significantly exceeds base amount.--If the excess
                    Federal health reform savings is more than
                    $150,000,000,000 but not more than $175,000,000,000,
                    paragraph (1) shall not apply.
                        ``(B) Further adjustment for additional federal
                    health reform savings.--If the excess Federal health
                    reform savings is more than $175,000,000,000,
                    paragraphs (1) and (2) of subsection (a) (and paragraph
                    (1) of this subsection) shall not apply to any taxable
                    year beginning after December 31, 2012.
                        ``(C) Excess federal health reform savings.--For
                    purposes of this subsection, the term `excess Federal
                    health reform savings' means the excess of--
                                ``(i) the Federal health reform savings,
                            over
                                ``(ii) $525,000,000,000.
                        ``(D) Federal health reform savings.--The term
                    `Federal health reform savings' means the sum of the
                    amounts described in subparagraphs (A) and (B) of
                    paragraph (3).
                ``(3) Determination of federal health reform savings.--Not
            later than December 1, 2012, the Director of the Office of
            Management and Budget shall--
                        ``(A) determine, on the basis of the study
                    conducted under paragraph (4), the aggregate reductions
                    in Federal expenditures which have been achieved as a
                    result of the provisions of, and amendments made by,
                    subdivision B of the America's Affordable Health
                    Choices Act of 2009 during the period beginning on
                    October 1, 2009, and ending with the latest date with
                    respect to which the Director has sufficient data to
                    make such determination, and
                        ``(B) estimate, on the basis of such study and the
                    determination under subparagraph (A), the aggregate
                    reductions in Federal expenditures which will be
                    achieved as a result of such provisions and amendments
                    during so much of the period beginning with fiscal year
                    2010 and ending with fiscal year 2019 as is not taken
                    into account under subparagraph (A).
                ``(4) Study of federal health reform savings.--The Director
            of the Office of Management and Budget shall conduct a study of
            the reductions in Federal expenditures during fiscal years 2010
            through 2019 which are attributable to the provisions of, and
            amendments made by, subdivision B of the America's Affordable
            Health Choices Act of 2009. The Director shall complete such
            study not later than December 1, 2012.
                ``(5) Reductions in federal expenditures determined without
            regard to program investments.--For purposes of paragraphs (3)
            and (4), reductions in Federal expenditures shall be determined
            without regard to section 1121 of the America's Affordable
            Health Choices Act of 2009 and other program investments under
            subdivision B thereof.
        ``(d) Modified Adjusted Gross Income.--For purposes of this
    section, the term `modified adjusted gross income' means adjusted gross
    income reduced by any deduction allowed for investment interest (as
    defined in section 163(d)). In the case of an estate or trust, adjusted
    gross income shall be determined as provided in section 67(e).
        ``(e) Inflation Adjustments.--
                ``(1) In general.--In the case of taxable years beginning
            after 2011, the dollar amounts in subsection (a) shall be
            increased by an amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) the cost-of-living adjustment determined
                    under section 1(f)(3) for the calendar year in which
                    the taxable year begins, by substituting `calendar year
                    2010' for `calendar year 1992' in subparagraph (B)
                    thereof.
                ``(2) Rounding.--If any amount as adjusted under paragraph
            (1) is not a multiple of $5,000, such amount shall be rounded
            to the next lowest multiple of $5,000.
        ``(f) Special Rules.--
                ``(1) Nonresident alien.--In the case of a nonresident
            alien individual, only amounts taken into account in connection
            with the tax imposed under section 871(b) shall be taken into
            account under this section.
                ``(2) Citizens and residents living abroad.--The dollar
            amounts in effect under subsection (a) (after the application
            of subsections (b) and (e)) shall be decreased by the excess
            of--
                        ``(A) the amounts excluded from the taxpayer's
                    gross income under section 911, over
                        ``(B) the amounts of any deductions or exclusions
                    disallowed under section 911(d)(6) with respect to the
                    amounts described in subparagraph (A).
                ``(3) Charitable trusts.--Subsection (a) shall not apply to
            a trust all the unexpired interests in which are devoted to one
            or more of the purposes described in section 170(c)(2)(B).
                ``(4) Not treated as tax imposed by this chapter for
            certain purposes.--The tax imposed under this section shall not
            be treated as tax imposed by this chapter for purposes of
            determining the amount of any credit under this chapter or for
            purposes of section 55.''.
        (b) Clerical Amendment.--The table of subparts for part VIII of
    subchapter A of chapter 1 of such Code, as added by this title, is
    amended by inserting after the item relating to subpart A the following
    new item:

             ``subpart b. surcharge on high income individuals.''.

        (c) Section 15 Not To Apply.--The amendment made by subsection (a)
    shall not be treated as a change in a rate of tax for purposes of
    section 15 of the Internal Revenue Code of 1986.
        (d) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after December 31, 2010.

    SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

        (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) of the
    Internal Revenue Code of 1986 are each amended by striking ``December
    31, 2010'' and inserting ``December 31, 2019''.
        (b) Transition.--Subsection (f) of section 864 of such Code is
    amended by striking paragraph (7).

                      PART 2--PREVENTION OF TAX AVOIDANCE

    SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE
                  PAYMENTS.

        (a) In General.--Section 894 of the Internal Revenue Code of 1986
    (relating to income affected by treaty) is amended by adding at the end
    the following new subsection:
        ``(d) Limitation on Treaty Benefits for Certain Deductible
    Payments.--
                ``(1) In general.--In the case of any deductible related-
            party payment, any withholding tax imposed under chapter 3 (and
            any tax imposed under subpart A or B of this part) with respect
            to such payment may not be reduced under any treaty of the
            United States unless any such withholding tax would be reduced
            under a treaty of the United States if such payment were made
            directly to the foreign parent corporation.
                ``(2) Deductible related-party payment.--For purposes of
            this subsection, the term `deductible related-party payment'
            means any payment made, directly or indirectly, by any person
            to any other person if the payment is allowable as a deduction
            under this chapter and both persons are members of the same
            foreign controlled group of entities.
                ``(3) Foreign controlled group of entities.--For purposes
            of this subsection--
                        ``(A) In general.--The term `foreign controlled
                    group of entities' means a controlled group of entities
                    the common parent of which is a foreign corporation.
                        ``(B) Controlled group of entities.--The term
                    `controlled group of entities' means a controlled group
                    of corporations as defined in section 1563(a)(1),
                    except that--
                                ``(i) `more than 50 percent' shall be
                            substituted for `at least 80 percent' each
                            place it appears therein, and
                                ``(ii) the determination shall be made
                            without regard to subsections (a)(4) and (b)(2)
                            of section 1563.
                    A partnership or any other entity (other than a
                    corporation) shall be treated as a member of a
                    controlled group of entities if such entity is
                    controlled (within the meaning of section 954(d)(3)) by
                    members of such group (including any entity treated as
                    a member of such group by reason of this sentence).
                ``(4) Foreign parent corporation.--For purposes of this
            subsection, the term `foreign parent corporation' means, with
            respect to any deductible related-party payment, the common
            parent of the foreign controlled group of entities referred to
            in paragraph (3)(A).
                ``(5) Regulations.--The Secretary may prescribe such
            regulations or other guidance as are necessary or appropriate
            to carry out the purposes of this subsection, including
            regulations or other guidance which provide for--
                        ``(A) the treatment of two or more persons as
                    members of a foreign controlled group of entities if
                    such persons would be the common parent of such group
                    if treated as one corporation, and
                        ``(B) the treatment of any member of a foreign
                    controlled group of entities as the common parent of
                    such group if such treatment is appropriate taking into
                    account the economic relationships among such
                    entities.''.
        (b) Effective Date.--The amendment made by this section shall apply
    to payments made after the date of the enactment of this Act.

    SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

        (a) In General.--Section 7701 of the Internal Revenue Code of 1986
    is amended by redesignating subsection (o) as subsection (p) and by
    inserting after subsection (n) the following new subsection:
        ``(o) Clarification of Economic Substance Doctrine.--
                ``(1) Application of doctrine.--In the case of any
            transaction to which the economic substance doctrine is
            relevant, such transaction shall be treated as having economic
            substance only if--
                        ``(A) the transaction changes in a meaningful way
                    (apart from Federal income tax effects) the taxpayer's
                    economic position, and
                        ``(B) the taxpayer has a substantial purpose (apart
                    from Federal income tax effects) for entering into such
                    transaction.
                ``(2) Special rule where taxpayer relies on profit
            potential.--
                        ``(A) In general.--The potential for profit of a
                    transaction shall be taken into account in determining
                    whether the requirements of subparagraphs (A) and (B)
                    of paragraph (1) are met with respect to the
                    transaction only if the present value of the reasonably
                    expected pre-tax profit from the transaction is
                    substantial in relation to the present value of the
                    expected net tax benefits that would be allowed if the
                    transaction were respected.
                        ``(B) Treatment of fees and foreign taxes.--Fees
                    and other transaction expenses and foreign taxes shall
                    be taken into account as expenses in determining pre-
                    tax profit under subparagraph (A).
                ``(3) State and local tax benefits.--For purposes of
            paragraph (1), any State or local income tax effect which is
            related to a Federal income tax effect shall be treated in the
            same manner as a Federal income tax effect.
                ``(4) Financial accounting benefits.--For purposes of
            paragraph (1)(B), achieving a financial accounting benefit
            shall not be taken into account as a purpose for entering into
            a transaction if the origin of such financial accounting
            benefit is a reduction of Federal income tax.
                ``(5) Definitions and special rules.--For purposes of this
            subsection--
                        ``(A) Economic substance doctrine.--The term
                    `economic substance doctrine' means the common law
                    doctrine under which tax benefits under subtitle A with
                    respect to a transaction are not allowable if the
                    transaction does not have economic substance or lacks a
                    business purpose.
                        ``(B) Exception for personal transactions of
                    individuals.--In the case of an individual, paragraph
                    (1) shall apply only to transactions entered into in
                    connection with a trade or business or an activity
                    engaged in for the production of income.
                        ``(C) Other common law doctrines not affected.--
                    Except as specifically provided in this subsection, the
                    provisions of this subsection shall not be construed as
                    altering or supplanting any other rule of law, and the
                    requirements of this subsection shall be construed as
                    being in addition to any such other rule of law.
                        ``(D) Determination of application of doctrine not
                    affected.--The determination of whether the economic
                    substance doctrine is relevant to a transaction (or
                    series of transactions) shall be made in the same
                    manner as if this subsection had never been enacted.
                ``(6) Regulations.--The Secretary shall prescribe such
            regulations as may be necessary or appropriate to carry out the
            purposes of this subsection.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to transactions entered into after the date of the enactment of
    this Act.

    SEC. 453. PENALTIES FOR UNDERPAYMENTS.

        (a) Penalty for Underpayments Attributable to Transactions Lacking
    Economic Substance.--
                (1) In general.--Subsection (b) of section 6662 of the
            Internal Revenue Code of 1986 is amended by inserting after
            paragraph (5) the following new paragraph:
                ``(6) Any disallowance of claimed tax benefits by reason of
            a transaction lacking economic substance (within the meaning of
            section 7701(o)) or failing to meet the requirements of any
            similar rule of law.''.
                (2) Increased penalty for nondisclosed transactions.--
            Section 6662 of such Code is amended by adding at the end the
            following new subsection:
        ``(i) Increase in Penalty in Case of Nondisclosed Noneconomic
    Substance Transactions.--
                ``(1) In general.--In the case of any portion of an
            underpayment which is attributable to one or more nondisclosed
            noneconomic substance transactions, subsection (a) shall be
            applied with respect to such portion by substituting `40
            percent' for `20 percent'.
                ``(2) Nondisclosed noneconomic substance transactions.--For
            purposes of this subsection, the term `nondisclosed noneconomic
            substance transaction' means any portion of a transaction
            described in subsection (b)(6) with respect to which the
            relevant facts affecting the tax treatment are not adequately
            disclosed in the return nor in a statement attached to the
            return.
                ``(3) Special rule for amended returns.--Except as provided
            in regulations, in no event shall any amendment or supplement
            to a return of tax be taken into account for purposes of this
            subsection if the amendment or supplement is filed after the
            earlier of the date the taxpayer is first contacted by the
            Secretary regarding the examination of the return or such other
            date as is specified by the Secretary.''.
                (3) Conforming amendment.--Subparagraph (B) of section
            6662A(e)(2) of such Code is amended--
                        (A) by striking ``section 6662(h)'' and inserting
                    ``subsections (h) or (i) of section 6662'', and
                        (B) by striking ``gross valuation misstatement
                    penalty'' in the heading and inserting ``certain
                    increased underpayment penalties''.
        (b) Reasonable Cause Exception Not Applicable to Noneconomic
    Substance Transactions, Tax Shelters, and Certain Large or Publicly
    Traded Persons.--Subsection (c) of section 6664 of such Code is
    amended--
                (1) by redesignating paragraphs (2) and (3) as paragraphs
            (3) and (4), respectively,
                (2) by striking ``paragraph (2)'' in paragraph (4), as so
            redesignated, and inserting ``paragraph (3)'', and
                (3) by inserting after paragraph (1) the following new
            paragraph:
                ``(2) Exception.--Paragraph (1) shall not apply to--
                        ``(A) to any portion of an underpayment which is
                    attributable to one or more tax shelters (as defined in
                    section 6662(d)(2)(C)) or transactions described in
                    section 6662(b)(6), and
                        ``(B) to any taxpayer if such taxpayer is a
                    specified person (as defined in section
                    6662(d)(2)(D)(ii)).''.
        (c) Application of Penalty for Erroneous Claim for Refund or Credit
    to Noneconomic Substance Transactions.--Section 6676 of such Code is
    amended by redesignating subsection (c) as subsection (d) and inserting
    after subsection (b) the following new subsection:
        ``(c) Noneconomic Substance Transactions Treated as Lacking
    Reasonable Basis.--For purposes of this section, any excessive amount
    which is attributable to any transaction described in section
    6662(b)(6) shall not be treated as having a reasonable basis.''.
        (d) Special Understatement Reduction Rule for Certain Large or
    Publicly Traded Persons.--
                (1) In general.--Paragraph (2) of section 6662(d) of such
            Code is amended by adding at the end the following new
            subparagraph:
                        ``(D) Special reduction rule for certain large or
                    publicly traded persons.--
                                ``(i) In general.--In the case of any
                            specified person--
                                        ``(I) subparagraph (B) shall not
                                    apply, and
                                        ``(II) the amount of the
                                    understatement under subparagraph (A)
                                    shall be reduced by that portion of the
                                    understatement which is attributable to
                                    any item with respect to which the
                                    taxpayer has a reasonable belief that
                                    the tax treatment of such item by the
                                    taxpayer is more likely than not the
                                    proper tax treatment of such item.
                                ``(ii) Specified person.--For purposes of
                            this subparagraph, the term `specified person'
                            means--
                                        ``(I) any person required to file
                                    periodic or other reports under section
                                    13 of the Securities Exchange Act of
                                    1934, and
                                        ``(II) any corporation with gross
                                    receipts in excess of $100,000,000 for
                                    the taxable year involved.
                            All persons treated as a single employer under
                            section 52(a) shall be treated as one person
                            for purposes of subclause (II).''.
                (2) Conforming amendment.--Subparagraph (C) of section
            6662(d)(2) of such Code is amended by striking ``Subparagraph
            (B)'' and inserting ``Subparagraphs (B) and (D)(i)(II)''.
        (e) Effective Date.--The amendments made by this section shall
    apply to transactions entered into after the date of the enactment of
    this Act.

               SUBDIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

    SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION.

        The table of contents for this subdivision is as follows:

    Sec. 1001. Table of contents of subdivision.
                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                         Part 1--Market Basket Updates

    Sec. 1101. Skilled nursing facility payment update.
    Sec. 1102. Inpatient rehabilitation facility payment update.
    Sec. 1103. Incorporating productivity improvements into market basket
                                updates that do not already incorporate
                                such improvements.
                    Part 2--Other Medicare Part A Provisions

    Sec. 1111. Payments to skilled nursing facilities.
    Sec. 1112. Medicare DSH report and payment adjustments in response to
                                coverage expansion.
                    Subtitle B--Provisions Related to Part B

                          Part 1--Physicians' Services

    Sec. 1121. Sustainable growth rate reform.
    Sec. 1122. Misvalued codes under the physician fee schedule.
    Sec. 1123. Payments for efficient areas.
    Sec. 1124. Modifications to the Physician Quality Reporting Initiative
                                (PQRI).
    Sec. 1125. Adjustment to Medicare payment localities.
                         Part 2--Market Basket Updates

    Sec. 1131. Incorporating productivity improvements into market basket
                                updates that do not already incorporate
                                such improvements.
                            Part 3--Other Provisions

    Sec. 1141. Rental and purchase of power-driven wheelchairs.
    Sec. 1142. Extension of payment rule for brachytherapy.
    Sec. 1143. Home infusion therapy report to congress.
    Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost
                                data and other data.
    Sec. 1145. Treatment of certain cancer hospitals.
    Sec. 1146. Medicare Improvement Fund.
    Sec. 1147. Payment for imaging services.
    Sec. 1148. Durable medical equipment program improvements.
    Sec. 1149. MedPAC study and report on bone mass measurement.
            Subtitle C--Provisions Related to Medicare Parts A and B

    Sec. 1151. Reducing potentially preventable hospital readmissions.
    Sec. 1152. Post acute care services payment reform plan and bundling
                                pilot program.
    Sec. 1153. Home health payment update for 2010.
    Sec. 1154. Payment adjustments for home health care.
    Sec. 1155. Incorporating productivity improvements into market basket
                                update for home health services.
    Sec. 1156. Limitation on Medicare exceptions to the prohibition on
                                certain physician referrals made to
                                hospitals.
    Sec. 1157. Institute of Medicine study of geographic adjustment factors
                                under Medicare.
    Sec. 1158. Revision of Medicare payment systems to address geographic
                                inequities.
                     Subtitle D--Medicare Advantage Reforms

                       Part 1--Payment and Administration

    Sec. 1161. Phase-in of payment based on fee-for-service costs.
    Sec. 1162. Quality bonus payments.
    Sec. 1163. Extension of Secretarial coding intensity adjustment
                                authority.
    Sec. 1164. Simplification of annual beneficiary election periods.
    Sec. 1165. Extension of reasonable cost contracts.
    Sec. 1166. Limitation of waiver authority for employer group plans.
    Sec. 1167. Improving risk adjustment for payments.
    Sec. 1168. Elimination of MA Regional Plan Stabilization Fund.
                 Part 2--Beneficiary Protections and Anti-Fraud

    Sec. 1171. Limitation on cost-sharing for individual health services.
    Sec. 1172. Continuous open enrollment for enrollees in plans with
                                enrollment suspension.
    Sec. 1173. Information for beneficiaries on MA plan administrative
                                costs.
    Sec. 1174. Strengthening audit authority.
    Sec. 1175. Authority to deny plan bids.
                    Part 3--Treatment of Special Needs Plans

    Sec. 1176. Limitation on enrollment outside open enrollment period of
                                individuals into chronic care specialized
                                MA plans for special needs individuals.
    Sec. 1177. Extension of authority of special needs plans to restrict
                                enrollment.
                  Subtitle E--Improvements to Medicare Part D

    Sec. 1181. Elimination of coverage gap.
    Sec. 1182. Discounts for certain part D drugs in original coverage gap.
    Sec. 1183. Repeal of provision relating to submission of claims by
                                pharmacies located in or contracting with
                                long-term care facilities.
    Sec. 1184. Including costs incurred by AIDS drug assistance programs
                                and Indian Health Service in providing
                                prescription drugs toward the annual out-
                                of-pocket threshold under part D.
    Sec. 1185. Permitting mid-year changes in enrollment for formulary
                                changes that adversely impact an enrollee.
                 Subtitle F--Medicare Rural Access Protections

    Sec. 1191. Telehealth expansion and enhancements.
    Sec. 1192. Extension of outpatient hold harmless provision.
    Sec. 1193. Extension of section 508 hospital reclassifications.
    Sec. 1194. Extension of geographic floor for work.
    Sec. 1195. Extension of payment for technical component of certain
                                physician pathology services.
    Sec. 1196. Extension of ambulance add-ons.
                   TITLE J--MEDICARE BENEFICIARY IMPROVEMENTS

      Subtitle A--Improving and Simplifying Financial Assistance for Low
                         Income Medicare Beneficiaries

    Sec. 1201. Improving assets tests for Medicare Savings Program and low-
                                income subsidy program.
    Sec. 1202. Elimination of part D cost-sharing for certain non-
                                institutionalized full-benefit dual
                                eligible individuals.
    Sec. 1203. Eliminating barriers to enrollment.
    Sec. 1204. Enhanced oversight relating to reimbursements for
                                retroactive low income subsidy enrollment.
    Sec. 1205. Intelligent assignment in enrollment.
    Sec. 1206. Special enrollment period and automatic enrollment process
                                for certain subsidy eligible individuals.
    Sec. 1207. Application of MA premiums prior to rebate in calculation of
                                low income subsidy benchmark.
                    Subtitle B--Reducing Health Disparities

    Sec. 1221. Ensuring effective communication in Medicare.
    Sec. 1222. Demonstration to promote access for Medicare beneficiaries
                                with limited English proficiency by
                                providing reimbursement for culturally and
                                linguistically appropriate services.
    Sec. 1223. IOM report on impact of language access services.
    Sec. 1224. Definitions.
                     Subtitle C--Miscellaneous Improvements

    Sec. 1231. Extension of therapy caps exceptions process.
    Sec. 1232. Extended months of coverage of immunosuppressive drugs for
                                kidney transplant patients and other renal
                                dialysis provisions.
    Sec. 1233. Advance care planning consultation.
    Sec. 1234. Part B special enrollment period and waiver of limited
                                enrollment penalty for TRICARE
                                beneficiaries.
    Sec. 1235. Exception for use of more recent tax year in case of gains
                                from sale of primary residence in computing
                                part B income-related premium.
    Sec. 1236. Demonstration program on use of patient decisions aids.
         TITLE K--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
                                COORDINATED CARE

    Sec. 1301. Accountable Care Organization pilot program.
    Sec. 1302. Medical home pilot program.
    Sec. 1303. Payment incentive for selected primary care services.
    Sec. 1304. Increased reimbursement rate for certified nurse-midwives.
    Sec. 1305. Coverage and waiver of cost-sharing for preventive services.
    Sec. 1306. Waiver of deductible for colorectal cancer screening tests
                                regardless of coding, subsequent diagnosis,
                                or ancillary tissue removal.
    Sec. 1307. Excluding clinical social worker services from coverage
                                under the medicare skilled nursing facility
                                prospective payment system and consolidated
                                payment.
    Sec. 1308. Coverage of marriage and family therapist services and
                                mental health counselor services.
    Sec. 1309. Extension of physician fee schedule mental health add-on.
    Sec. 1310. Expanding access to vaccines.
                                TITLE L--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    Sec. 1401. Comparative effectiveness research.
                     Subtitle B--Nursing Home Transparency

       Part 1--Improving Transparency of Information on Skilled Nursing
                       Facilities and Nursing Facilities

    Sec. 1411. Required disclosure of ownership and additional disclosable
                                parties information.
    Sec. 1412. Accountability requirements.
    Sec. 1413. Nursing home compare Medicare website.
    Sec. 1414. Reporting of expenditures.
    Sec. 1415. Standardized complaint form.
    Sec. 1416. Ensuring staffing accountability.
                         Part 2--Targeting Enforcement

    Sec. 1421. Civil money penalties.
    Sec. 1422. National independent monitor pilot program.
    Sec. 1423. Notification of facility closure.
                        Part 3--Improving Staff Training

    Sec. 1431. Dementia and abuse prevention training.
    Sec. 1432. Study and report on training required for certified nurse
                                aides and supervisory staff.
                        Subtitle C--Quality Measurements

    Sec. 1441. Establishment of national priorities for quality
                                improvement.
    Sec. 1442. Development of new quality measures; GAO evaluation of data
                                collection process for quality measurement.
    Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of
                                quality measures.
    Sec. 1444. Application of quality measures.
    Sec. 1445. Consensus-based entity funding.
               Subtitle D--Physician Payments Sunshine Provision

    Sec. 1451. Reports on financial relationships between manufacturers and
                                distributors of covered drugs, devices,
                                biologicals, or medical supplies under
                                Medicare, Medicaid, or CHIP and physicians
                                and other health care entities and between
                                physicians and other health care entities.
       Subtitle E--Public Reporting on Health Care-Associated Infections

    Sec. 1461. Requirement for public reporting by hospitals and ambulatory
                                surgical centers on health care-associated
                                infections.
                  TITLE M--MEDICARE GRADUATE MEDICAL EDUCATION

    Sec. 1501. Distribution of unused residency positions.
    Sec. 1502. Increasing training in nonprovider settings.
    Sec. 1503. Rules for counting resident time for didactic and scholarly
                                activities and other activities.
    Sec. 1504. Preservation of resident cap positions from closed
                                hospitals.
    Sec. 1505. Improving accountability for approved medical residency
                                training.
                           TITLE N--PROGRAM INTEGRITY

         Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse

    Sec. 1601. Increased funding and flexibility to fight fraud and abuse.
               Subtitle B--Enhanced Penalties for Fraud and Abuse

    Sec. 1611. Enhanced penalties for false statements on provider or
                                supplier enrollment applications.
    Sec. 1612. Enhanced penalties for submission of false statements
                                material to a false claim.
    Sec. 1613. Enhanced penalties for delaying inspections.
    Sec. 1614. Enhanced hospice program safeguards.
    Sec. 1615. Enhanced penalties for individuals excluded from program
                                participation.
    Sec. 1616. Enhanced penalties for provision of false information by
                                Medicare Advantage and part D plans.
    Sec. 1617. Enhanced penalties for Medicare Advantage and part D
                                marketing violations.
    Sec. 1618. Enhanced penalties for obstruction of program audits.
    Sec. 1619. Exclusion of certain individuals and entities from
                                participation in Medicare and State health
                                care programs.
             Subtitle C--Enhanced Program and Provider Protections

    Sec. 1631. Enhanced CMS program protection authority.
    Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure
                                requirements relating to previous
                                affiliations.
    Sec. 1633. Required inclusion of payment modifier for certain
                                evaluation and management services.
    Sec. 1634. Evaluations and reports required under Medicare Integrity
                                Program.
    Sec. 1635. Require providers and suppliers to adopt programs to reduce
                                waste, fraud, and abuse.
    Sec. 1636. Maximum period for submission of Medicare claims reduced to
                                not more than 12 months.
    Sec. 1637. Physicians who order durable medical equipment or home
                                health services required to be Medicare
                                enrolled physicians or eligible
                                professionals.
    Sec. 1638. Requirement for physicians to provide documentation on
                                referrals to programs at high risk of waste
                                and abuse.
    Sec. 1639. Face to face encounter with patient required before
                                physicians may certify eligibility for home
                                health services or durable medical
                                equipment under Medicare.
    Sec. 1640. Extension of testimonial subpoena authority to program
                                exclusion investigations.
    Sec. 1641. Required repayments of Medicare and Medicaid overpayments.
    Sec. 1642. Expanded application of hardship waivers for OIG exclusions
                                to beneficiaries of any Federal health care
                                program.
    Sec. 1643. Access to certain information on renal dialysis facilities.
    Sec. 1644. Billing agents, clearinghouses, or other alternate payees
                                required to register under Medicare.
    Sec. 1645. Conforming civil monetary penalties to False Claims Act
                                amendments.
     Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and
                                     Abuse

    Sec. 1651. Access to Information Necessary to Identify Fraud, Waste,
                                and Abuse.
    Sec. 1652. Elimination of duplication between the Healthcare Integrity
                                and Protection Data Bank and the National
                                Practitioner Data Bank.
    Sec. 1653. Compliance with HIPAA privacy and security standards.
                           TITLE O--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

    Sec. 1701. Eligibility for individuals with income below 133\1/3\
                                percent of the Federal poverty level.
    Sec. 1702.  Requirements and special rules for certain Medicaid
                                eligible individuals.
    Sec. 1703. CHIP and Medicaid maintenance of effort.
    Sec. 1704. Reduction in Medicaid DSH.
    Sec. 1705. Expanded outstationing.
                             Subtitle B--Prevention

    Sec. 1711. Required coverage of preventive services.
    Sec. 1712. Tobacco cessation.
    Sec. 1713. Optional coverage of nurse home visitation services.
    Sec. 1714. State eligibility option for family planning services.
                               Subtitle C--Access

    Sec. 1721. Payments to primary care practitioners.
    Sec. 1722. Medical home pilot program.
    Sec. 1723. Translation or interpretation services.
    Sec. 1724. Optional coverage for freestanding birth center services.
    Sec. 1725. Inclusion of public health clinics under the vaccines for
                                children program.
                              Subtitle D--Coverage

    Sec. 1731. Optional medicaid coverage of low-income HIV-infected
                                individuals.
    Sec. 1732. Extending transitional Medicaid Assistance (TMA).
    Sec. 1733. Requirement of 12-month continuous coverage under certain
                                CHIP programs.
                             Subtitle E--Financing

    Sec. 1741. Payments to pharmacists.
    Sec. 1742. Prescription drug rebates.
    Sec. 1743. Extension of prescription drug discounts to enrollees of
                                medicaid managed care organizations.
    Sec. 1744. Payments for graduate medical education.
                      Subtitle F--Waste, Fraud, and Abuse

    Sec. 1751. Health-care acquired conditions.
    Sec. 1752. Evaluations and reports required under Medicaid Integrity
                                Program.
    Sec. 1753. Require providers and suppliers to adopt programs to reduce
                                waste, fraud, and abuse.
    Sec. 1754. Overpayments.
    Sec. 1755. Managed Care Organizations.
    Sec. 1756. Termination of provider participation under Medicaid and
                                CHIP if terminated under Medicare or other
                                State plan or child health plan.
    Sec. 1757.  Medicaid and CHIP exclusion from participation relating to
                                certain ownership, control, and management
                                affiliations.
    Sec. 1758.  Requirement to report expanded set of data elements under
                                MMIS to detect fraud and abuse.
    Sec. 1759. Billing agents, clearinghouses, or other alternate payees
                                required to register under Medicaid.
    Sec. 1760. Denial of payments for litigation-related misconduct.
                  Subtitle G--Puerto Rico and the Territories

    Sec. 1771. Puerto Rico and territories.
                           Subtitle H--Miscellaneous

    Sec. 1781. Technical corrections.
    Sec. 1782. Extension of QI program.
                      TITLE P--REVENUE-RELATED PROVISIONS

    Sec. 1801. Disclosures to facilitate identification of individuals
                                likely to be ineligible for the low-income
                                assistance under the Medicare prescription
                                drug program to assist Social Security
                                Administration's outreach to eligible
                                individuals.
    Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for
                                Trust Fund.
                       TITLE Q--MISCELLANEOUS PROVISIONS

    Sec. 1901. Repeal of trigger provision.
    Sec. 1902. Repeal of comparative cost adjustment (CCA) program.
    Sec. 1903. Extension of gainsharing demonstration.
    Sec. 1904. Grants to States for quality home visitation programs for
                                families with young children and families
                                expecting children.
    Sec. 1905. Improved coordination and protection for dual eligibles.

                      TITLE I--IMPROVING HEALTH CARE VALUE

               Subtitle A--Provisions Related to Medicare Part A

                         PART 1--MARKET BASKET UPDATES

    SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE.

        (a) In General.--Section 1888(e)(4)(E)(ii) of the Social Security
    Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
                (1) in subclause (III), by striking ``and'' at the end;
                (2) by redesignating subclause (IV) as subclause (VI); and
                (3) by inserting after subclause (III) the following new
            subclauses:
                                        ``(IV) for each of fiscal years
                                    2004 through 2009, the rate computed
                                    for the previous fiscal year increased
                                    by the skilled nursing facility market
                                    basket percentage change for the fiscal
                                    year involved;
                                        ``(V) for fiscal year 2010, the
                                    rate computed for the previous fiscal
                                    year; and''.
        (b) Delayed Effective Date.--Section 1888(e)(4)(E)(ii)(V) of the
    Social Security Act, as inserted by subsection (a)(3), shall not apply
    to payment for days before January 1, 2010.

    SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.

        (a) In General.--Section 1886(j)(3)(C) of the Social Security Act
    (42 U.S.C. 1395ww(j)(3)(C)) is amended by striking ``and 2009'' and
    inserting ``through 2010''.
        (b) Delayed Effective Date.--The amendment made by subsection (a)
    shall not apply to payment units occurring before January 1, 2010.

    SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATES THAT DO NOT ALREADY INCORPORATE SUCH
                  IMPROVEMENTS.

        (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social
    Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
                (1) in clause (iii)--
                        (A) by striking ``(iii) For purposes of this
                    subparagraph,'' and inserting ``(iii)(I) For purposes
                    of this subparagraph, subject to the productivity
                    adjustment described in subclause (II),''; and
                        (B) by adding at the end the following new
                    subclause:
        ``(II) The productivity adjustment described in this subclause,
    with respect to an increase or change for a fiscal year or year or cost
    reporting period, or other annual period, is a productivity offset
    equal to the percentage change in the 10-year moving average of annual
    economy-wide private nonfarm business multi-factor productivity (as
    recently published before the promulgation of such increase for the
    year or period involved). Except as otherwise provided, any reference
    to the increase described in this clause shall be a reference to the
    percentage increase described in subclause (I) minus the percentage
    change under this subclause.'';
                (2) in the first sentence of clause (viii)(I), by inserting
            ``(but not below zero)'' after ``shall be reduced''; and
                (3) in the first sentence of clause (ix)(I)--
                        (A) by inserting ``(determined without regard to
                    clause (iii)(II)'' after ``clause (i)'' the second time
                    it appears; and
                        (B) by inserting ``(but not below zero)'' after
                    ``reduced''.
        (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of such Act
    (42 U.S.C. 1395yy(e)(5)(B)) is amended by inserting ``subject to the
    productivity adjustment described in section 1886(b)(3)(B)(iii)(II)''
    after ``as calculated by the Secretary''.
        (c) Long-Term Care Hospitals.--Section 1886(m) of the Social
    Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the
    following new paragraph:
                ``(3) Productivity adjustment.--In implementing the system
            described in paragraph (1) for discharges occurring during the
            rate year ending in 2010 or any subsequent rate year for a
            hospital, to the extent that an annual percentage increase
            factor applies to a base rate for such discharges for the
            hospital, such factor shall be subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II).''.
        (d) Inpatient Rehabilitation Facilities.--The second sentence of
    section 1886(j)(3)(C) of the Social Security Act (42 U.S.C.
    1395ww(j)(3)(C)) is amended by inserting ``(subject to the productivity
    adjustment described in section 1886(b)(3)(B)(iii)(II))'' after
    ``appropriate percentage increase''.
        (e) Psychiatric Hospitals.--Section 1886 of the Social Security Act
    (42 U.S.C. 1395ww) is amended by adding at the end the following new
    subsection:
        ``(o) Prospective Payment for Psychiatric Hospitals.--
                ``(1) Reference to establishment and implementation of
            system.--For provisions related to the establishment and
            implementation of a prospective payment system for payments
            under this title for inpatient hospital services furnished by
            psychiatric hospitals (as described in clause (i) of subsection
            (d)(1)(B)) and psychiatric units (as described in the matter
            following clause (v) of such subsection), see section 124 of
            the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
            Act of 1999.
                ``(2) Productivity adjustment.--In implementing the system
            described in paragraph (1) for discharges occurring during the
            rate year ending in 2011 or any subsequent rate year for a
            psychiatric hospital or unit described in such paragraph, to
            the extent that an annual percentage increase factor applies to
            a base rate for such discharges for the hospital or unit,
            respectively, such factor shall be subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II).''.
        (f) Hospice Care.--Subclause (VII) of section 1814(i)(1)(C)(ii) of
    the Social Security Act (42 U.S.C. 1395f(i)(1)(C)(ii)) is amended by
    inserting after ``the market basket percentage increase'' the
    following: ``(which is subject to the productivity adjustment described
    in section 1886(b)(3)(B)(iii)(II))''.
        (g) Effective Date.--The amendments made by subsections (a), (b),
    (d), and (f) shall apply to annual increases effected for fiscal years
    beginning with fiscal year 2010.

                    PART 2--OTHER MEDICARE PART A PROVISIONS

    SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.

        (a) Change in Recalibration Factor.--
                (1) Analysis.--The Secretary of Health and Human Services
            shall conduct, using calendar year 2006 claims data, an initial
            analysis comparing total payments under title XVIII of the
            Social Security Act for skilled nursing facility services under
            the RUG-53 and under the RUG-44 classification systems.
                (2) Adjustment in recalibration factor.--Based on the
            initial analysis under paragraph (1), the Secretary shall
            adjust the case mix indexes under section 1888(e)(4)(G)(i) of
            the Social Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for
            fiscal year 2010 by the appropriate recalibration factor as
            proposed in the proposed rule for Medicare skilled nursing
            facilities issued by such Secretary on May 12, 2009 (74 Federal
            Register 22214 et seq.).
        (b) Change in Payment for Nontherapy Ancillary (NTA) Services and
    Therapy Services.--
                (1) Changes under current snf classification system.--
                        (A) In general.--Subject to subparagraph (B), the
                    Secretary of Health and Human Services shall, under the
                    system for payment of skilled nursing facility services
                    under section 1888(e) of the Social Security Act (42
                    U.S.C. 1395yy(e)), increase payment by 10 percent for
                    non-therapy ancillary services (as specified by the
                    Secretary in the notice issued on November 27, 1998 (63
                    Federal Register 65561 et seq.)) and shall decrease
                    payment for the therapy case mix component of such
                    rates by 5.5 percent.
                        (B) Effective date.--The changes in payment
                    described in subparagraph (A) shall apply for days on
                    or after January 1, 2010, and until the Secretary
                    implements an alternative case mix classification
                    system for payment of skilled nursing facility services
                    under section 1888(e) of the Social Security Act (42
                    U.S.C. 1395yy(e)).
                        (C) Implementation.--Notwithstanding any other
                    provision of law, the Secretary may implement by
                    program instruction or otherwise the provisions of this
                    paragraph.
                (2) Changes under a future snf case mix classification
            system.--
                        (A) Analysis.--
                                (i) In general.--The Secretary of Health
                            and Human Services shall analyze payments for
                            non-therapy ancillary services under a future
                            skilled nursing facility classification system
                            to ensure the accuracy of payment for non-
                            therapy ancillary services. Such analysis shall
                            consider use of appropriate indicators which
                            may include age, physical and mental status,
                            ability to perform activities of daily living,
                            prior nursing home stay, broad RUG category,
                            and a proxy for length of stay.
                                (ii) Application.--Such analysis shall be
                            conducted in a manner such that the future
                            skilled nursing facility classification system
                            is implemented to apply to services furnished
                            during a fiscal year beginning with fiscal year
                            2011.
                        (B) Consultation.--In conducting the analysis under
                    subparagraph (A), the Secretary shall consult with
                    interested parties, including the Medicare Payment
                    Advisory Commission and other interested stakeholders,
                    to identify appropriate predictors of nontherapy
                    ancillary costs.
                        (C) Rulemaking.--The Secretary shall include the
                    result of the analysis under subparagraph (A) in the
                    fiscal year 2011 rulemaking cycle for purposes of
                    implementation beginning for such fiscal year.
                        (D) Implementation.--Subject to subparagraph (E)
                    and consistent with subparagraph (A)(ii), the Secretary
                    shall implement changes to payments for non-therapy
                    ancillary services (which may include a separate rate
                    component for non-therapy ancillary services and may
                    include use of a model that predicts payment amounts
                    applicable for non-therapy ancillary services) under
                    such future skilled nursing facility services
                    classification system as the Secretary determines
                    appropriate based on the analysis conducted pursuant to
                    subparagraph (A).
                        (E) Budget neutrality.--The Secretary shall
                    implement changes described in subparagraph (D) in a
                    manner such that the estimated expenditures under such
                    future skilled nursing facility services classification
                    system for a fiscal year beginning with fiscal year
                    2011 with such changes would be equal to the estimated
                    expenditures that would otherwise occur under title
                    XVIII of the Social Security Act under such future
                    skilled nursing facility services classification system
                    for such year without such changes.
        (c) Outlier Policy for NTA and Therapy.--Section 1888(e) of the
    Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at the
    end the following new paragraph:
                ``(13) Outliers for nta and therapy.--
                        ``(A) In general.--With respect to outliers because
                    of unusual variations in the type or amount of
                    medically necessary care, beginning with October 1,
                    2010, the Secretary--
                                ``(i) shall provide for an addition or
                            adjustment to the payment amount otherwise made
                            under this section with respect to non-therapy
                            ancillary services in the case of such
                            outliers; and
                                ``(ii) may provide for such an addition or
                            adjustment to the payment amount otherwise made
                            under this section with respect to therapy
                            services in the case of such outliers.
                        ``(B) Outliers based on aggregate costs.--Outlier
                    adjustments or additional payments described in
                    subparagraph (A) shall be based on aggregate costs
                    during a stay in a skilled nursing facility and not on
                    the number of days in such stay.
                        ``(C) Budget neutrality.--The Secretary shall
                    reduce estimated payments that would otherwise be made
                    under the prospective payment system under this
                    subsection with respect to a fiscal year by 2 percent.
                    The total amount of the additional payments or payment
                    adjustments for outliers made under this paragraph with
                    respect to a fiscal year may not exceed 2 percent of
                    the total payments projected or estimated to be made
                    based on the prospective payment system under this
                    subsection for the fiscal year.''.
        (d) Conforming Amendments.--Section 1888(e)(8) of such Act (42
    U.S.C. 1395yy(e)(8)) is amended--
                (1) in subparagraph (A), by inserting ``and adjustment
            under section 1111(b) of the America's Affordable Health
            Choices Act of 2009;
                (2) in subparagraph (B), by striking ``and'';
                (3) in subparagraph (C), by striking the period and
            inserting ``; and''; and
                (4) by adding at the end the following new subparagraph:
                        ``(D) the establishment of outliers under paragraph
                    (13).''.

    SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUSTMENTS IN RESPONSE TO
                  COVERAGE EXPANSION.

        (a) DSH Report.--
                (1) In general.--Not later than January 1, 2016, the
            Secretary of Health and Human Services shall submit to Congress
            a report on Medicare DSH taking into account the impact of the
            health care reforms carried out under subdivision A in reducing
            the number of uninsured individuals. The report shall include
            recommendations relating to the following:
                        (A) The appropriate amount, targeting, and
                    distribution of Medicare DSH to compensate for higher
                    Medicare costs associated with serving low-income
                    beneficiaries (taking into account variations in the
                    empirical justification for Medicare DSH attributable
                    to hospital characteristics, including bed size),
                    consistent with the original intent of Medicare DSH.
                        (B) The appropriate amount, targeting, and
                    distribution of Medicare DSH to hospitals given their
                    continued uncompensated care costs, to the extent such
                    costs remain.
                (2) Coordination with medicaid dsh report.--The Secretary
            shall coordinate the report under this subsection with the
            report on Medicaid DSH under section 1704(a).
        (b) Payment Adjustments in Response to Coverage Expansion.--
                (1) In general.--If there is a significant decrease in the
            national rate of uninsurance as a result of this division (as
            determined under paragraph (2)(A)), then the Secretary of
            Health and Human Services shall, beginning in fiscal year 2017,
            implement the following adjustments to Medicare DSH:
                        (A) The amount of Medicare DSH shall be adjusted
                    based on the recommendations of the report under
                    subsection (a)(1)(A) and shall take into account
                    variations in the empirical justification for Medicare
                    DSH attributable to hospital characteristics, including
                    bed size.
                        (B) Subject to paragraph (3), increase Medicare DSH
                    for a hospital by an additional amount that is based on
                    the amount of uncompensated care provided by the
                    hospital based on criteria for uncompensated care as
                    determined by the Secretary, which shall exclude bad
                    debt.
                (2) Significant decrease in national rate of uninsurance as
            a result of this division.--For purposes of this subsection--
                        (A) In general.--There is a ``significant decrease
                    in the national rate of uninsurance as a result of this
                    division'' if there is a decrease in the national rate
                    of uninsurance (as defined in subparagraph (B)) from
                    2012 to 2014 that exceeds 8 percentage points.
                        (B) National rate of uninsurance defined.--The term
                    ``national rate of uninsurance'' means, for a year,
                    such rate for the under-65 population for the year as
                    determined and published by the Bureau of the Census in
                    its Current Population Survey in or about September of
                    the succeeding year.
                (3) Uncompensated care increase.--
                        (A) Computation of dsh savings.--For each fiscal
                    year (beginning with fiscal year 2017), the Secretary
                    shall estimate the aggregate reduction in Medicare DSH
                    that will result from the adjustment under paragraph
                    (1)(A).
                        (B) Structure of payment increase.--The Secretary
                    shall compute the increase in Medicare DSH under
                    paragraph (1)(B) for a fiscal year in accordance with a
                    formula established by the Secretary that provides
                    that--
                                (i) the aggregate amount of such increase
                            for the fiscal year does not exceed 50 percent
                            of the aggregate reduction in Medicare DSH
                            estimated by the Secretary for such fiscal
                            year; and
                                (ii) hospitals with higher levels of
                            uncompensated care receive a greater increase.
        (c) Medicare DSH.--In this section, the term ``Medicare DSH'' means
    adjustments in payments under section 1886(d)(5)(F) of the Social
    Security Act (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital
    services furnished by disproportionate share hospitals.

                    Subtitle B--Provisions Related to Part B

                          PART 1--PHYSICIANS' SERVICES

    SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

        (a) Transitional Update for 2010.--Section 1848(d) of the Social
    Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the end the
    following new paragraph:
                ``(10) Update for 2010.--The update to the single
            conversion factor established in paragraph (1)(C) for 2010
            shall be the percentage increase in the MEI (as defined in
            section 1842(i)(3)) for that year.''.
        (b) Rebasing SGR Using 2009; Limitation on Cumulative Adjustment
    Period.--Section 1848(d)(4) of such Act (42 U.S.C. 1395w-4(d)(4)) is
    amended--
                (1) in subparagraph (B), by striking ``subparagraph (D)''
            and inserting ``subparagraphs (D) and (G)''; and
                (2) by adding at the end the following new subparagraph:
                        ``(G) Rebasing using 2009 for future update
                    adjustments.--In determining the update adjustment
                    factor under subparagraph (B) for 2011 and subsequent
                    years--
                                ``(i) the allowed expenditures for 2009
                            shall be equal to the amount of the actual
                            expenditures for physicians' services during
                            2009; and
                                ``(ii) the reference in subparagraph
                            (B)(ii)(I) to `April 1, 1996' shall be treated
                            as a reference to `January 1, 2009 (or, if
                            later, the first day of the fifth year before
                            the year involved)'.''.
        (c) Limitation on Physicians' Services Included in Target Growth
    Rate Computation to Services Covered Under Physician Fee Schedule.--
    Effective for services furnished on or after January 1, 2009, section
    1848(f)(4)(A) of such Act is amended striking ``(such as clinical'' and
    all that follows through ``in a physician's office'' and inserting
    ``for which payment under this part is made under the fee schedule
    under this section, for services for practitioners described in section
    1842(b)(18)(C) on a basis related to such fee schedule, or for services
    described in section 1861(p) (other than such services when furnished
    in the facility of a provider of services)''.
        (d) Establishment of Separate Target Growth Rates for Categories of
    Services.--
                (1) Establishment of service categories.--Subsection (j) of
            section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
            amended by adding at the end the following new paragraph:
                ``(5) Service categories.--For services furnished on or
            after January 1, 2009, each of the following categories of
            physicians' services (as defined in paragraph (3)) shall be
            treated as a separate `service category':
                        ``(A) Evaluation and management services that are
                    procedure codes (for services covered under this title)
                    for--
                                ``(i) services in the category designated
                            Evaluation and Management in the Health Care
                            Common Procedure Coding System (established by
                            the Secretary under subsection (c)(5) as of
                            December 31, 2009, and as subsequently modified
                            by the Secretary); and
                                ``(ii) preventive services (as defined in
                            section 1861(iii)) for which payment is made
                            under this section.
                        ``(B) All other services not described in
                    subparagraph (A).
            Service categories established under this paragraph shall apply
            without regard to the specialty of the physician furnishing the
            service.''.
                (2) Establishment of separate conversion factors for each
            service category.--Subsection (d)(1) of section 1848 of the
            Social Security Act (42 U.S.C. 1395w-4) is amended--
                        (A) in subparagraph (A)--
                                (i) by designating the sentence beginning
                            ``The conversion factor'' as clause (i) with
                            the heading ``Application of single conversion
                            factor.--'' and with appropriate indentation;
                                (ii) by striking ``The conversion factor''
                            and inserting ``Subject to clause (ii), the
                            conversion factor''; and
                                (iii) by adding at the end the following
                            new clause:
                                ``(ii) Application of multiple conversion
                            factors beginning with 2011.--
                                        ``(I) In general.--In applying
                                    clause (i) for years beginning with
                                    2011, separate conversion factors shall
                                    be established for each service
                                    category of physicians' services (as
                                    defined in subsection (j)(5)) and any
                                    reference in this section to a
                                    conversion factor for such years shall
                                    be deemed to be a reference to the
                                    conversion factor for each of such
                                    categories.
                                        ``(II) Initial conversion
                                    factors.--Such factors for 2011 shall
                                    be based upon the single conversion
                                    factor for the previous year multiplied
                                    by the update established under
                                    paragraph (11) for such category for
                                    2011.
                                        ``(III) Updating of conversion
                                    factors.--Such factor for a service
                                    category for a subsequent year shall be
                                    based upon the conversion factor for
                                    such category for the previous year and
                                    adjusted by the update established for
                                    such category under paragraph (11) for
                                    the year involved.''; and
                        (B) in subparagraph (D), by striking ``other
                    physicians' services'' and inserting ``for physicians'
                    services described in the service category described in
                    subsection (j)(5)(B)''.
                (3) Establishing updates for conversion factors for service
            categories.--Section 1848(d) of the Social Security Act (42
            U.S.C. 1395w-4(d)), as amended by subsection (a), is amended--
                        (A) in paragraph (4)(C)(iii), by striking ``The
                    allowed'' and inserting ``Subject to paragraph (11)(B),
                    the allowed''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(11) Updates for service categories beginning with
            2011.--
                        ``(A) In general.--In applying paragraph (4) for a
                    year beginning with 2011, the following rules apply:
                                ``(i) Application of separate update
                            adjustments for each service category.--
                            Pursuant to paragraph (1)(A)(ii)(I), the update
                            shall be made to the conversion factor for each
                            service category (as defined in subsection
                            (j)(5)) based upon an update adjustment factor
                            for the respective category and year and the
                            update adjustment factor shall be computed, for
                            a year, separately for each service category.
                                ``(ii) Computation of allowed and actual
                            expenditures based on service categories.--In
                            computing the prior year adjustment component
                            and the cumulative adjustment component under
                            clauses (i) and (ii) of paragraph (4)(B), the
                            following rules apply:
                                        ``(I) Application based on service
                                    categories.--The allowed expenditures
                                    and actual expenditures shall be the
                                    allowed and actual expenditures for the
                                    service category, as determined under
                                    subparagraph (B).
                                        ``(II) Application of category
                                    specific target growth rate.--The
                                    growth rate applied under clause
                                    (ii)(II) of such paragraph shall be the
                                    target growth rate for the service
                                    category involved under subsection
                                    (f)(5).
                        ``(B) Determination of allowed expenditures.--In
                    applying paragraph (4) for a year beginning with 2010,
                    notwithstanding subparagraph (C)(iii) of such
                    paragraph, the allowed expenditures for a service
                    category for a year is an amount computed by the
                    Secretary as follows:
                                ``(i) For 2010.--For 2010:
                                        ``(I) Total 2009 actual
                                    expenditures for all services included
                                    in sgr computation for each service
                                    category.--Compute total actual
                                    expenditures for physicians' services
                                    (as defined in subsection (f)(4)(A))
                                    for 2009 for each service category.
                                        ``(II) Increase by growth rate to
                                    obtain 2010 allowed expenditures for
                                    service category.--Compute allowed
                                    expenditures for the service category
                                    for 2010 by increasing the allowed
                                    expenditures for the service category
                                    for 2009 computed under subclause (I)
                                    by the target growth rate for such
                                    service category under subsection (f)
                                    for 2010.
                                ``(ii) For subsequent years.--For a
                            subsequent year, take the amount of allowed
                            expenditures for such category for the
                            preceding year (under clause (i) or this
                            clause) and increase it by the target growth
                            rate determined under subsection (f) for such
                            category and year.''.
                (4) Application of separate target growth rates for each
            category.--
                        (A) In general.--Section 1848(f) of the Social
                    Security Act (42 U.S.C. 1395w-4(f)) is amended by
                    adding at the end the following new paragraph:
                ``(5) Application of separate target growth rates for each
            service category beginning with 2010.--The target growth rate
            for a year beginning with 2010 shall be computed and applied
            separately under this subsection for each service category (as
            defined in subsection (j)(5)) and shall be computed using the
            same method for computing the target growth rate except that
            the factor described in paragraph (2)(C) for--
                        ``(A) the service category described in subsection
                    (j)(5)(A) shall be increased by 0.02; and
                        ``(B) the service category described in subsection
                    (j)(5)(B) shall be increased by 0.01.''.
                        (B) Use of target growth rates.--Section 1848 of
                    such Act is further amended--
                                (i) in subsection (d)--
                                        (I) in paragraph (1)(E)(ii), by
                                    inserting ``or target'' after
                                    ``sustainable''; and
                                        (II) in paragraph (4)(B)(ii)(II),
                                    by inserting ``or target'' after
                                    ``sustainable''; and
                                (ii) in the heading of subsection (f), by
                            inserting ``and Target Growth Rate'' after
                            ``Sustainable Growth Rate'';
                                (iii) in subsection (f)(1)--
                                        (I) by striking ``and'' at the end
                                    of subparagraph (A);
                                        (II) in subparagraph (B), by
                                    inserting ``before 2010'' after ``each
                                    succeeding year'' and by striking the
                                    period at the end and inserting ``;
                                    and''; and
                                        (III) by adding at the end the
                                    following new subparagraph:
                        ``(C) November 1 of each succeeding year the target
                    growth rate for such succeeding year and each of the 2
                    preceding years.''; and
                                (iv) in subsection (f)(2), in the matter
                            before subparagraph (A), by inserting after
                            ``beginning with 2000'' the following: ``and
                            ending with 2009''.
        (e) Application to Accountable Care Organization Pilot Program.--In
    applying the target growth rate under subsections (d) and (f) of
    section 1848 of the Social Security Act to services furnished by a
    practitioner to beneficiaries who are attributable to an accountable
    care organization under the pilot program provided under section 1866D
    of such Act, the Secretary of Health and Human Services shall develop,
    not later than January 1, 2012, for application beginning with 2012, a
    method that--
                (1) allows each such organization to have its own
            expenditure targets and updates for such practitioners, with
            respect to beneficiaries who are attributable to that
            organization, that are consistent with the methodologies
            described in such subsection (f); and
                (2) provides that the target growth rate applicable to
            other physicians shall not apply to such physicians to the
            extent that the physicians' services are furnished through the
            accountable care organization.
    In applying paragraph (1), the Secretary of Health and Human Services
    may apply the difference in the update under such paragraph on a claim-
    by-claim or lump sum basis and such a payment shall be taken into
    account under the pilot program.

    SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

        (a) In General.--Section 1848(c)(2) of the Social Security Act (42
    U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new
    subparagraphs:
                        ``(K) Potentially misvalued codes.--
                                ``(i) In general.--The Secretary shall--
                                        ``(I) periodically identify
                                    services as being potentially misvalued
                                    using criteria specified in clause
                                    (ii); and
                                        ``(II) review and make appropriate
                                    adjustments to the relative values
                                    established under this paragraph for
                                    services identified as being
                                    potentially misvalued under subclause
                                    (I).
                                ``(ii) Identification of potentially
                            misvalued codes.--For purposes of identifying
                            potentially misvalued services pursuant to
                            clause (i)(I), the Secretary shall examine (as
                            the Secretary determines to be appropriate)
                            codes (and families of codes as appropriate)
                            for which there has been the fastest growth;
                            codes (and families of codes as appropriate)
                            that have experienced substantial changes in
                            practice expenses; codes for new technologies
                            or services within an appropriate period (such
                            as three years) after the relative values are
                            initially established for such codes; multiple
                            codes that are frequently billed in conjunction
                            with furnishing a single service; codes with
                            low relative values, particularly those that
                            are often billed multiple times for a single
                            treatment; codes which have not been subject to
                            review since the implementation of the RBRVS
                            (the so-called `Harvard-valued codes'); and
                            such other codes determined to be appropriate
                            by the Secretary.
                                ``(iii) Review and adjustments.--
                                        ``(I) The Secretary may use
                                    existing processes to receive
                                    recommendations on the review and
                                    appropriate adjustment of potentially
                                    misvalued services described clause
                                    (i)(II).
                                        ``(II) The Secretary may conduct
                                    surveys, other data collection
                                    activities, studies, or other analyses
                                    as the Secretary determines to be
                                    appropriate to facilitate the review
                                    and appropriate adjustment described in
                                    clause (i)(II).
                                        ``(III) The Secretary may use
                                    analytic contractors to identify and
                                    analyze services identified under
                                    clause (i)(I), conduct surveys or
                                    collect data, and make recommendations
                                    on the review and appropriate
                                    adjustment of services described in
                                    clause (i)(II).
                                        ``(IV) The Secretary may coordinate
                                    the review and appropriate adjustment
                                    described in clause (i)(II) with the
                                    periodic review described in
                                    subparagraph (B).
                                        ``(V) As part of the review and
                                    adjustment described in clause (i)(II),
                                    including with respect to codes with
                                    low relative values described in clause
                                    (ii), the Secretary may make
                                    appropriate coding revisions (including
                                    using existing processes for
                                    consideration of coding changes) which
                                    may include consolidation of individual
                                    services into bundled codes for payment
                                    under the fee schedule under subsection
                                    (b).
                                        ``(VI) The provisions of
                                    subparagraph (B)(ii)(II) shall apply to
                                    adjustments to relative value units
                                    made pursuant to this subparagraph in
                                    the same manner as such provisions
                                    apply to adjustments under subparagraph
                                    (B)(ii)(II).
                        ``(L) Validating relative value units.--
                                ``(i) In general.--The Secretary shall
                            establish a process to validate relative value
                            units under the fee schedule under subsection
                            (b).
                                ``(ii) Components and elements of work.--
                            The process described in clause (i) may include
                            validation of work elements (such as time,
                            mental effort and professional judgment,
                            technical skill and physical effort, and stress
                            due to risk) involved with furnishing a service
                            and may include validation of the pre, post,
                            and intra-service components of work.
                                ``(iii) Scope of codes.--The validation of
                            work relative value units shall include a
                            sampling of codes for services that is the same
                            as the codes listed under subparagraph (K)(ii).
                                ``(iv) Methods.--The Secretary may conduct
                            the validation under this subparagraph using
                            methods described in subclauses (I) through (V)
                            of subparagraph (K)(iii) as the Secretary
                            determines to be appropriate.
                                ``(v) Adjustments.--The Secretary shall
                            make appropriate adjustments to the work
                            relative value units under the fee schedule
                            under subsection (b). The provisions of
                            subparagraph (B)(ii)(II) shall apply to
                            adjustments to relative value units made
                            pursuant to this subparagraph in the same
                            manner as such provisions apply to adjustments
                            under subparagraph (B)(ii)(II).''.
        (b) Implementation.--
                (1) Funding.--For purposes of carrying out the provisions
            of subparagraphs (K) and (L) of 1848(c)(2) of the Social
            Security Act, as added by subsection (a), in addition to funds
            otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services for the Center for Medicare &
            Medicaid Services Program Management Account $20,000,000 for
            fiscal year 2010 and each subsequent fiscal year. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                (2) Administration.--
                        (A) Chapter 35 of title 44, United States Code and
                    the provisions of the Federal Advisory Committee Act (5
                    U.S.C. App.) shall not apply to this section or the
                    amendment made by this section.
                        (B) Notwithstanding any other provision of law, the
                    Secretary may implement subparagraphs (K) and (L) of
                    1848(c)(2) of the Social Security Act, as added by
                    subsection (a), by program instruction or otherwise.
                        (C) Section 4505(d) of the Balanced Budget Act of
                    1997 is repealed.
                        (D) Except for provisions related to
                    confidentiality of information, the provisions of the
                    Federal Acquisition Regulation shall not apply to this
                    section or the amendment made by this section.
                (3) Focusing cms resources on potentially overvalued
            codes.--Section 1868(a) of the Social Security Act (42 U.S.C.
            1395ee(a)) is repealed.

    SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

        Section 1833 of the Social Security Act (42 U.S.C. 1395l) is
    amended by adding at the end the following new subsection:
        ``(x) Incentive Payments for Efficient Areas.--
                ``(1) In general.--In the case of services furnished under
            the physician fee schedule under section 1848 on or after
            January 1, 2011, and before January 1, 2013, by a supplier that
            is paid under such fee schedule in an efficient area (as
            identified under paragraph (2)), in addition to the amount of
            payment that would otherwise be made for such services under
            this part, there also shall be paid (on a monthly or quarterly
            basis) an amount equal to 5 percent of the payment amount for
            the services under this part.
                ``(2) Identification of efficient areas.--
                        ``(A) In general.--Based upon available data, the
                    Secretary shall identify those counties or equivalent
                    areas in the United States in the lowest fifth
                    percentile of utilization based on per capita spending
                    under this part and part A for services provided in the
                    most recent year for which data are available as of the
                    date of the enactment of this subsection, as
                    standardized to eliminate the effect of geographic
                    adjustments in payment rates.
                        ``(B) Identification of counties where service is
                    furnished.--For purposes of paying the additional
                    amount specified in paragraph (1), if the Secretary
                    uses the 5-digit postal ZIP Code where the service is
                    furnished, the dominant county of the postal ZIP Code
                    (as determined by the United States Postal Service, or
                    otherwise) shall be used to determine whether the
                    postal ZIP Code is in a county described in
                    subparagraph (A).
                        ``(C) Limitation on review.--There shall be no
                    administrative or judicial review under section 1869,
                    1878, or otherwise, respecting--
                                ``(i) the identification of a county or
                            other area under subparagraph (A); or
                                ``(ii) the assignment of a postal ZIP Code
                            to a county or other area under subparagraph
                            (B).
                        ``(D) Publication of list of counties; posting on
                    website.--With respect to a year for which a county or
                    area is identified under this paragraph, the Secretary
                    shall identify such counties or areas as part of the
                    proposed and final rule to implement the physician fee
                    schedule under section 1848 for the applicable year.
                    The Secretary shall post the list of counties
                    identified under this paragraph on the Internet website
                    of the Centers for Medicare & Medicaid Services.''.

    SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY REPORTING INITIATIVE
                  (PQRI).

        (a) Feedback.--Section 1848(m)(5) of the Social Security Act (42
    U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new
    subparagraph:
                        ``(H) Feedback.--The Secretary shall provide timely
                    feedback to eligible professionals on the performance
                    of the eligible professional with respect to
                    satisfactorily submitting data on quality measures
                    under this subsection.''.
        (b) Appeals.--Such section is further amended--
                (1) in subparagraph (E), by striking ``There shall be'' and
            inserting ``Subject to subparagraph (I), there shall be''; and
                (2) by adding at the end the following new subparagraph:
                        ``(I) Informal appeals process.--Notwithstanding
                    subparagraph (E), by not later than January 1, 2011,
                    the Secretary shall establish and have in place an
                    informal process for eligible professionals to appeal
                    the determination that an eligible professional did not
                    satisfactorily submit data on quality measures under
                    this subsection.''.
        (c) Integration of Physician Quality Reporting and EHR Reporting.--
    Section 1848(m) of such Act is amended by adding at the end the
    following new paragraph:
                ``(7) Integration of physician quality reporting and ehr
            reporting.--Not later than January 1, 2012, the Secretary shall
            develop a plan to integrate clinical reporting on quality
            measures under this subsection with reporting requirements
            under subsection (o) relating to the meaningful use of
            electronic health records. Such integration shall consist of
            the following:
                        ``(A) The development of measures, the reporting of
                    which would both demonstrate--
                                ``(i) meaningful use of an electronic
                            health record for purposes of subsection (o);
                            and
                                ``(ii) clinical quality of care furnished
                            to an individual.
                        ``(B) The collection of health data to identify
                    deficiencies in the quality and coordination of care
                    for individuals eligible for benefits under this part.
                        ``(C) Such other activities as specified by the
                    Secretary.''.
        (d) Extension of Incentive Payments.--Section 1848(m)(1) of such
    Act (42 U.S.C. 1395w-4(m)(1)) is amended--
                (1) in subparagraph (A), by striking ``2010'' and inserting
            ``2012''; and
                (2) in subparagraph (B)(ii), by striking ``2009 and 2010''
            and inserting ``for each of the years 2009 through 2012''.

    SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

        (a) In General.--Section 1848(e) of the Social Security Act (42
    U.S.C.1395w-4(e)) is amended by adding at the end the following new
    paragraph:
                ``(6) Transition to use of msas as fee schedule areas in
            california.--
                        ``(A) In general.--
                                ``(i) Revision.--Subject to clause (ii) and
                            notwithstanding the previous provisions of this
                            subsection, for services furnished on or after
                            January 1, 2011, the Secretary shall revise the
                            fee schedule areas used for payment under this
                            section applicable to the State of California
                            using the Metropolitan Statistical Area (MSA)
                            iterative Geographic Adjustment Factor
                            methodology as follows:
                                        ``(I) The Secretary shall configure
                                    the physician fee schedule areas using
                                    the Core-Based Statistical Areas-
                                    Metropolitan Statistical Areas (each in
                                    this paragraph referred to as an
                                    `MSA'), as defined by the Director of
                                    the Office of Management and Budget, as
                                    the basis for the fee schedule areas.
                                    The Secretary shall employ an iterative
                                    process to transition fee schedule
                                    areas. First, the Secretary shall list
                                    all MSAs within the State by Geographic
                                    Adjustment Factor described in
                                    paragraph (2) (in this paragraph
                                    referred to as a `GAF') in descending
                                    order. In the first iteration, the
                                    Secretary shall compare the GAF of the
                                    highest cost MSA in the State to the
                                    weighted-average GAF of the group of
                                    remaining MSAs in the State. If the
                                    ratio of the GAF of the highest cost
                                    MSA to the weighted-average GAF of the
                                    rest of State is 1.05 or greater then
                                    the highest cost MSA becomes a separate
                                    fee schedule area.
                                        ``(II) In the next iteration, the
                                    Secretary shall compare the MSA of the
                                    second-highest GAF to the weighted-
                                    average GAF of the group of remaining
                                    MSAs. If the ratio of the second-
                                    highest MSA's GAF to the weighted-
                                    average of the remaining lower cost
                                    MSAs is 1.05 or greater, the second-
                                    highest MSA becomes a separate fee
                                    schedule area. The iterative process
                                    continues until the ratio of the GAF of
                                    the highest-cost remaining MSA to the
                                    weighted-average of the remaining
                                    lower-cost MSAs is less than 1.05, and
                                    the remaining group of lower cost MSAs
                                    form a single fee schedule area, If two
                                    MSAs have identical GAFs, they shall be
                                    combined in the iterative comparison.
                                ``(ii) Transition.--For services furnished
                            on or after January 1, 2011, and before January
                            1, 2016, in the State of California, after
                            calculating the work, practice expense, and
                            malpractice geographic indices described in
                            clauses (i), (ii), and (iii) of paragraph
                            (1)(A) that would otherwise apply through
                            application of this paragraph, the Secretary
                            shall increase any such index to the county-
                            based fee schedule area value on December 31,
                            2009, if such index would otherwise be less
                            than the value on January 1, 2010.
                        ``(B) Subsequent revisions.--
                                ``(i) Periodic review and adjustments in
                            fee schedule areas.--Subsequent to the process
                            outlined in paragraph (1)(C), not less often
                            than every three years, the Secretary shall
                            review and update the California Rest-of-State
                            fee schedule area using MSAs as defined by the
                            Director of the Office of Management and Budget
                            and the iterative methodology described in
                            subparagraph (A)(i).
                                ``(ii) Link with geographic index data
                            revision.--The revision described in clause (i)
                            shall be made effective concurrently with the
                            application of the periodic review of the
                            adjustment factors required under paragraph
                            (1)(C) for California for 2012 and subsequent
                            periods. Upon request, the Secretary shall make
                            available to the public any county-level or MSA
                            derived data used to calculate the geographic
                            practice cost index.
                        ``(C) References to fee schedule areas.--Effective
                    for services furnished on or after January 1, 2010, for
                    the State of California, any reference in this section
                    to a fee schedule area shall be deemed a reference to
                    an MSA in the State.''.
        (b) Conforming Amendment to Definition of Fee Schedule Area.--
    Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w(j)(2))
    is amended by striking ``The term'' and inserting ``Except as provided
    in subsection (e)(6)(C), the term''.

                         PART 2--MARKET BASKET UPDATES

    SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATES THAT DO NOT ALREADY INCORPORATE SUCH
                  IMPROVEMENTS.

        (a) Outpatient Hospitals.--
                (1) In general.--The first sentence of section
            1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C.
            1395l(t)(3)(C)(iv)) is amended--
                        (A) by inserting ``(which is subject to the
                    productivity adjustment described in subclause (II) of
                    such section)'' after ``1886(b)(3)(B)(iii)''; and
                        (B) by inserting ``(but not below 0)'' after
                    ``reduced''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall apply to increase factors for services furnished in years
            beginning with 2010.
        (b) Ambulance Services.--Section 1834(l)(3)(B) of such Act (42
    U.S.C. 1395m(l)(3)(B))) is amended by inserting before the period at
    the end the following: ``and, in the case of years beginning with 2010,
    subject to the productivity adjustment described in section
    1886(b)(3)(B)(iii)(II)''.
        (c) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of
    such Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
                (1) by redesignating clause (v) as clause (vi); and
                (2) by inserting after clause (iv) the following new
            clause:
        ``(v) In implementing the system described in clause (i), for
    services furnished during 2010 or any subsequent year, to the extent
    that an annual percentage change factor applies, such factor shall be
    subject to the productivity adjustment described in section
    1886(b)(3)(B)(iii)(II).''.
        (d) Laboratory Services.--Section 1833(h)(2)(A) of such Act (42
    U.S.C. 1395l(h)(2)(A)) is amended--
                (1) in clause (i), by striking ``for each of years 2009
            through 2013'' and inserting ``for 2009''; and
                (2) clause (ii)--
                        (A) by striking ``and'' at the end of subclause
                    (III);
                        (B) by striking the period at the end of subclause
                    (IV) and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subclause:
                ``(V) the annual adjustment in the fee schedules determined
            under clause (i) for years beginning with 2010 shall be subject
            to the productivity adjustment described in section
            1886(b)(3)(B)(iii)(II).''.
        (e) Certain Durable Medical Equipment.--Section 1834(a)(14) of such
    Act (42 U.S.C. 1395m(a)(14)) is amended--
                (1) in subparagraph (K), by inserting before the semicolon
            at the end the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)'';
                (2) in subparagraph (L)(i), by inserting after ``June
            2013,'' the following: ``subject to the productivity adjustment
            described in section 1886(b)(3)(B)(iii)(II),'';
                (3) in subparagraph (L)(ii), by inserting after ``June
            2013'' the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)''; and
                (4) in subparagraph (M), by inserting before the period at
            the end the following: ``, subject to the productivity
            adjustment described in section 1886(b)(3)(B)(iii)(II)''.

                            PART 3--OTHER PROVISIONS

    SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.

        (a) In General.--Section 1834(a)(7)(A)(iii) of the Social Security
    Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is amended--
                (1) in the heading, by inserting ``certain complex
            rehabilitative'' after ``option for''; and
                (2) by striking ``power-driven wheelchair'' and inserting
            ``complex rehabilitative power-driven wheelchair recognized by
            the Secretary as classified within group 3 or higher''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect on January 1, 2011, and shall apply to power-driven
    wheelchairs furnished on or after such date. Such amendments shall not
    apply to contracts entered into under section 1847 of the Social
    Security Act (42 U.S.C. 1395w-3) pursuant to a bid submitted under such
    section before October 1, 2010, under subsection (a)(1)(B)(i)(I) of
    such section.

    SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.

        Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C.
    1395l(t)(16)(C)), as amended by section 142 of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 110-
    275), is amended by striking, the first place it appears, ``January 1,
    2010'' and inserting ``January 1, 2012''.

    SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.

        Not later than 12 months after the date of enactment of this Act,
    the Medicare Payment Advisory Commission shall submit to Congress a
    report on the following:
                (1) The scope of coverage for home infusion therapy in the
            fee-for-service Medicare program under title XVIII of the
            Social Security Act, Medicare Advantage under part C of such
            title, the veteran's health care program under chapter 17 of
            title 38, United States Code, and among private payers,
            including an analysis of the scope of services provided by home
            infusion therapy providers to their patients in such programs.
                (2) The benefits and costs of providing such coverage under
            the Medicare program, including a calculation of the potential
            savings achieved through avoided or shortened hospital and
            nursing home stays as a result of Medicare coverage of home
            infusion therapy.
                (3) An assessment of sources of data on the costs of home
            infusion therapy that might be used to construct payment
            mechanisms in the Medicare program.
                (4) Recommendations, if any, on the structure of a payment
            system under the Medicare program for home infusion therapy,
            including an analysis of the payment methodologies used under
            Medicare Advantage plans and private health plans for the
            provision of home infusion therapy and their applicability to
            the Medicare program.

    SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS (ASCS) TO SUBMIT COST
                  DATA AND OTHER DATA.

        (a) Cost Reporting.--
                (1) In general.--Section 1833(i) of the Social Security Act
            (42 U.S.C. 1395l(i)) is amended by adding at the end the
            following new paragraph:
        ``(8) The Secretary shall require, as a condition of the agreement
    described in section 1832(a)(2)(F)(i), the submission of such cost
    report as the Secretary may specify, taking into account the
    requirements for such reports under section 1815 in the case of a
    hospital.''.
                (2) Development of cost report.--Not later than 3 years
            after the date of the enactment of this Act, the Secretary of
            Health and Human Services shall develop a cost report form for
            use under section 1833(i)(8) of the Social Security Act, as
            added by paragraph (1).
                (3) Audit requirement.--The Secretary shall provide for
            periodic auditing of cost reports submitted under section
            1833(i)(8) of the Social Security Act, as added by paragraph
            (1).
                (4) Effective date.--The amendment made by paragraph (1)
            shall apply to agreements applicable to cost reporting periods
            beginning 18 months after the date the Secretary develops the
            cost report form under paragraph (2).
        (b) Additional Data on Quality.--
                (1) In general.--Section 1833(i)(7) of such Act (42 U.S.C.
            1395l(i)(7)) is amended--
                        (A) in subparagraph (B), by inserting ``subject to
                    subparagraph (C),'' after ``may otherwise provide,'';
                    and
                        (B) by adding at the end the following new
                    subparagraph:
        ``(C) Under subparagraph (B) the Secretary shall require the
    reporting of such additional data relating to quality of services
    furnished in an ambulatory surgical facility, including data on health
    care associated infections, as the Secretary may specify.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall to reporting for years beginning with 2012.

    SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.

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

    SEC. 1146. MEDICARE IMPROVEMENT FUND.

        Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C.
    1395iii(b)(1)(A)) is amended to read as follows:
                        ``(A) the period beginning with fiscal year 2011
                    and ending with fiscal year 2019, $8,000,000,000;
                    and''.

    SEC. 1147. PAYMENT FOR IMAGING SERVICES.

        (a) Adjustment in Practice Expense to Reflect Higher Presumed
    Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w)
    is amended--
                (1) in subsection (b)(4)--
                        (A) in subparagraph (B), by striking ``subparagraph
                    (A)'' and inserting ``this paragraph''; and
                        (B) by adding at the end the following new
                    subparagraph:
                        ``(C) Adjustment in practice expense to reflect
                    higher presumed utilization.--In computing the number
                    of practice expense relative value units under
                    subsection (c)(2)(C)(ii) with respect to advanced
                    diagnostic imaging services (as defined in section
                    1834(e)(1)(B)), the Secretary shall adjust such number
                    of units so it reflects a 75 percent (rather than 50
                    percent) presumed rate of utilization of imaging
                    equipment.''; and
                (2) in subsection (c)(2)(B)(v)(II), by inserting ``and
            other provisions'' after ``OPD payment cap''.
        (b) Adjustment in Technical Component ``discount'' on Single-
    session Imaging to Consecutive Body Parts.--Section 1848(b)(4) of such
    Act is further amended by adding at the end the following new
    subparagraph:
                        ``(D) Adjustment in technical component discount on
                    single-session imaging involving consecutive body
                    parts.--The Secretary shall increase the reduction in
                    expenditures attributable to the multiple procedure
                    payment reduction applicable to the technical component
                    for imaging under the final rule published by the
                    Secretary in the Federal Register on November 21, 2005
                    (part 405 of title 42, Code of Federal Regulations)
                    from 25 percent to 50 percent.''.
        (c) Effective Date.--Except as otherwise provided, this section,
    and the amendments made by this section, shall apply to services
    furnished on or after January 1, 2011.

    SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.

        (a) Waiver of Surety Bond Requirement.--Section 1834(a)(16) of the
    Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by adding at
    the end the following: ``The requirement for a surety bond described in
    subparagraph (B) shall not apply in the case of a pharmacy (i) that has
    been enrolled under section 1866(j) as a supplier of durable medical
    equipment, prosthetics, orthotics, and supplies and has been issued
    (which may include renewal of) a provider number (as described in the
    first sentence of this paragraph) for at least 5 years, and (ii) for
    which a final adverse action (as defined in section 424.57(a) of title
    42, Code of Federal Regulations) has never been imposed.''.
        (b) Ensuring Supply of Oxygen Equipment.--
                (1) In general.--Section 1834(a)(5)(F) of the Social
            Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                        (A) in clause (ii), by striking ``After the'' and
                    inserting ``Except as provided in clause (iii), after
                    the''; and
                        (B) by adding at the end the following new clause:
                                ``(iii) Continuation of supply.--In the
                            case of a supplier furnishing such equipment to
                            an individual under this subsection as of the
                            27th month of the 36 months described in clause
                            (i), the supplier furnishing such equipment as
                            of such month shall continue to furnish such
                            equipment to such individual (either directly
                            or though arrangements with other suppliers of
                            such equipment) during any subsequent period of
                            medical need for the remainder of the
                            reasonable useful lifetime of the equipment, as
                            determined by the Secretary, regardless of the
                            location of the individual, unless another
                            supplier has accepted responsibility for
                            continuing to furnish such equipment during the
                            remainder of such period.''.
                (2) Effective date.--The amendments made by paragraph (1)
            shall take effect as of the date of the enactment of this Act
            and shall apply to the furnishing of equipment to individuals
            for whom the 27th month of a continuous period of use of oxygen
            equipment described in section 1834(a)(5)(F) of the Social
            Security Act occurs on or after July 1, 2010.
        (c) Treatment of Current Accreditation Applications.--Section
    1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is amended--
                (1) in clause (i)--
                        (A) by striking ``clause (ii)'' and inserting
                    ``clauses (ii) and (iii)''; and
                        (B) by striking ``and'' at the end;
                (2) by striking the period at the end of clause (ii)(II)
            and by inserting ``; and''; and
                (3) by adding at the end the following:
                                ``(iii) the requirement for accreditation
                            described in clause (i) shall not apply for
                            purposes of supplying diabetic testing
                            supplies, canes, and crutches in the case of a
                            pharmacy that is enrolled under section 1866(j)
                            as a supplier of durable medical equipment,
                            prosthetics, orthotics, and supplies.
                    Any supplier that has submitted an application for
                    accreditation before August 1, 2009, shall be deemed as
                    meeting applicable standards and accreditation
                    requirement under this subparagraph until such time as
                    the independent accreditation organization takes action
                    on the supplier's application.''.
        (d) Restoring 36-Month Oxygen Rental Period in Case of Supplier
    Bankruptcy for Certain Individuals.--Section 1834(a)(5)(F) of such Act
    (42 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end the
    following new clause:
                                ``(iii) Exception for bankruptcy.--If a
                            supplier of oxygen to an individual is declared
                            bankrupt and its assets are liquidated and at
                            the time of such declaration and liquidation
                            more than 24 months of rental payments have
                            been made, the individual may begin under this
                            subparagraph a new 36-month rental period with
                            another supplier of oxygen.''.

    SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.

        (a) In General.--The Medicare Payment Advisory Commission shall
    conduct a study regarding bone mass measurement, including computed
    tomography, duel-energy x-ray absorptriometry, and vertebral fracture
    assessment. The study shall focus on the following:
                (1) An assessment of the adequacy of Medicare payment rates
            for such services, taking into account costs of acquiring the
            necessary equipment, professional work time, and practice
            expense costs.
                (2) The impact of Medicare payment changes since 2006 on
            beneficiary access to bone mass measurement benefits in general
            and in rural and minority communities specifically.
                (3) A review of the clinically appropriate and recommended
            use among Medicare beneficiaries and how usage rates among such
            beneficiaries compares to such recommendations.
                (4) In conjunction with the findings under (3),
            recommendations, if necessary, regarding methods for reaching
            appropriate use of bone mass measurement studies among Medicare
            beneficiaries.
        (b) Report.--The Commission shall submit a report to the Congress,
    not later than 9 months after the date of the enactment of this Act,
    containing a description of the results of the study conducted under
    subsection (a) and the conclusions and recommendations, if any,
    regarding each of the issues described in paragraphs (1), (2), (3), and
    (4) of such subsection.

            Subtitle C--Provisions Related to Medicare Parts A and B

    SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.

        (a) Hospitals.--
                (1) In general.--Section 1886 of the Social Security Act
            (42 U.S.C. 1395ww), as amended by section 1103(a), is amended
            by adding at the end the following new subsection:
        ``(p) Adjustment to Hospital Payments for Excess Readmissions.--
                ``(1) In general.--With respect to payment for discharges
            from an applicable hospital (as defined in paragraph (5)(C))
            occurring during a fiscal year beginning on or after October 1,
            2011, in order to account for excess readmissions in the
            hospital, the Secretary shall reduce the payments that would
            otherwise be made to such hospital under subsection (d) (or
            section 1814(b)(3), as the case may be) for such a discharge by
            an amount equal to the product of--
                        ``(A) the base operating DRG payment amount (as
                    defined in paragraph (2)) for the discharge; and
                        ``(B) the adjustment factor (described in paragraph
                    (3)(A)) for the hospital for the fiscal year.
                ``(2) Base operating drg payment amount.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), for purposes of this subsection, the
                    term `base operating DRG payment amount' means, with
                    respect to a hospital for a fiscal year, the payment
                    amount that would otherwise be made under subsection
                    (d) for a discharge if this subsection did not apply,
                    reduced by any portion of such amount that is
                    attributable to payments under subparagraphs (B) and
                    (F) of paragraph (5).
                        ``(B) Adjustments.--For purposes of subparagraph
                    (A), in the case of a hospital that is paid under
                    section 1814(b)(3), the term `base operating DRG
                    payment amount' means the payment amount under such
                    section.
                ``(3) Adjustment factor.--
                        ``(A) In general.--For purposes of paragraph (1),
                    the adjustment factor under this paragraph for an
                    applicable hospital for a fiscal year is equal to the
                    greater of--
                                ``(i) the ratio described in subparagraph
                            (B) for the hospital for the applicable period
                            (as defined in paragraph (5)(D)) for such
                            fiscal year; or
                                ``(ii) the floor adjustment factor
                            specified in subparagraph (C).
                        ``(B) Ratio.--The ratio described in this
                    subparagraph for a hospital for an applicable period is
                    equal to 1 minus the ratio of--
                                ``(i) the aggregate payments for excess
                            readmissions (as defined in paragraph (4)(A))
                            with respect to an applicable hospital for the
                            applicable period; and
                                ``(ii) the aggregate payments for all
                            discharges (as defined in paragraph (4)(B))
                            with respect to such applicable hospital for
                            such applicable period.
                        ``(C) Floor adjustment factor.--For purposes of
                    subparagraph (A), the floor adjustment factor specified
                    in this subparagraph for--
                                ``(i) fiscal year 2012 is 0.99;
                                ``(ii) fiscal year 2013 is 0.98;
                                ``(iii) fiscal year 2014 is 0.97; or
                                ``(iv) a subsequent fiscal year is 0.95.
                ``(4) Aggregate payments, excess readmission ratio
            defined.--For purposes of this subsection:
                        ``(A) Aggregate payments for excess readmissions.--
                    The term `aggregate payments for excess readmissions'
                    means, for a hospital for a fiscal year, the sum, for
                    applicable conditions (as defined in paragraph (5)(A)),
                    of the product, for each applicable condition, of--
                                ``(i) the base operating DRG payment amount
                            for such hospital for such fiscal year for such
                            condition;
                                ``(ii) the number of admissions for such
                            condition for such hospital for such fiscal
                            year; and
                                ``(iii) the excess readmissions ratio (as
                            defined in subparagraph (C)) for such hospital
                            for the applicable period for such fiscal year
                            minus 1.
                        ``(B) Aggregate payments for all discharges.--The
                    term `aggregate payments for all discharges' means, for
                    a hospital for a fiscal year, the sum of the base
                    operating DRG payment amounts for all discharges for
                    all conditions from such hospital for such fiscal year.
                        ``(C) Excess readmission ratio.--
                                ``(i) In general.--Subject to clauses (ii)
                            and (iii), the term `excess readmissions ratio'
                            means, with respect to an applicable condition
                            for a hospital for an applicable period, the
                            ratio (but not less than 1.0) of--
                                        ``(I) the risk adjusted
                                    readmissions based on actual
                                    readmissions, as determined consistent
                                    with a readmission measure methodology
                                    that has been endorsed under paragraph
                                    (5)(A)(ii)(I), for an applicable
                                    hospital for such condition with
                                    respect to the applicable period; to
                                        ``(II) the risk adjusted expected
                                    readmissions (as determined consistent
                                    with such a methodology) for such
                                    hospital for such condition with
                                    respect to such applicable period.
                                ``(ii) Exclusion of certain readmissions.--
                            For purposes of clause (i), with respect to a
                            hospital, excess readmissions shall not include
                            readmissions for an applicable condition for
                            which there are fewer than a minimum number (as
                            determined by the Secretary) of discharges for
                            such applicable condition for the applicable
                            period and such hospital.
                                ``(iii) Adjustment.--In order to promote a
                            reduction over time in the overall rate of
                            readmissions for applicable conditions, the
                            Secretary may provide, beginning with
                            discharges for fiscal year 2014, for the
                            determination of the excess readmissions ratio
                            under subparagraph (C) to be based on a ranking
                            of hospitals by readmission ratios (from lower
                            to higher readmission ratios) normalized to a
                            benchmark that is lower than the 50th
                            percentile.
                ``(5) Definitions.--For purposes of this subsection:
                        ``(A) Applicable condition.--The term `applicable
                    condition' means, subject to subparagraph (B), a
                    condition or procedure selected by the Secretary among
                    conditions and procedures for which--
                                ``(i) readmissions (as defined in
                            subparagraph (E)) that represent conditions or
                            procedures that are high volume or high
                            expenditures under this title (or other
                            criteria specified by the Secretary); and
                                ``(ii) measures of such readmissions--
                                        ``(I) have been endorsed by the
                                    entity with a contract under section
                                    1890(a); and
                                        ``(II) such endorsed measures have
                                    appropriate exclusions for readmissions
                                    that are unrelated to the prior
                                    discharge (such as a planned
                                    readmission or transfer to another
                                    applicable hospital).
                        ``(B) Expansion of applicable conditions.--
                    Beginning with fiscal year 2013, the Secretary shall
                    expand the applicable conditions beyond the 3
                    conditions for which measures have been endorsed as
                    described in subparagraph (A)(ii)(I) as of the date of
                    the enactment of this subsection to the additional 4
                    conditions that have been so identified by the Medicare
                    Payment Advisory Commission in its report to Congress
                    in June 2007 and to other conditions and procedures
                    which may include an all-condition measure of
                    readmissions, as determined appropriate by the
                    Secretary. In expanding such applicable conditions, the
                    Secretary shall seek the endorsement described in
                    subparagraph (A)(ii)(I) but may apply such measures
                    without such an endorsement.
                        ``(C) Applicable hospital.--The term `applicable
                    hospital' means a subsection (d) hospital or a hospital
                    that is paid under section 1814(b)(3).
                        ``(D) Applicable period.--The term `applicable
                    period' means, with respect to a fiscal year, such
                    period as the Secretary shall specify for purposes of
                    determining excess readmissions.
                        ``(E) Readmission.--The term `readmission' means,
                    in the case of an individual who is discharged from an
                    applicable hospital, the admission of the individual to
                    the same or another applicable hospital within a time
                    period specified by the Secretary from the date of such
                    discharge. Insofar as the discharge relates to an
                    applicable condition for which there is an endorsed
                    measure described in subparagraph (A)(ii)(I), such time
                    period (such as 30 days) shall be consistent with the
                    time period specified for such measure.
                ``(6) Limitations on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise of--
                        ``(A) the determination of base operating DRG
                    payment amounts;
                        ``(B) the methodology for determining the
                    adjustment factor under paragraph (3), including excess
                    readmissions ratio under paragraph (4)(C), aggregate
                    payments for excess readmissions under paragraph
                    (4)(A), and aggregate payments for all discharges under
                    paragraph (4)(B), and applicable periods and applicable
                    conditions under paragraph (5);
                        ``(C) the measures of readmissions as described in
                    paragraph (5)(A)(ii); and
                        ``(D) the determination of a targeted hospital
                    under paragraph (8)(B)(i), the increase in payment
                    under paragraph (8)(B)(ii), the aggregate cap under
                    paragraph (8)(C)(i), the hospital-specific limit under
                    paragraph (8)(C)(ii), and the form of payment made by
                    the Secretary under paragraph (8)(D).
                ``(7) Monitoring inappropriate changes in admissions
            practices.--The Secretary shall monitor the activities of
            applicable hospitals to determine if such hospitals have taken
            steps to avoid patients at risk in order to reduce the
            likelihood of increasing readmissions for applicable
            conditions. If the Secretary determines that such a hospital
            has taken such a step, after notice to the hospital and
            opportunity for the hospital to undertake action to alleviate
            such steps, the Secretary may impose an appropriate sanction.
                ``(8) Assistance to certain hospitals.--
                        ``(A) In general.--For purposes of providing funds
                    to applicable hospitals to take steps described in
                    subparagraph (E) to address factors that may impact
                    readmissions of individuals who are discharged from
                    such a hospital, for fiscal years beginning on or after
                    October 1, 2011, the Secretary shall make a payment
                    adjustment for a hospital described in subparagraph
                    (B), with respect to each such fiscal year, by a
                    percent estimated by the Secretary to be consistent
                    with subparagraph (C).
                        ``(B) Targeted hospitals.--Subparagraph (A) shall
                    apply to an applicable hospital that--
                                ``(i) received (or, in the case of an
                            1814(b)(3) hospital, otherwise would have been
                            eligible to receive) $10,000,000 or more in
                            disproportionate share payments using the
                            latest available data as estimated by the
                            Secretary; and
                                ``(ii) provides assurances satisfactory to
                            the Secretary that the increase in payment
                            under this paragraph shall be used for purposes
                            described in subparagraph (E).
                        ``(C) Caps.--
                                ``(i) Aggregate cap.--The aggregate amount
                            of the payment adjustment under this paragraph
                            for a fiscal year shall not exceed 5 percent of
                            the estimated difference in the spending that
                            would occur for such fiscal year with and
                            without application of the adjustment factor
                            described in paragraph (3) and applied pursuant
                            to paragraph (1).
                                ``(ii) Hospital-specific limit.--The
                            aggregate amount of the payment adjustment for
                            a hospital under this paragraph shall not
                            exceed the estimated difference in spending
                            that would occur for such fiscal year for such
                            hospital with and without application of the
                            adjustment factor described in paragraph (3)
                            and applied pursuant to paragraph (1).
                        ``(D) Form of payment.--The Secretary may make the
                    additional payments under this paragraph on a lump sum
                    basis, a periodic basis, a claim by claim basis, or
                    otherwise.
                        ``(E) Use of additional payment.--Funding under
                    this paragraph shall be used by targeted hospitals for
                    transitional care activities designed to address the
                    patient noncompliance issues that result in higher than
                    normal readmission rates, such as one or more of the
                    following:
                                ``(i) Providing care coordination services
                            to assist in transitions from the targeted
                            hospital to other settings.
                                ``(ii) Hiring translators and interpreters.
                                ``(iii) Increasing services offered by
                            discharge planners.
                                ``(iv) Ensuring that individuals receive a
                            summary of care and medication orders upon
                            discharge.
                                ``(v) Developing a quality improvement plan
                            to assess and remedy preventable readmission
                            rates.
                                ``(vi) Assigning discharged individuals to
                            a medical home.
                                ``(vii) Doing other activities as
                            determined appropriate by the Secretary.
                        ``(F) GAO report on use of funds.--Not later than 3
                    years after the date on which funds are first made
                    available under this paragraph, the Comptroller General
                    of the United States shall submit to Congress a report
                    on the use of such funds.
                        ``(G) Disproportionate share hospital payment.--In
                    this paragraph, the term `disproportionate share
                    hospital payment' means an additional payment amount
                    under subsection (d)(5)(F).''.
        (b) Application to Critical Access Hospitals.--Section 1814(l) of
    the Social Security Act (42 U.S.C. 1395f(l)) is amended--
                (1) in paragraph (5)--
                        (A) by striking ``and'' at the end of subparagraph
                    (C);
                        (B) by striking the period at the end of
                    subparagraph (D) and inserting ``; and'';
                        (C) by inserting at the end the following new
                    subparagraph:
                ``(E) The methodology for determining the adjustment factor
            under paragraph (5), including the determination of aggregate
            payments for actual and expected readmissions, applicable
            periods, applicable conditions and measures of readmissions.'';
            and
                        (D) by redesignating such paragraph as paragraph
                    (6); and
                (2) by inserting after paragraph (4) the following new
            paragraph:
        ``(5) The adjustment factor described in section 1886(p)(3) shall
    apply to payments with respect to a critical access hospital with
    respect to a cost reporting period beginning in fiscal year 2012 and
    each subsequent fiscal year (after application of paragraph (4) of this
    subsection) in a manner similar to the manner in which such section
    applies with respect to a fiscal year to an applicable hospital as
    described in section 1886(p)(2).''.
        (c) Post Acute Care Providers.--
                (1) Interim policy.--
                        (A) In general.--With respect to a readmission to
                    an applicable hospital or a critical access hospital
                    (as described in section 1814(l) of the Social Security
                    Act) from a post acute care provider (as defined in
                    paragraph (3)) and such a readmission is not governed
                    by section 412.531 of title 42, Code of Federal
                    Regulations, if the claim submitted by such a post-
                    acute care provider under title XVIII of the Social
                    Security Act indicates that the individual was
                    readmitted to a hospital from such a post-acute care
                    provider or admitted from home and under the care of a
                    home health agency within 30 days of an initial
                    discharge from an applicable hospital or critical
                    access hospital, the payment under such title on such
                    claim shall be the applicable percent specified in
                    subparagraph (B) of the payment that would otherwise be
                    made under the respective payment system under such
                    title for such post-acute care provider if this
                    subsection did not apply.
                        (B) Applicable percent defined.--For purposes of
                    subparagraph (A), the applicable percent is--
                                (i) for fiscal or rate year 2012 is 0.996;
                                (ii) for fiscal or rate year 2013 is 0.993;
                            and
                                (iii) for fiscal or rate year 2014 is 0.99.
                        (C) Effective date.--Subparagraph (1) shall apply
                    to discharges or services furnished (as the case may be
                    with respect to the applicable post acute care
                    provider) on or after the first day of the fiscal year
                    or rate year, beginning on or after October 1, 2011,
                    with respect to the applicable post acute care
                    provider.
                (2) Development and application of performance measures.--
                        (A) In general.--The Secretary of Health and Human
                    Services shall develop appropriate measures of
                    readmission rates for post acute care providers. The
                    Secretary shall seek endorsement of such measures by
                    the entity with a contract under section 1890(a) of the
                    Social Security Act but may adopt and apply such
                    measures under this paragraph without such an
                    endorsement. The Secretary shall expand such measures
                    in a manner similar to the manner in which applicable
                    conditions are expanded under paragraph (5)(B) of
                    section 1886(p) of the Social Security Act, as added by
                    subsection (a).
                        (B) Implementation.--The Secretary shall apply, on
                    or after October 1, 2014, with respect to post acute
                    care providers, policies similar to the policies
                    applied with respect to applicable hospitals and
                    critical access hospitals under the amendments made by
                    subsection (a). The provisions of paragraph (1) shall
                    apply with respect to any period on or after October 1,
                    2014, and before such application date described in the
                    previous sentence in the same manner as such provisions
                    apply with respect to fiscal or rate year 2014.
                        (C) Monitoring and penalties.--The provisions of
                    paragraph (7) of such section 1886(p) shall apply to
                    providers under this paragraph in the same manner as
                    they apply to hospitals under such section.
                (3) Definitions.--For purposes of this subsection:
                        (A) Post acute care provider.--The term ``post
                    acute care provider'' means--
                                (i) a skilled nursing facility (as defined
                            in section 1819(a) of the Social Security Act);
                                (ii) an inpatient rehabilitation facility
                            (described in section 1886(h)(1)(A) of such
                            Act);
                                (iii) a home health agency (as defined in
                            section 1861(o) of such Act); and
                                (iv) a long term care hospital (as defined
                            in section 1861(ccc) of such Act).
                        (B) Other terms.--The terms ``applicable
                    condition'', ``applicable hospital'', and
                    ``readmission'' have the meanings given such terms in
                    section 1886(p)(5) of the Social Security Act, as added
                    by subsection (a)(1).
        (d) Physicians.--
                (1) Study.--The Secretary of Health and Human Services
            shall conduct a study to determine how the readmissions policy
            described in the previous subsections could be applied to
            physicians.
                (2) Considerations.--In conducting the study, the Secretary
            shall consider approaches such as--
                        (A) creating a new code (or codes) and payment
                    amount (or amounts) under the fee schedule in section
                    1848 of the Social Security Act (in a budget neutral
                    manner) for services furnished by an appropriate
                    physician who sees an individual within the first week
                    after discharge from a hospital or critical access
                    hospital;
                        (B) developing measures of rates of readmission for
                    individuals treated by physicians;
                        (C) applying a payment reduction for physicians who
                    treat the patient during the initial admission that
                    results in a readmission; and
                        (D) methods for attributing payments or payment
                    reductions to the appropriate physician or physicians.
                (3) Report.--The Secretary shall issue a public report on
            such study not later than the date that is one year after the
            date of the enactment of this Act.
        (e) Funding.--For purposes of carrying out the provisions of this
    section, in addition to funds otherwise available, out of any funds in
    the Treasury not otherwise appropriated, there are appropriated to the
    Secretary of Health and Human Services for the Center for Medicare &
    Medicaid Services Program Management Account $25,000,000 for each
    fiscal year beginning with 2010. Amounts appropriated under this
    subsection for a fiscal year shall be available until expended.

    SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING
                  PILOT PROGRAM.

        (a) Plan.--
                (1) In general.--The Secretary of Health and Human Services
            (in this section referred to as the ``Secretary'') shall
            develop a detailed plan to reform payment for post acute care
            (PAC) services under the Medicare program under title XVIII of
            the Social Security Act (in this section referred to as the
            ``Medicare program)''. The goals of such payment reform are
            to--
                        (A) improve the coordination, quality, and
                    efficiency of such services; and
                        (B) improve outcomes for individuals such as
                    reducing the need for readmission to hospitals from
                    providers of such services.
                (2) Bundling post acute services.--The plan described in
            paragraph (1) shall include detailed specifications for a
            bundled payment for post acute services (in this section
            referred to as the ``post acute care bundle''), and may include
            other approaches determined appropriate by the Secretary.
                (3) Post acute services.--For purposes of this section, the
            term ``post acute services'' means services for which payment
            may be made under the Medicare program that are furnished by
            skilled nursing facilities, inpatient rehabilitation
            facilities, long term care hospitals, hospital based outpatient
            rehabilitation facilities and home health agencies to an
            individual after discharge of such individual from a hospital,
            and such other services determined appropriate by the
            Secretary.
        (b) Details.--The plan described in subsection (a)(1) shall include
    consideration of the following issues:
                (1) The nature of payments under a post acute care bundle,
            including the type of provider or entity to whom payment should
            be made, the scope of activities and services included in the
            bundle, whether payment for physicians' services should be
            included in the bundle, and the period covered by the bundle.
                (2) Whether the payment should be consolidated with the
            payment under the inpatient prospective system under section
            1886 of the Social Security Act (in this section referred to as
            MS-DRGs) or a separate payment should be established for such
            bundle, and if a separate payment is established, whether it
            should be made only upon use of post acute care services or for
            every discharge.
                (3) Whether the bundle should be applied across all
            categories of providers of inpatient services (including
            critical access hospitals) and post acute care services or
            whether it should be limited to certain categories of
            providers, services, or discharges, such as high volume or high
            cost MS-DRGs.
                (4) The extent to which payment rates could be established
            to achieve offsets for efficiencies that could be expected to
            be achieved with a bundle payment, whether such rates should be
            established on a national basis or for different geographic
            areas, should vary according to discharge, case mix, outliers,
            and geographic differences in wages or other appropriate
            adjustments, and how to update such rates.
                (5) The nature of protections needed for individuals under
            a system of bundled payments to ensure that individuals receive
            quality care, are furnished the level and amount of services
            needed as determined by an appropriate assessment instrument,
            are offered choice of provider, and the extent to which
            transitional care services would improve quality of care for
            individuals and the functioning of a bundled post-acute system.
                (6) The nature of relationships that may be required
            between hospitals and providers of post acute care services to
            facilitate bundled payments, including the application of
            gainsharing, anti-referral, anti-kickback, and anti-trust laws.
                (7) Quality measures that would be appropriate for
            reporting by hospitals and post acute providers (such as
            measures that assess changes in functional status and quality
            measures appropriate for each type of post acute services
            provider including how the reporting of such quality measures
            could be coordinated with other reporting of such quality
            measures by such providers otherwise required).
                (8) How cost-sharing for a post acute care bundle should be
            treated relative to current rules for cost-sharing for
            inpatient hospital, home health, skilled nursing facility, and
            other services.
                (9) How other programmatic issues should be treated in a
            post acute care bundle, including rules specific to various
            types of post-acute providers such as the post-acute transfer
            policy, three-day hospital stay to qualify for services
            furnished by skilled nursing facilities, and the coordination
            of payments and care under the Medicare program and the
            Medicaid program.
                (10) Such other issues as the Secretary deems appropriate.
        (c) Consultations and Analysis.--
                (1) Consultation with stakeholders.--In developing the plan
            under subsection (a)(1), the Secretary shall consult with
            relevant stakeholders and shall consider experience with such
            research studies and demonstrations that the Secretary
            determines appropriate.
                (2) Analysis and data collection.--In developing such plan,
            the Secretary shall--
                        (A) analyze the issues described in subsection (b)
                    and other issues that the Secretary determines
                    appropriate;
                        (B) analyze the impacts (including geographic
                    impacts) of post acute service reform approaches,
                    including bundling of such services on individuals,
                    hospitals, post acute care providers, and physicians;
                        (C) use existing data (such as data submitted on
                    claims) and collect such data as the Secretary
                    determines are appropriate to develop such plan
                    required in this section; and
                        (D) if patient functional status measures are
                    appropriate for the analysis, to the extent practical,
                    build upon the CARE tool being developed pursuant to
                    section 5008 of the Deficit Reduction Act of 2005.
        (d) Administration.--
                (1) Funding.--For purposes of carrying out the provisions
            of this section, in addition to funds otherwise available, out
            of any funds in the Treasury not otherwise appropriated, there
            are appropriated to the Secretary for the Center for Medicare &
            Medicaid Services Program Management Account $15,000,000 for
            each of the fiscal years 2010 through 2012. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                (2) Expedited data collection.--Chapter 35 of title 44,
            United States Code shall not apply to this section.
        (e) Public Reports.--
                (1) Interim reports.--The Secretary shall issue interim
            public reports on a periodic basis on the plan described in
            subsection (a)(1), the issues described in subsection (b), and
            impact analyses as the Secretary determines appropriate.
                (2) Final report.--Not later than the date that is 3 years
            after the date of the enactment of this Act, the Secretary
            shall issue a final public report on such plan, including
            analysis of issues described in subsection (b) and impact
            analyses.
        (f) Conversion of Acute Care Episode Demonstration to Pilot Program
    and Expansion To Include Post Acute Services.--
                (1) In general.--Part E of title XVIII of the Social
            Security Act is amended by inserting after section 1866C the
            following new section:

    ``SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT
                  PROGRAM AND EXPANSION TO INCLUDE POST ACUTE SERVICES.

        ``(a) In General.--By not later than January 1, 2011, the Secretary
    shall, for the purpose of promoting the use of bundled payments to
    promote efficient and high quality delivery of care--
                ``(1) convert the acute care episode demonstration program
            conducted under section 1866C to a pilot program; and
                ``(2) subject to subsection (c), expand such program as so
            converted to include post acute services and such other
            services the Secretary determines to be appropriate, which may
            include transitional services.
        ``(b) Scope.--The pilot program under subsection (a) may include
    additional geographic areas and additional conditions which account for
    significant program spending, as defined by the Secretary. Nothing in
    this subsection shall be construed as limiting the number of hospital
    and physician groups or the number of hospital and post-acute provider
    groups that may participate in the pilot program.
        ``(c) Limitation.--The Secretary shall only expand the pilot
    program under subsection (a)(2) if the Secretary finds that--
                ``(1) the demonstration program under section 1866C and
            pilot program under this section maintain or increase the
            quality of care received by individuals enrolled under this
            title; and
                ``(2) such demonstration program and pilot program reduce
            program expenditures and, based on the certification under
            subsection (d), that the expansion of such pilot program would
            result in estimated spending that would be less than what
            spending would otherwise be in the absence of this section.
        ``(d) Certification.--For purposes of subsection (c), the Chief
    Actuary of the Centers for Medicare & Medicaid Services shall certify
    whether expansion of the pilot program under this section would result
    in estimated spending that would be less than what spending would
    otherwise be in the absence of this section.
        ``(e) Voluntary Participation.--Nothing in this paragraph shall be
    construed as requiring the participation of an entity in the pilot
    program under this section.''.
                (2) Conforming amendment.--Section 1866C(b) of the Social
            Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking
            ``The Secretary'' and inserting ``Subject to section 1866D, the
            Secretary''.

    SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.

        Section 1895(b)(3)(B)(ii) of the Social Security Act (42 U.S.C.
    1395fff(b)(3)(B)(ii)) is amended--
                (1) in subclause (IV), by striking ``and'';
                (2) by redesignating subclause (V) as subclause (VII); and
                (3) by inserting after subclause (IV) the following new
            subclauses:
                                        ``(V) 2007, 2008, and 2009, subject
                                    to clause (v), the home health market
                                    basket percentage increase;
                                        ``(VI) 2010, subject to clause (v),
                                    0 percent; and''.

    SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

        (a) Acceleration of Adjustment for Case Mix Changes.--Section
    1895(b)(3)(B) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B))
    is amended--
                (1) in clause (iv), by striking ``Insofar as'' and
            inserting ``Subject to clause (vi), insofar as''; and
                (2) by adding at the end the following new clause:
                                ``(vi) Special rule for case mix changes
                            for 2011.--
                                        ``(I) In general.--With respect to
                                    the case mix adjustments established in
                                    section 484.220(a) of title 42, Code of
                                    Federal Regulations, the Secretary
                                    shall apply, in 2010, the adjustment
                                    established in paragraph (3) of such
                                    section for 2011, in addition to
                                    applying the adjustment established in
                                    paragraph (2) for 2010.
                                        ``(II) Construction.--Nothing in
                                    this clause shall be construed as
                                    limiting the amount of adjustment for
                                    case mix for 2010 or 2011 if more
                                    recent data indicate an appropriate
                                    adjustment that is greater than the
                                    amount established in the section
                                    described in subclause (I).''.
        (b) Rebasing Home Health Prospective Payment Amount.--Section
    1895(b)(3)(A) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A))
    is amended--
                (1) in clause (i)--
                        (A) in subclause (III), by inserting ``and before
                    2011'' after ``after the period described in subclause
                    (II)''; and
                        (B) by inserting after subclause (III) the
                    following new subclauses:
                                        ``(IV) Subject to clause (iii)(I),
                                    for 2011, such amount (or amounts)
                                    shall be adjusted by a uniform
                                    percentage determined to be appropriate
                                    by the Secretary based on analysis of
                                    factors such as changes in the average
                                    number and types of visits in an
                                    episode, the change in intensity of
                                    visits in an episode, growth in cost
                                    per episode, and other factors that the
                                    Secretary considers to be relevant.
                                        ``(V) Subject to clause (iii)(II),
                                    for a year after 2011, such a amount
                                    (or amounts) shall be equal to the
                                    amount (or amounts) determined under
                                    this clause for the previous year,
                                    updated under subparagraph (B).''; and
                (2) by adding at the end the following new clause:
                                ``(iii) Special rule in case of inability
                            to effect timely rebasing.--
                                        ``(I) Application of proxy amount
                                    for 2011.--If the Secretary is not able
                                    to compute the amount (or amounts)
                                    under clause (i)(IV) so as to permit,
                                    on a timely basis, the application of
                                    such clause for 2011, the Secretary
                                    shall substitute for such amount (or
                                    amounts) 95 percent of the amount (or
                                    amounts) that would otherwise be
                                    specified under clause (i)(III) if it
                                    applied for 2011.
                                        ``(II) Adjustment for subsequent
                                    years based on data.--If the Secretary
                                    applies subclause (I), the Secretary
                                    before July 1, 2011, shall compare the
                                    amount (or amounts) applied under such
                                    subclause with the amount (or amounts)
                                    that should have been applied under
                                    clause (i)(IV). The Secretary shall
                                    decrease or increase the prospective
                                    payment amount (or amounts) under
                                    clause (i)(V) for 2012 (or, at the
                                    Secretary's discretion, over a period
                                    of several years beginning with 2012)
                                    by the amount (if any) by which the
                                    amount (or amounts) applied under
                                    subclause (I) is greater or less,
                                    respectively, than the amount (or
                                    amounts) that should have been applied
                                    under clause (i)(IV).''.

    SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET
                  UPDATE FOR HOME HEALTH SERVICES.

        (a) In General.--Section 1895(b)(3)(B) of the Social Security Act
    (42 U.S.C. 1395fff(b)(3)(B)) is amended--
                (1) in clause (iii), by inserting ``(including being
            subject to the productivity adjustment described in section
            1886(b)(3)(B)(iii)(II))'' after ``in the same manner''; and
                (2) in clause (v)(I), by inserting ``(but not below 0)''
            after ``reduced''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to home health market basket percentage increases for years
    beginning with 2010.

    SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE PROHIBITION ON
                  CERTAIN PHYSICIAN REFERRALS MADE TO HOSPITALS.

        (a) In General.--Section 1877 of the Social Security Act (42 U.S.C.
    1395nn) is amended--
                (1) in subsection (d)(2)--
                        (A) in subparagraph (A), by striking ``and'' at the
                    end;
                        (B) in subparagraph (B), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(C) in the case where the entity is a hospital,
                    the hospital meets the requirements of paragraph
                    (3)(D).'';
                (2) in subsection (d)(3)--
                        (A) in subparagraph (B), by striking ``and'' at the
                    end;
                        (B) in subparagraph (C), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(D) the hospital meets the requirements described
                    in subsection (i)(1).'';
                (3) by amending subsection (f) to read as follows:
        ``(f) Reporting and Disclosure Requirements.--
                ``(1) In general.--Each entity providing covered items or
            services for which payment may be made under this title shall
            provide the Secretary with the information concerning the
            entity's ownership, investment, and compensation arrangements,
            including--
                        ``(A) the covered items and services provided by
                    the entity, and
                        ``(B) the names and unique physician identification
                    numbers of all physicians with an ownership or
                    investment interest (as described in subsection
                    (a)(2)(A)), or with a compensation arrangement (as
                    described in subsection (a)(2)(B)), in the entity, or
                    whose immediate relatives have such an ownership or
                    investment interest or who have such a compensation
                    relationship with the entity.
            Such information shall be provided in such form, manner, and at
            such times as the Secretary shall specify. The requirement of
            this subsection shall not apply to designated health services
            provided outside the United States or to entities which the
            Secretary determines provide services for which payment may be
            made under this title very infrequently.
                ``(2) Requirements for hospitals with physician ownership
            or investment.--In the case of a hospital that meets the
            requirements described in subsection (i)(1), the hospital
            shall--
                        ``(A) submit to the Secretary an initial report,
                    and periodic updates at a frequency determined by the
                    Secretary, containing a detailed description of the
                    identity of each physician owner and physician investor
                    and any other owners or investors of the hospital;
                        ``(B) require that any referring physician owner or
                    investor discloses to the individual being referred, by
                    a time that permits the individual to make a meaningful
                    decision regarding the receipt of services, as
                    determined by the Secretary, the ownership or
                    investment interest, as applicable, of such referring
                    physician in the hospital; and
                        ``(C) disclose the fact that the hospital is
                    partially or wholly owned by one or more physicians or
                    has one or more physician investors--
                                ``(i) on any public website for the
                            hospital; and
                                ``(ii) in any public advertising for the
                            hospital.
            The information to be reported or disclosed under this
            paragraph shall be provided in such form, manner, and at such
            times as the Secretary shall specify. The requirements of this
            paragraph shall not apply to designated health services
            furnished outside the United States or to entities which the
            Secretary determines provide services for which payment may be
            made under this title very infrequently.
                ``(3) Publication of information.--The Secretary shall
            publish, and periodically update, the information submitted by
            hospitals under paragraph (2)(A) on the public Internet website
            of the Centers for Medicare & Medicaid Services.'';
                (4) by amending subsection (g)(5) to read as follows:
                ``(5) Failure to report or disclose information.--
                        ``(A) Reporting.--Any person who is required, but
                    fails, to meet a reporting requirement of paragraphs
                    (1) and (2)(A) of subsection (f) is subject to a civil
                    money penalty of not more than $10,000 for each day for
                    which reporting is required to have been made.
                        ``(B) Disclosure.--Any physician who is required,
                    but fails, to meet a disclosure requirement of
                    subsection (f)(2)(B) or a hospital that is required,
                    but fails, to meet a disclosure requirement of
                    subsection (f)(2)(C) is subject to a civil money
                    penalty of not more than $10,000 for each case in which
                    disclosure is required to have been made.
                        ``(C) Application.--The provisions of section 1128A
                    (other than the first sentence of subsection (a) and
                    other than subsection (b)) shall apply to a civil money
                    penalty under subparagraphs (A) and (B) in the same
                    manner as such provisions apply to a penalty or
                    proceeding under section 1128A(a).''; and
                (5) by adding at the end the following new subsection:
        ``(i) Requirements To Qualify for Rural Provider and Hospital
    Ownership Exceptions to Self-referral Prohibition.--
                ``(1) Requirements described.--For purposes of subsection
            (d)(3)(D), the requirements described in this paragraph are as
            follows:
                        ``(A) Provider agreement.--The hospital had--
                                ``(i) physician ownership or investment on
                            January 1, 2009; and
                                ``(ii) a provider agreement under section
                            1866 in effect on such date.
                        ``(B) Prohibition on physician ownership or
                    investment.--The percentage of the total value of the
                    ownership or investment interests held in the hospital,
                    or in an entity whose assets include the hospital, by
                    physician owners or investors in the aggregate does not
                    exceed such percentage as of the date of enactment of
                    this subsection.
                        ``(C) Prohibition on expansion of facility
                    capacity.--Except as provided in paragraph (2), the
                    number of operating rooms, procedure rooms, or beds of
                    the hospital at any time on or after the date of the
                    enactment of this subsection are no greater than the
                    number of operating rooms, procedure rooms, or beds,
                    respectively, as of such date.
                        ``(D) Ensuring bona fide ownership and
                    investment.--
                                ``(i) Any ownership or investment interests
                            that the hospital offers to a physician are not
                            offered on more favorable terms than the terms
                            offered to a person who is not in a position to
                            refer patients or otherwise generate business
                            for the hospital.
                                ``(ii) The hospital (or any investors in
                            the hospital) does not directly or indirectly
                            provide loans or financing for any physician
                            owner or investor in the hospital.
                                ``(iii) The hospital (or any investors in
                            the hospital) does not directly or indirectly
                            guarantee a loan, make a payment toward a loan,
                            or otherwise subsidize a loan, for any
                            physician owner or investor or group of
                            physician owners or investors that is related
                            to acquiring any ownership or investment
                            interest in the hospital.
                                ``(iv) Ownership or investment returns are
                            distributed to each owner or investor in the
                            hospital in an amount that is directly
                            proportional to the ownership or investment
                            interest of such owner or investor in the
                            hospital.
                                ``(v) The investment interest of the owner
                            or investor is directly proportional to the
                            owner's or investor's capital contributions
                            made at the time the ownership or investment
                            interest is obtained.
                                ``(vi) Physician owners and investors do
                            not receive, directly or indirectly, any
                            guaranteed receipt of or right to purchase
                            other business interests related to the
                            hospital, including the purchase or lease of
                            any property under the control of other owners
                            or investors in the hospital or located near
                            the premises of the hospital.
                                ``(vii) The hospital does not offer a
                            physician owner or investor the opportunity to
                            purchase or lease any property under the
                            control of the hospital or any other owner or
                            investor in the hospital on more favorable
                            terms than the terms offered to a person that
                            is not a physician owner or investor.
                                ``(viii) The hospital does not condition
                            any physician ownership or investment interests
                            either directly or indirectly on the physician
                            owner or investor making or influencing
                            referrals to the hospital or otherwise
                            generating business for the hospital.
                        ``(E) Patient safety.--In the case of a hospital
                    that does not offer emergency services, the hospital
                    has the capacity to--
                                ``(i) provide assessment and initial
                            treatment for medical emergencies; and
                                ``(ii) if the hospital lacks additional
                            capabilities required to treat the emergency
                            involved, refer and transfer the patient with
                            the medical emergency to a hospital with the
                            required capability.
                        ``(F) Limitation on application to certain
                    converted facilities.--The hospital was not converted
                    from an ambulatory surgical center to a hospital on or
                    after the date of enactment of this subsection.
                ``(2) Exception to prohibition on expansion of facility
            capacity.--
                        ``(A) Process.--
                                ``(i) Establishment.--The Secretary shall
                            establish and implement a process under which a
                            hospital may apply for an exception from the
                            requirement under paragraph (1)(C).
                                ``(ii) Opportunity for community input.--
                            The process under clause (i) shall provide
                            persons and entities in the community in which
                            the hospital applying for an exception is
                            located with the opportunity to provide input
                            with respect to the application.
                                ``(iii) Timing for implementation.--The
                            Secretary shall implement the process under
                            clause (i) on the date that is one month after
                            the promulgation of regulations described in
                            clause (iv).
                                ``(iv) Regulations.--Not later than the
                            first day of the month beginning 18 months
                            after the date of the enactment of this
                            subsection, the Secretary shall promulgate
                            regulations to carry out the process under
                            clause (i). The Secretary may issue such
                            regulations as interim final regulations.
                        ``(B) Frequency.--The process described in
                    subparagraph (A) shall permit a hospital to apply for
                    an exception up to once every 2 years.
                        ``(C) Permitted increase.--
                                ``(i) In general.--Subject to clause (ii)
                            and subparagraph (D), a hospital granted an
                            exception under the process described in
                            subparagraph (A) may increase the number of
                            operating rooms, procedure rooms, or beds of
                            the hospital above the baseline number of
                            operating rooms, procedure rooms, or beds,
                            respectively, of the hospital (or, if the
                            hospital has been granted a previous exception
                            under this paragraph, above the number of
                            operating rooms, procedure rooms, or beds,
                            respectively, of the hospital after the
                            application of the most recent increase under
                            such an exception).
                                ``(ii) 100 percent increase limitation.--
                            The Secretary shall not permit an increase in
                            the number of operating rooms, procedure rooms,
                            or beds of a hospital under clause (i) to the
                            extent such increase would result in the number
                            of operating rooms, procedure rooms, or beds of
                            the hospital exceeding 200 percent of the
                            baseline number of operating rooms, procedure
                            rooms, or beds of the hospital.
                                ``(iii) Baseline number of operating rooms,
                            procedure rooms, or beds.--In this paragraph,
                            the term `baseline number of operating rooms,
                            procedure rooms, or beds' means the number of
                            operating rooms, procedure rooms, or beds of a
                            hospital as of the date of enactment of this
                            subsection.
                        ``(D) Increase limited to facilities on the main
                    campus of the hospital.--Any increase in the number of
                    operating rooms, procedure rooms, or beds of a hospital
                    pursuant to this paragraph may only occur in facilities
                    on the main campus of the hospital.
                        ``(E) Conditions for approval of an increase in
                    facility capacity.--The Secretary may grant an
                    exception under the process described in subparagraph
                    (A) only to a hospital--
                                ``(i) that is located in a county in which
                            the percentage increase in the population
                            during the most recent 5-year period for which
                            data are available is estimated to be at least
                            150 percent of the percentage increase in the
                            population growth of the State in which the
                            hospital is located during that period, as
                            estimated by Bureau of the Census and available
                            to the Secretary;
                                ``(ii) whose annual percent of total
                            inpatient admissions that represent inpatient
                            admissions under the program under title XIX is
                            estimated to be equal to or greater than the
                            average percent with respect to such admissions
                            for all hospitals located in the county in
                            which the hospital is located;
                                ``(iii) that does not discriminate against
                            beneficiaries of Federal health care programs
                            and does not permit physicians practicing at
                            the hospital to discriminate against such
                            beneficiaries;
                                ``(iv) that is located in a State in which
                            the average bed capacity in the State is
                            estimated to be less than the national average
                            bed capacity;
                                ``(v) that has an average bed occupancy
                            rate that is estimated to be greater than the
                            average bed occupancy rate in the State in
                            which the hospital is located; and
                                ``(vi) that meets other conditions as
                            determined by the Secretary.
                        ``(F) Procedure rooms.--In this subsection, the
                    term `procedure rooms' includes rooms in which
                    catheterizations, angiographies, angiograms, and
                    endoscopies are furnished, but such term shall not
                    include emergency rooms or departments (except for
                    rooms in which catheterizations, angiographies,
                    angiograms, and endoscopies are furnished).
                        ``(G) Publication of final decisions.--Not later
                    than 120 days after receiving a complete application
                    under this paragraph, the Secretary shall publish on
                    the public Internet website of the Centers for Medicare
                    & Medicaid Services the final decision with respect to
                    such application.
                        ``(H) Limitation on review.--There shall be no
                    administrative or judicial review under section 1869,
                    section 1878, or otherwise of the exception process
                    under this paragraph, including the establishment of
                    such process, and any determination made under such
                    process.
                ``(3) Physician owner or investor defined.--For purposes of
            this subsection and subsection (f)(2), the term `physician
            owner or investor' means a physician (or an immediate family
            member of such physician) with a direct or an indirect
            ownership or investment interest in the hospital.
                ``(4) Patient safety requirement.--In the case of a
            hospital to which the requirements of paragraph (1) apply,
            insofar as the hospital admits a patient and does not have any
            physician available on the premises 24 hours per day, 7 days
            per week, before admitting the patient--
                        ``(A) the hospital shall disclose such fact to the
                    patient; and
                        ``(B) following such disclosure, the hospital shall
                    receive from the patient a signed acknowledgment that
                    the patient understands such fact.
                ``(5) Clarification.--Nothing in this subsection shall be
            construed as preventing the Secretary from terminating a
            hospital's provider agreement if the hospital is not in
            compliance with regulations pursuant to section 1866.''.
        (b) Verifying Compliance.--The Secretary of Health and Human
    Services shall establish policies and procedures to verify compliance
    with the requirements described in subsections (i)(1) and (i)(4) of
    section 1877 of the Social Security Act, as added by subsection (a)(5).
    The Secretary may use unannounced site reviews of hospitals and audits
    to verify compliance with such requirements.
        (c) Implementation.--
                (1) Funding.--For purposes of carrying out the amendments
            made by subsection (a) and the provisions of subsection (b), in
            addition to funds otherwise available, out of any funds in the
            Treasury not otherwise appropriated there are appropriated to
            the Secretary of Health and Human Services for the Centers for
            Medicare & Medicaid Services Program Management Account
            $5,000,000 for each fiscal year beginning with fiscal year
            2010. Amounts appropriated under this paragraph for a fiscal
            year shall be available until expended.
                (2) Administration.--Chapter 35 of title 44, United States
            Code, shall not apply to the amendments made by subsection (a)
            and the provisions of subsection (b).

    SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC ADJUSTMENT FACTORS
                  UNDER MEDICARE.

        (a) In General.--The Secretary of Health and Human Services shall
    enter into a contract with the Institute of Medicine of the National
    Academy of Science to conduct a comprehensive empirical study, and
    provide recommendations as appropriate, on the accuracy of the
    geographic adjustment factors established under sections 1848(e) and
    1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395w-4(e),
    11395ww(d)(3)).
        (b) Matters Included.--Such study shall include an evaluation and
    assessment of the following with respect to such adjustment factors:
                (1) Empirical validity of the adjustment factors.
                (2) Methodology used to determine the adjustment factors.
                (3) Measures used for the adjustment factors, taking into
            account--
                        (A) timeliness of data and frequency of revisions
                    to such data;
                        (B) sources of data and the degree to which such
                    data are representative of costs; and
                        (C) operational costs of providers who participate
                    in Medicare.
        (c) Evaluation.--Such study shall, within the context of the United
    States health care marketplace, evaluate and consider the following:
                (1) The effect of the adjustment factors on the level and
            distribution of the health care workforce and resources,
            including--
                        (A) recruitment and retention that takes into
                    account workforce mobility between urban and rural
                    areas;
                        (B) ability of hospitals and other facilities to
                    maintain an adequate and skilled workforce; and
                        (C) patient access to providers and needed medical
                    technologies.
                (2) The effect of the adjustment factors on population
            health and quality of care.
                (3) The effect of the adjustment factors on the ability of
            providers to furnish efficient, high value care.
        (d) Report.--The contract under subsection (a) shall provide for
    the Institute of Medicine to submit, not later than one year after the
    date of the enactment of this Act, to the Secretary and the Congress a
    report containing results and recommendations of the study conducted
    under this section.
        (e) Funding.--There are authorized to be appropriated to carry out
    this section such sums as may be necessary.

    SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO ADDRESS GEOGRAPHIC
                  INEQUITIES.

        (a) In General.--The Secretary of Health and Human Services, taking
    into account the recommendations made in the report under section
    1157(d), shall include in the proposed rules published to implement
    changes to payment systems for physicians and hospitals under sections
    1848(e) and 1886(d)(3)(E), respectively, of the Social Security Act,
    proposals to revise geographic adjustment factors for such payment
    systems for services furnished under the Medicare program. Such
    proposed rules shall be published in the rulemaking period immediately
    following submission of the report under section 1157(d).
        (b) Payment Adjustments.--
                (1) Funding for improvements.--In making any changes to the
            geographic adjustment factors in accordance with subsection
            (a), the Secretary shall use funds made available for such
            purposes under subsection (c).
                (2) Ensuring fairness.--In carrying out this subsection,
            the Secretary shall not change payment rates to be less than
            they would have been had this section not been enacted.
        (c) Funding.--Amounts in the Medicare Improvement Fund under
    section 1898 of the Social Security Act (42 U.S.C. 1395iii), as amended
    by section 1146, shall be available to the Secretary to make changes to
    the geographic adjustments factors established under sections 1848(e)
    and 1886(d)(3)(E) of the Social Security Act. For such purpose, such
    funds shall be available for expenditure for services furnished before
    January 1, 2014, and shall not exceed the total amounts available under
    such Fund for such period. No more than one-half of such amounts shall
    be available for expenditure for services furnished in any one payment
    year.

                     Subtitle D--Medicare Advantage Reforms

                       PART 1--PAYMENT AND ADMINISTRATION

    SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-SERVICE COSTS.

        Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is
    amended--
                (1) in subsection (j)(1)(A)--
                        (A) by striking ``beginning with 2007'' and
                    inserting ``for 2007, 2008, 2009, and 2010''; and
                        (B) by inserting after ``(k)(1)'' the following:
                    ``, or, beginning with 2011, \1/12\ of the blended
                    benchmark amount determined under subsection (n)(1)'';
                    and
                (2) by adding at the end the following new subsection:
        ``(n) Determination of Blended Benchmark Amount.--
                ``(1) In general.--For purposes of subsection (j), subject
            to paragraphs (3) and (4), the term `blended benchmark amount'
            means for an area--
                        ``(A) for 2011 the sum of--
                                ``(i) \2/3\ of the applicable amount (as
                            defined in subsection (k)) for the area and
                            year; and
                                ``(ii) \1/3\ of the amount specified in
                            paragraph (2) for the area and year;
                        ``(B) for 2012 the sum of--
                                ``(i) \1/3\ of the applicable amount for
                            the area and year; and
                                ``(ii) \2/3\ of the amount specified in
                            paragraph (2) for the area and year; and
                        ``(C) for a subsequent year the amount specified in
                    paragraph (2) for the area and year.
                ``(2) Specified amount.--The amount specified in this
            paragraph for an area and year is the amount specified in
            subsection (c)(1)(D)(i) for the area and year adjusted (in a
            manner specified by the Secretary) to take into account the
            phase-out in the indirect costs of medical education from
            capitation rates described in subsection (k)(4).
                ``(3) Fee-for-service payment floor.--In no case shall the
            blended benchmark amount for an area and year be less than the
            amount specified in paragraph (2).
                ``(4) Exception for pace plans.--This subsection shall not
            apply to payments to a PACE program under section 1894.''.

    SEC. 1162. QUALITY BONUS PAYMENTS.

        (a) In General.--Section 1853 of the Social Security Act (42 U.S.C.
    1395w-23), as amended by section 1161, is amended--
                (1) in subsection (j), by inserting ``subject to subsection
            (o),'' after ``For purposes of this part''; and
                (2) by adding at the end the following new subsection:
        ``(o) Quality Based Payment Adjustment.--
                ``(1) High quality plan adjustment.--For years beginning
            with 2011, in the case of a Medicare Advantage plan that is
            identified (under paragraph (3)(E)(ii)) as a high quality MA
            plan with respect to the year, the blended benchmark amount
            under subsection (n)(1) shall be increased--
                        ``(A) for 2011, by 1.0 percent;
                        ``(B) for 2012, by 2.0 percent; and
                        ``(C) for a subsequent year, by 3.0 percent.
                ``(2) Improved quality plan adjustment.--For years
            beginning with 2011, in the case of a Medicare Advantage plan
            that is identified (under paragraph (3)(E)(iii)) as an improved
            quality MA plan with respect to the year, blended benchmark
            amount under subsection (n)(1) shall be increased--
                        ``(A) for 2011, by 0.33 percent;
                        ``(B) for 2012, by 0.66 percent; and
                        ``(C) for a subsequent year, by 1.0 percent.
                ``(3) Determinations of quality.--
                        ``(A) Quality performance.--The Secretary shall
                    provide for the computation of a quality performance
                    score for each Medicare Advantage plan to be applied
                    for each year beginning with 2010.
                        ``(B) Computation of score.--
                                ``(i) For years before 2014.--For years
                            before 2014, the quality performance score for
                            a Medicare Advantage plan shall be computed
                            based on a blend (as designated by the
                            Secretary) of the plan's performance on--
                                        ``(I) HEDIS effectiveness of care
                                    quality measures;
                                        ``(II) CAHPS quality measures; and
                                        ``(III) such other measures of
                                    clinical quality as the Secretary may
                                    specify.
                            Such measures shall be risk-adjusted as the
                            Secretary deems appropriate.
                                ``(ii) Establishment of outcome-based
                            measures.--By not later than for 2013 the
                            Secretary shall implement reporting
                            requirements for quality under this section on
                            measures selected under clause (iii) that
                            reflect the outcomes of care experienced by
                            individuals enrolled in Medicare Advantage
                            plans (in addition to measures described in
                            clause (i)). Such measures may include--
                                        ``(I) measures of rates of
                                    admission and readmission to a
                                    hospital;
                                        ``(II) measures of prevention
                                    quality, such as those established by
                                    the Agency for Healthcare Research and
                                    Quality (that include hospital
                                    admission rates for specified
                                    conditions);
                                        ``(III) measures of patient
                                    mortality and morbidity following
                                    surgery;
                                        ``(IV) measures of health
                                    functioning (such as limitations on
                                    activities of daily living) and
                                    survival for patients with chronic
                                    diseases;
                                        ``(V) measures of patient safety;
                                    and
                                        ``(VI) other measure of outcomes
                                    and patient quality of life as
                                    determined by the Secretary.
                            Such measures shall be risk-adjusted as the
                            Secretary deems appropriate. In determining the
                            quality measures to be used under this clause,
                            the Secretary shall take into consideration the
                            recommendations of the Medicare Payment
                            Advisory Commission in its report to Congress
                            under section 168 of the Medicare Improvements
                            for Patients and Providers Act of 2008 (Public
                            Law 110-275) and shall provide preference to
                            measures collected on and comparable to
                            measures used in measuring quality under parts
                            A and B.
                                ``(iii) Rules for selection of measures.--
                            The Secretary shall select measures for
                            purposes of clause (ii) consistent with the
                            following:
                                        ``(I) The Secretary shall provide
                                    preference to clinical quality measures
                                    that have been endorsed by the entity
                                    with a contract with the Secretary
                                    under section 1890(a).
                                        ``(II) Prior to any measure being
                                    selected under this clause, the
                                    Secretary shall publish in the Federal
                                    Register such measure and provide for a
                                    period of public comment on such
                                    measure.
                                ``(iv) Transitional use of blend.--For
                            payments for 2014 and 2015, the Secretary may
                            compute the quality performance score for a
                            Medicare Advantage plan based on a blend of the
                            measures specified in clause (i) and the
                            measures described in clause (ii) and selected
                            under clause (iii).
                                ``(v) Use of quality outcomes measures.--
                            For payments beginning with 2016, the
                            preponderance of measures used under this
                            paragraph shall be quality outcomes measures
                            described in clause (ii) and selected under
                            clause (iii).
                        ``(C) Data used in computing score.--Such score for
                    application for--
                                ``(i) payments in 2011 shall be based on
                            quality performance data for plans for 2009;
                            and
                                ``(ii) payments in 2012 and a subsequent
                            year shall be based on quality performance data
                            for plans for the second preceding year.
                        ``(D) Reporting of data.--Each Medicare Advantage
                    organization shall provide for the reporting to the
                    Secretary of quality performance data described in
                    subparagraph (B) (in order to determine a quality
                    performance score under this paragraph) in such time
                    and manner as the Secretary shall specify.
                        ``(E) Ranking of plans.--
                                ``(i) Initial ranking.--Based on the
                            quality performance score described in
                            subparagraph (B) achieved with respect to a
                            year, the Secretary shall rank plan
                            performance--
                                        ``(I) from highest to lowest based
                                    on absolute scores; and
                                        ``(II) from highest to lowest based
                                    on percentage improvement in the score
                                    for the plan from the previous year.
                            A plan which does not report quality
                            performance data under subparagraph (D) shall
                            be counted, for purposes of such ranking, as
                            having the lowest plan performance and lowest
                            percentage improvement.
                                ``(ii) Identification of high quality plans
                            in top quintile based on projected
                            enrollment.--The Secretary shall, based on the
                            scores for each plan under clause (i)(I) and
                            the Secretary's projected enrollment for each
                            plan and subject to clause (iv), identify those
                            Medicare Advantage plans with the highest score
                            that, based upon projected enrollment, are
                            projected to include in the aggregate 20
                            percent of the total projected enrollment for
                            the year. For purposes of this subsection, a
                            plan so identified shall be referred to in this
                            subsection as a `high quality MA plan'.
                                ``(iii) Identification of improved quality
                            plans in top quintile based on projected
                            enrollment.--The Secretary shall, based on the
                            percentage improvement score for each plan
                            under clause (i)(II) and the Secretary's
                            projected enrollment for each plan and subject
                            to clause (iv), identify those Medicare
                            Advantage plans with the greatest percentage
                            improvement score that, based upon projected
                            enrollment, are projected to include in the
                            aggregate 20 percent of the total projected
                            enrollment for the year. For purposes of this
                            subsection, a plan so identified that is not a
                            high quality plan for the year shall be
                            referred to in this subsection as an `improved
                            quality MA plan'.
                                ``(iv) Authority to disqualify certain
                            plans.--In applying clauses (ii) and (iii), the
                            Secretary may determine not to identify a
                            Medicare Advantage plan if the Secretary has
                            identified deficiencies in the plan's
                            compliance with rules for such plans under this
                            part.
                        ``(F) Notification.--The Secretary, in the annual
                    announcement required under subsection (b)(1)(B) in
                    2011 and each succeeding year, shall notify the
                    Medicare Advantage organization that is offering a high
                    quality plan or an improved quality plan of such
                    identification for the year and the quality performance
                    payment adjustment for such plan for the year. The
                    Secretary shall provide for publication on the website
                    for the Medicare program of the information described
                    in the previous sentence.''.

    SEC. 1163. EXTENSION OF SECRETARIAL CODING INTENSITY ADJUSTMENT
                  AUTHORITY.

        Section 1853(a)(1)(C)(ii) of the Social Security Act (42 U.S.C.
    1395w-23(a)(1)(C)(ii)) is amended--
                (1) in the matter before subclause (I), by striking
            ``through 2010'' and inserting ``and each subsequent year'';
            and
                (2) in subclause (II)--
                        (A) by inserting ``periodically'' before ``conduct
                    an analysis'';
                        (B) by inserting ``on a timely basis'' after ``are
                    incorporated''; and
                        (C) by striking ``only for 2008, 2009, and 2010''
                    and inserting ``for 2008 and subsequent years''.

    SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

        (a) 2 Week Processing Period for Annual Enrollment Period (AEP).--
    Paragraph (3)(B) of section 1851(e) of the Social Security Act (42
    U.S.C. 1395w-21(e)) is amended--
                (1) by striking ``and'' at the end of clause (iii);
                (2) in clause (iv)--
                        (A) by striking ``and succeeding years'' and
                    inserting ``, 2008, 2009, and 2010''; and
                        (B) by striking the period at the end and inserting
                    ``; and''; and
                (3) by adding at the end the following new clause:
                                ``(v) with respect to 2011 and succeeding
                            years, the period beginning on November 1 and
                            ending on December 15 of the year before such
                            year.''.
        (b) Elimination of 3-month Additional Open Enrollment Period
    (OEP).--Effective for plan years beginning with 2011, paragraph (2) of
    such section is amended by striking subparagraph (C).

    SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.

        Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C.
    1395mm(h)(5)(C)) is amended--
                (1) in clause (ii), by striking ``January 1, 2010'' and
            inserting ``January 1, 2012''; and
                (2) in clause (iii), by striking ``the service area for the
            year'' and inserting ``the portion of the plan's service area
            for the year that is within the service area of a reasonable
            cost reimbursement contract''.

    SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYER GROUP PLANS.

        (a) In General.--The first sentence of paragraph (2) of section
    1857(i) of the Social Security Act (42 U.S.C. 1395w-27(i)) is amended
    by inserting before the period at the end the following: ``, but only
    if 90 percent of the Medicare Advantage eligible individuals enrolled
    under such plan reside in a county in which the MA organization offers
    an MA local plan''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply for plan years beginning on or after January 1, 2011, and shall
    not apply to plans which were in effect as of December 31, 2010.

    SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

        (a) Report to Congress.--Not later than 1 year after the date of
    the enactment of this Act, the Secretary of Health and Human Services
    shall submit to Congress a report that evaluates the adequacy of the
    risk adjustment system under section 1853(a)(1)(C) of the Social
    Security Act (42 U.S.C. 1395-23(a)(1)(C)) in predicting costs for
    beneficiaries with chronic or co-morbid conditions, beneficiaries
    dually-eligible for Medicare and Medicaid, and non-Medicaid eligible
    low-income beneficiaries; and the need and feasibility of including
    further gradations of diseases or conditions and multiple years of
    beneficiary data.
        (b) Improvements to Risk Adjustment.--Not later than January 1,
    2012, the Secretary shall implement necessary improvements to the risk
    adjustment system under section 1853(a)(1)(C) of the Social Security
    Act (42 U.S.C. 1395-23(a)(1)(C)), taking into account the evaluation
    under subsection (a).

    SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND.

        (a) In General.--Section 1858 of the Social Security Act (42 U.S.C.
    1395w-27a) is amended by striking subsection (e).
        (b) Transition.--Any amount contained in the MA Regional Plan
    Stabilization Fund as of the date of the enactment of this Act shall be
    transferred to the Federal Supplementary Medical Insurance Trust Fund.

                 PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD

    SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES.

        (a) In General.--Section 1852(a)(1) of the Social Security Act (42
    U.S.C. 1395w-22(a)(1)) is amended--
                (1) in subparagraph (A), by inserting before the period at
            the end the following: ``with cost-sharing that is no greater
            (and may be less) than the cost-sharing that would otherwise be
            imposed under such program option'';
                (2) in subparagraph (B)(i), by striking ``or an actuarially
            equivalent level of cost-sharing as determined in this part'';
            and
                (3) by amending clause (ii) of subparagraph (B) to read as
            follows:
                                ``(ii) Permitting use of flat copayment or
                            per diem rate.--Nothing in clause (i) shall be
                            construed as prohibiting a Medicare Advantage
                            plan from using a flat copayment or per diem
                            rate, in lieu of the cost-sharing that would be
                            imposed under part A or B, so long as the
                            amount of the cost-sharing imposed does not
                            exceed the amount of the cost-sharing that
                            would be imposed under the respective part if
                            the individual were not enrolled in a plan
                            under this part.''.
        (b) Limitation for Dual Eligibles and Qualified Medicare
    Beneficiaries.--Section 1852(a) of such Act is amended by adding at the
    end the following new paragraph:
                ``(7) Limitation on cost-sharing for dual eligibles and
            qualified medicare beneficiaries.--In the case of a individual
            who is a full-benefit dual eligible individual (as defined in
            section 1935(c)(6)) or a qualified medicare beneficiary (as
            defined in section 1905(p)(1)) who is enrolled in a Medicare
            Advantage plan, the plan may not impose cost-sharing that
            exceeds the amount of cost-sharing that would be permitted with
            respect to the individual under this title and title XIX if the
            individual were not enrolled with such plan.''.
        (c) Effective Dates.--
                (1) The amendments made by subsection (a) shall apply to
            plan years beginning on or after January 1, 2011.
                (2) The amendments made by subsection (b) shall apply to
            plan years beginning on or after January 1, 2011.

    SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH
                  ENROLLMENT SUSPENSION.

        Section 1851(e)(4) of the Social Security Act (42 U.S.C.
    1395w(e)(4)) is amended--
                (1) in subparagraph (C), by striking at the end ``or'';
                (2) in subparagraph (D)--
                        (A) by inserting ``, taking into account the health
                    or well-being of the individual'' before the period;
                    and
                        (B) by redesignating such subparagraph as
                    subparagraph (E); and
                (3) by inserting after subparagraph (C) the following new
            subparagraph:
                        ``(D) the individual is enrolled in an MA plan and
                    enrollment in the plan is suspended under paragraph
                    (2)(B) or (3)(C) of section 1857(g) because of a
                    failure of the plan to meet applicable requirements;
                    or''.

    SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE
                  COSTS.

        (a) Disclosure of Medical Loss Ratios and Other Expense Data.--
    Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as
    previously amended by this subtitle, is amended by adding at the end
    the following new subsection:
        ``(p) Publication of Medical Loss Ratios and Other Cost-related
    Information.--
                ``(1) In general.--The Secretary shall publish, not later
            than November 1 of each year (beginning with 2011), for each MA
            plan contract, the medical loss ratio of the plan in the
            previous year.
                ``(2) Submission of data.--
                        ``(A) In general.--Each MA organization shall
                    submit to the Secretary, in a form and manner specified
                    by the Secretary, data necessary for the Secretary to
                    publish the medical loss ratio on a timely basis.
                        ``(B) Data for 2010 and 2011.--The data submitted
                    under subparagraph (A) for 2010 and for 2011 shall be
                    consistent in content with the data reported as part of
                    the MA plan bid in June 2009 for 2010.
                        ``(C) Use of standardized elements and
                    definitions.--The data to be submitted under
                    subparagraph (A) relating to medical loss ratio for a
                    year, beginning with 2012, shall be submitted based on
                    the standardized elements and definitions developed
                    under paragraph (3).
                ``(3) Development of data reporting standards.--
                        ``(A) In general.--The Secretary shall develop and
                    implement standardized data elements and definitions
                    for reporting under this subsection, for contract years
                    beginning with 2012, of data necessary for the
                    calculation of the medical loss ratio for MA plans. Not
                    later than December 31, 2010, the Secretary shall
                    publish a report describing the elements and
                    definitions so developed.
                        ``(B) Consultation.--The Secretary shall consult
                    with the Health Choices Commissioner, representatives
                    of MA organizations, experts on health plan accounting
                    systems, and representatives of the National
                    Association of Insurance Commissioners, in the
                    development of such data elements and definitions.
                ``(4) Medical loss ratio to be defined.--For purposes of
            this part, the term `medical loss ratio' has the meaning given
            such term by the Secretary, taking into account the meaning
            given such term by the Health Choices Commissioner under
            section 116 of the America's Affordable Health Choices Act of
            2009.''.
        (b) Minimum Medical Loss Ratio.--Section 1857(e) of the Social
    Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end
    the following new paragraph:
                ``(4) Requirement for minimum medical loss ratio.--If the
            Secretary determines for a contract year (beginning with 2014)
            that an MA plan has failed to have a medical loss ratio (as
            defined in section 1851(p)(4)) of at least .85--
                        ``(A) the Secretary shall require the Medicare
                    Advantage organization offering the plan to give
                    enrollees a rebate (in the second succeeding contract
                    year) of premiums under this part (or part B or part D,
                    if applicable) by such amount as would provide for a
                    benefits ratio of at least .85;
                        ``(B) for 3 consecutive contract years, the
                    Secretary shall not permit the enrollment of new
                    enrollees under the plan for coverage during the second
                    succeeding contract year; and
                        ``(C) the Secretary shall terminate the plan
                    contract if the plan fails to have such a medical loss
                    ratio for 5 consecutive contract years.''.

    SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

        (a) For Part C Payments Risk Adjustment.--Section 1857(d)(1) of the
    Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by inserting
    after ``section 1858(c))'' the following: ``, and data submitted with
    respect to risk adjustment under section 1853(a)(3)''.
        (b) Enforcement of Audits and Deficiencies.--
                (1) In general.--Section 1857(e) of such Act, as amended by
            section 1173, is amended by adding at the end the following new
            paragraph:
                ``(5) Enforcement of audits and deficiencies.--
                        ``(A) Information in contract.--The Secretary shall
                    require that each contract with an MA organization
                    under this section shall include terms that inform the
                    organization of the provisions in subsection (d).
                        ``(B) Enforcement authority.--The Secretary is
                    authorized, in connection with conducting audits and
                    other activities under subsection (d), to take such
                    actions, including pursuit of financial recoveries,
                    necessary to address deficiencies identified in such
                    audits or other activities.''.
                (2) Application under part d.--For provision applying the
            amendment made by paragraph (1) to prescription drug plans
            under part D, see section 1860D-12(b)(3)(D) of the Social
            Security Act.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act and shall apply to
    audits and activities conducted for contract years beginning on or
    after January 1, 2011.

    SEC. 1175. AUTHORITY TO DENY PLAN BIDS.

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

                    PART 3--TREATMENT OF SPECIAL NEEDS PLANS

    SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN ENROLLMENT PERIOD OF
                  INDIVIDUALS INTO CHRONIC CARE SPECIALIZED MA PLANS FOR
                  SPECIAL NEEDS INDIVIDUALS.

        Section 1859(f)(4) of the Social Security Act (42 U.S.C. 1395w-
    28(f)(4)) is amended by adding at the end the following new
    subparagraph:
                        ``(C) The plan does not enroll an individual on or
                    after January 1, 2011, other than during an annual,
                    coordinated open enrollment period or when at the time
                    of the diagnosis of the disease or condition that
                    qualifies the individual as an individual described in
                    subsection (b)(6)(B)(iii).''.

    SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT
                  ENROLLMENT.

        (a) In General.--Section 1859(f)(1) of the Social Security Act (42
    U.S.C. 1395w-28(f)(1)) is amended by striking ``January 1, 2011'' and
    inserting ``January 1, 2013 (or January 1, 2016, in the case of a plan
    described in section 1177(b)(1) of the America's Affordable Health
    Choices Act of 2009)''.
        (b) Grandfathering of Certain Plans.--
                (1) Plans described.--For purposes of section 1859(f)(1) of
            the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan
            described in this paragraph is a plan that had a contract with
            a State that had a State program to operate an integrated
            Medicaid-Medicare program that had been approved by the Centers
            for Medicare & Medicaid Services as of January 1, 2004.
                (2) Analysis; report.--The Secretary of Health and Human
            Services shall provide, through a contract with an independent
            health services evaluation organization, for an analysis of the
            plans described in paragraph (1) with regard to the impact of
            such plans on cost, quality of care, patient satisfaction, and
            other subjects as specified by the Secretary. Not later than
            December 31, 2011, the Secretary shall submit to Congress a
            report on such analysis and shall include in such report such
            recommendations with regard to the treatment of such plans as
            the Secretary deems appropriate.

                  Subtitle E--Improvements to Medicare Part D

    SEC. 1181. ELIMINATION OF COVERAGE GAP.

        (a) In General.--Section 1860D-2(b) of such Act (42 U.S.C. 1395w-
    102(b)) is amended--
                (1) in paragraph (3)(A), by striking ``paragraph (4)'' and
            inserting ``paragraphs (4) and (7)'';
                (2) in paragraph (4)(B)(i), by inserting ``subject to
            paragraph (7)'' after ``purposes of this part''; and
                (3) by adding at the end the following new paragraph:
                ``(7) Phased-in elimination of coverage gap.--
                        ``(A) In general.--For each year beginning with
                    2011, the Secretary shall consistent with this
                    paragraph progressively increase the initial coverage
                    limit (described in subsection (b)(3)) and decrease the
                    annual out-of-pocket threshold from the amounts
                    otherwise computed until there is a continuation of
                    coverage from the initial coverage limit for
                    expenditures incurred through the total amount of
                    expenditures at which benefits are available under
                    paragraph (4).
                        ``(B) Increase in initial coverage limit.--For a
                    year beginning with 2011, the initial coverage limit
                    otherwise computed without regard to this paragraph
                    shall be increased by \1/2\ of the cumulative phase-in
                    percentage (as defined in subparagraph (D)(ii) for the
                    year) times the out-of-pocket gap amount (as defined in
                    subparagraph (E)) for the year.
                        ``(C) Decrease in annual out-of-pocket threshold.--
                    For a year beginning with 2011, the annual out-of-
                    pocket threshold otherwise computed without regard to
                    this paragraph shall be decreased by \1/2\ of the
                    cumulative phase-in percentage of the out-of-pocket gap
                    amount for the year multiplied by 1.75.
                        ``(D) Phase-in.--For purposes of this paragraph:
                                ``(i) Annual phase-in percentage.--The term
                            `annual phase-in percentage' means--
                                        ``(I) for 2011, 13 percent;
                                        ``(II) for 2012, 2013, 2014, and
                                    2015, 5 percent;
                                        ``(III) for 2016 through 2018, 7.5
                                    percent; and
                                        ``(IV) for 2019 and each subsequent
                                    year, 10 percent.
                                ``(ii) Cumulative phase-in percentage.--The
                            term `cumulative phase-in percentage' means for
                            a year the sum of the annual phase-in
                            percentage for the year and the annual phase-in
                            percentages for each previous year beginning
                            with 2011, but in no case more than 100
                            percent.
                        ``(E) Out-of-pocket gap amount.--For purposes of
                    this paragraph, the term `out-of-pocket gap amount'
                    means for a year the amount by which--
                                ``(i) the annual out-of-pocket threshold
                            specified in paragraph (4)(B) for the year (as
                            determined as if this paragraph did not apply),
                            exceeds
                                ``(ii) the sum of--
                                        ``(I) the annual deductible under
                                    paragraph (1) for the year; and
                                        ``(II) \1/4\ of the amount by which
                                    the initial coverage limit under
                                    paragraph (3) for the year (as
                                    determined as if this paragraph did not
                                    apply) exceeds such annual
                                    deductible.''.
        (b) Requiring Drug Manufacturers To Provide Drug Rebates for Full-
    Benefit Dual Eligibles.--
                (1) In general.--Section 1860D-2 of the Social Security Act
            (42 U.S.C. 1396r-8) is amended--
                        (A) in subsection (e)(1), in the matter before
                    subparagraph (A), by inserting ``and subsection (f)''
                    after ``this subsection''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(f) Prescription Drug Rebate Agreement for Full-Benefit Dual
    Eligible Individuals.--
                ``(1) In general.--In this part, the term `covered part D
            drug' does not include any drug or biologic that is
            manufactured by a manufacturer that has not entered into and
            have in effect a rebate agreement described in paragraph (2).
                ``(2) Rebate agreement.--A rebate agreement under this
            subsection shall require the manufacturer to provide to the
            Secretary a rebate for each rebate period (as defined in
            paragraph (6)(B)) ending after December 31, 2010, in the amount
            specified in paragraph (3) for any covered part D drug of the
            manufacturer dispensed after December 31, 2010, to any full-
            benefit dual eligible individual (as defined in paragraph
            (6)(A)) for which payment was made by a PDP sponsor under part
            D or a MA organization under part C for such period. Such
            rebate shall be paid by the manufacturer to the Secretary not
            later than 30 days after the date of receipt of the information
            described in section 1860D-12(b)(7), including as such section
            is applied under section 1857(f)(3).
                ``(3) Rebate for full-benefit dual eligible medicare drug
            plan enrollees.--
                        ``(A) In general.--The amount of the rebate
                    specified under this paragraph for a manufacturer for a
                    rebate period, with respect to each dosage form and
                    strength of any covered part D drug provided by such
                    manufacturer and dispensed to a full-benefit dual
                    eligible individual, shall be equal to the product of--
                                ``(i) the total number of units of such
                            dosage form and strength of the drug so
                            provided and dispensed for which payment was
                            made by a PDP sponsor under part D or a MA
                            organization under part C for the rebate period
                            (as reported under section 1860D-12(b)(7),
                            including as such section is applied under
                            section 1857(f)(3)); and
                                ``(ii) the amount (if any) by which--
                                        ``(I) the Medicaid rebate amount
                                    (as defined in subparagraph (B)) for
                                    such form, strength, and period,
                                    exceeds
                                        ``(II) the average Medicare drug
                                    program full-benefit dual eligible
                                    rebate amount (as defined in
                                    subparagraph (C)) for such form,
                                    strength, and period.
                        ``(B) Medicaid rebate amount.--For purposes of this
                    paragraph, the term `Medicaid rebate amount' means,
                    with respect to each dosage form and strength of a
                    covered part D drug provided by the manufacturer for a
                    rebate period--
                                ``(i) in the case of a single source drug
                            or an innovator multiple source drug, the
                            amount specified in paragraph (1)(A)(ii) of
                            section 1927(b) plus the amount, if any,
                            specified in paragraph (2)(A)(ii) of such
                            section, for such form, strength, and period;
                            or
                                ``(ii) in the case of any other covered
                            outpatient drug, the amount specified in
                            paragraph (3)(A)(i) of such section for such
                            form, strength, and period.
                        ``(C) Average medicare drug program full-benefit
                    dual eligible rebate amount.--For purposes of this
                    subsection, the term `average Medicare drug program
                    full-benefit dual eligible rebate amount' means, with
                    respect to each dosage form and strength of a covered
                    part D drug provided by a manufacturer for a rebate
                    period, the sum, for all PDP sponsors under part D and
                    MA organizations administering a MA-PD plan under part
                    C, of--
                                ``(i) the product, for each such sponsor or
                            organization, of--
                                        ``(I) the sum of all rebates,
                                    discounts, or other price concessions
                                    (not taking into account any rebate
                                    provided under paragraph (2) for such
                                    dosage form and strength of the drug
                                    dispensed, calculated on a per-unit
                                    basis, but only to the extent that any
                                    such rebate, discount, or other price
                                    concession applies equally to drugs
                                    dispensed to full-benefit dual eligible
                                    Medicare drug plan enrollees and drugs
                                    dispensed to PDP and MA-PD enrollees
                                    who are not full-benefit dual eligible
                                    individuals; and
                                        ``(II) the number of the units of
                                    such dosage and strength of the drug
                                    dispensed during the rebate period to
                                    full-benefit dual eligible individuals
                                    enrolled in the prescription drug plans
                                    administered by the PDP sponsor or the
                                    MA-PD plans administered by the MA-PD
                                    organization; divided by
                                ``(ii) the total number of units of such
                            dosage and strength of the drug dispensed
                            during the rebate period to full-benefit dual
                            eligible individuals enrolled in all
                            prescription drug plans administered by PDP
                            sponsors and all MA-PD plans administered by
                            MA-PD organizations.
                ``(4) Length of agreement.--The provisions of paragraph (4)
            of section 1927(b) (other than clauses (iv) and (v) of
            subparagraph (B)) shall apply to rebate agreements under this
            subsection in the same manner as such paragraph applies to a
            rebate agreement under such section.
                ``(5) Other terms and conditions.--The Secretary shall
            establish other terms and conditions of the rebate agreement
            under this subsection, including terms and conditions related
            to compliance, that are consistent with this subsection.
                ``(6) Definitions.--In this subsection and section 1860D-
            12(b)(7):
                        ``(A) Full-benefit dual eligible individual.--The
                    term `full-benefit dual eligible individual' has the
                    meaning given such term in section 1935(c)(6).
                        ``(B) Rebate period.--The term `rebate period' has
                    the meaning given such term in section 1927(k)(8).''.
                (2) Reporting requirement for the determination and payment
            of rebates by manufactures related to rebate for full-benefit
            dual eligible medicare drug plan enrollees.--
                        (A) Requirements for pdp sponsors.--Section 1860D-
                    12(b) of the Social Security Act (42 U.S.C. 1395w-
                    112(b)) is amended by adding at the end the following
                    new paragraph:
                ``(7) Reporting requirement for the determination and
            payment of rebates by manufacturers related to rebate for full-
            benefit dual eligible medicare drug plan enrollees.--
                        ``(A) In general.--For purposes of the rebate under
                    section 1860D-2(f) for contract years beginning on or
                    after January 1, 2011, each contract entered into with
                    a PDP sponsor under this part with respect to a
                    prescription drug plan shall require that the sponsor
                    comply with subparagraphs (B) and (C).
                        ``(B) Report form and contents.--Not later than 60
                    days after the end of each rebate period (as defined in
                    section 1860D-2(f)(6)(B)) within such a contract year
                    to which such section applies, a PDP sponsor of a
                    prescription drug plan under this part shall report to
                    each manufacturer--
                                ``(i) information (by National Drug Code
                            number) on the total number of units of each
                            dosage, form, and strength of each drug of such
                            manufacturer dispensed to full-benefit dual
                            eligible Medicare drug plan enrollees under any
                            prescription drug plan operated by the PDP
                            sponsor during the rebate period;
                                ``(ii) information on the price discounts,
                            price concessions, and rebates for such drugs
                            for such form, strength, and period;
                                ``(iii) information on the extent to which
                            such price discounts, price concessions, and
                            rebates apply equally to full-benefit dual
                            eligible Medicare drug plan enrollees and PDP
                            enrollees who are not full-benefit dual
                            eligible Medicare drug plan enrollees; and
                                ``(iv) any additional information that the
                            Secretary determines is necessary to enable the
                            Secretary to calculate the average Medicare
                            drug program full-benefit dual eligible rebate
                            amount (as defined in paragraph (3)(C) of such
                            section), and to determine the amount of the
                            rebate required under this section, for such
                            form, strength, and period.
                    Such report shall be in a form consistent with a
                    standard reporting format established by the Secretary.
                        ``(C) Submission to secretary.--Each PDP sponsor
                    shall promptly transmit a copy of the information
                    reported under subparagraph (B) to the Secretary for
                    the purpose of audit oversight and evaluation.
                        ``(D) Confidentiality of information.--The
                    provisions of subparagraph (D) of section 1927(b)(3),
                    relating to confidentiality of information, shall apply
                    to information reported by PDP sponsors under this
                    paragraph in the same manner that such provisions apply
                    to information disclosed by manufacturers or
                    wholesalers under such section, except--
                                ``(i) that any reference to `this section'
                            in clause (i) of such subparagraph shall be
                            treated as being a reference to this section;
                                ``(ii) the reference to the Director of the
                            Congressional Budget Office in clause (iii) of
                            such subparagraph shall be treated as including
                            a reference to the Medicare Payment Advisory
                            Commission; and
                                ``(iii) clause (iv) of such subparagraph
                            shall not apply.
                        ``(E) Oversight.--Information reported under this
                    paragraph may be used by the Inspector General of the
                    Department of Health and Human Services for the
                    statutorily authorized purposes of audit,
                    investigation, and evaluations.
                        ``(F) Penalties for failure to provide timely
                    information and provision of false information.--In the
                    case of a PDP sponsor--
                                ``(i) that fails to provide information
                            required under subparagraph (B) on a timely
                            basis, the sponsor is subject to a civil money
                            penalty in the amount of $10,000 for each day
                            in which such information has not been
                            provided; or
                                ``(ii) that knowingly (as defined in
                            section 1128A(i)) provides false information
                            under such subparagraph, the sponsor is subject
                            to a civil money penalty in an amount not to
                            exceed $100,000 for each item of false
                            information.
                    Such civil money penalties are in addition to other
                    penalties as may be prescribed by law. The provisions
                    of section 1128A (other than subsections (a) and (b))
                    shall apply to a civil money penalty under this
                    subparagraph in the same manner as such provisions
                    apply to a penalty or proceeding under section
                    1128A(a).''.
                        (B) Application to ma organizations.--Section
                    1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-
                    27(f)(3)) is amended by adding at the end the
                    following:
                        ``(D) Reporting requirement related to rebate for
                    full-benefit dual eligible medicare drug plan
                    enrollees.--Section 1860D-12(b)(7).''.
                (3) Deposit of rebates into medicare prescription drug
            account.--Section 1860D-16(c) of such Act (42 U.S.C. 1395w-
            116(c)) is amended by adding at the end the following new
            paragraph:
                ``(6) Rebate for full-benefit dual eligible medicare drug
            plan enrollees.--Amounts paid under a rebate agreement under
            section 1860D-2(f) shall be deposited into the Account and
            shall be used to pay for all or part of the gradual elimination
            of the coverage gap under section 1860D-2(b)(7).''.

    SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN ORIGINAL COVERAGE GAP.

        Section 1860D-2 of the Social Security Act (42 U.S.C. 1395w-102),
    as amended by section 1181(a), is amended--
                (1) in subsection (b)(4)(C)(ii), by inserting ``subject to
            subsection (g)(2)(C),'' after ``(ii)'';
                (2) in subsection (e)(1), in the matter before subparagraph
            (A), by striking ``subsection (f)'' and inserting ``subsections
            (f) and (g)'' after ``this subsection''; and
                (3) by adding at the end the following new subsection:
        ``(g) Requirement for Manufacturer Discount Agreement for Certain
    Qualifying Drugs.--
                ``(1) In general.--In this part, the term `covered part D
            drug' does not include any drug or biologic that is
            manufactured by a manufacturer that has not entered into and
            have in effect for all qualifying drugs (as defined in
            paragraph (5)(A)) a discount agreement described in paragraph
            (2).
                ``(2) Discount agreement.--
                        ``(A) Periodic discounts.--A discount agreement
                    under this paragraph shall require the manufacturer
                    involved to provide, to each PDP sponsor with respect
                    to a prescription drug plan or each MA organization
                    with respect to each MA-PD plan, a discount in an
                    amount specified in paragraph (3) for qualifying drugs
                    (as defined in paragraph (5)(A)) of the manufacturer
                    dispensed to a qualifying enrollee after December 31,
                    2010, insofar as the individual is in the original gap
                    in coverage (as defined in paragraph (5)(E)).
                        ``(B) Discount agreement.--Insofar as not
                    inconsistent with this subsection, the Secretary shall
                    establish terms and conditions of such agreement,
                    including terms and conditions relating to compliance,
                    similar to the terms and conditions for rebate
                    agreements under paragraphs (2), (3), and (4) of
                    section 1927(b), except that--
                                ``(i) discounts shall be applied under this
                            subsection to prescription drug plans and MA-PD
                            plans instead of State plans under title XIX;
                                ``(ii) PDP sponsors and MA organizations
                            shall be responsible, instead of States, for
                            provision of necessary utilization information
                            to drug manufacturers; and
                                ``(iii) sponsors and MA organizations shall
                            be responsible for reporting information on
                            drug-component negotiated price, instead of
                            other manufacturer prices.
                        ``(C) Counting discount toward true out-of-pocket
                    costs.--Under the discount agreement, in applying
                    subsection (b)(4), with regard to subparagraph (C)(i)
                    of such subsection, if a qualified enrollee purchases
                    the qualified drug insofar as the enrollee is in an
                    actual gap of coverage (as defined in paragraph
                    (5)(D)), the amount of the discount under the agreement
                    shall be treated and counted as costs incurred by the
                    plan enrollee.
                ``(3) Discount amount.--The amount of the discount
            specified in this paragraph for a discount period for a plan is
            equal to 50 percent of the amount of the drug-component
            negotiated price (as defined in paragraph (5)(C)) for
            qualifying drugs for the period involved.
                ``(4) Additional terms.--In the case of a discount provided
            under this subsection with respect to a prescription drug plan
            offered by a PDP sponsor or an MA-PD plan offered by an MA
            organization, if a qualified enrollee purchases the qualified
            drug--
                        ``(A) insofar as the enrollee is in an actual gap
                    of coverage (as defined in paragraph (5)(D)), the
                    sponsor or plan shall provide the discount to the
                    enrollee at the time the enrollee pays for the drug;
                    and
                        ``(B) insofar as the enrollee is in the portion of
                    the original gap in coverage (as defined in paragraph
                    (5)(E)) that is not in the actual gap in coverage, the
                    discount shall not be applied against the negotiated
                    price (as defined in subsection (d)(1)(B)) for the
                    purpose of calculating the beneficiary payment.
                ``(5) Definitions.--In this subsection:
                        ``(A) Qualifying drug.--The term `qualifying drug'
                    means, with respect to a prescription drug plan or MA-
                    PD plan, a drug or biological product that--
                                ``(i)(I) is a drug produced or distributed
                            under an original new drug application approved
                            by the Food and Drug Administration, including
                            a drug product marketed by any cross-licensed
                            producers or distributors operating under the
                            new drug application;
                                ``(II) is a drug that was originally
                            marketed under an original new drug application
                            approved by the Food and Drug Administration;
                            or
                                ``(III) is a biological product as approved
                            under Section 351(a) of the Public Health
                            Services Act;
                                ``(ii) is covered under the formulary of
                            the plan; and
                                ``(iii) is dispensed to an individual who
                            is in the original gap in coverage.
                        ``(B) Qualifying enrollee.--The term `qualifying
                    enrollee' means an individual enrolled in a
                    prescription drug plan or MA-PD plan other than such an
                    individual who is a subsidy-eligible individual (as
                    defined in section 1860D-14(a)(3)).
                        ``(C) Drug-component negotiated price.--The term
                    `drug-component negotiated price' means, with respect
                    to a qualifying drug, the negotiated price (as defined
                    in subsection (d)(1)(B)), as determined without regard
                    to any dispensing fee, of the drug under the
                    prescription drug plan or MA-PD plan involved.
                        ``(D) Actual gap in coverage.--The term `actual gap
                    in coverage' means the gap in prescription drug
                    coverage that occurs between the initial coverage limit
                    (as modified under subparagraph (B) of subsection
                    (b)(7)) and the annual out-of-pocket threshold (as
                    modified under subparagraph (C) of such subsection).
                        ``(E) Original gap in coverage.--The term `original
                    in gap coverage' means the gap in prescription drug
                    coverage that would occur between the initial coverage
                    limit (described in subsection (b)(3)) and the out-of-
                    pocket threshold (as defined in subsection (b)(4))(B)
                    if subsection (b)(7) did not apply.''.

    SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMISSION OF CLAIMS BY
                  PHARMACIES LOCATED IN OR CONTRACTING WITH LONG-TERM CARE
                  FACILITIES.

        (a) Part D Submission.--Section 1860D-12(b) of the Social Security
    Act (42 U.S.C. 1395w-112(b)), as amended by section 172(a)(1) of Public
    Law 110-275, is amended by striking paragraph (5) and redesignating
    paragraph (6) and paragraph (7), as added by section 1181(b)(2), as
    paragraph (5) and paragraph (6), respectively.
        (b) Submission to MA-PD Plans.--Section 1857(f)(3) of the Social
    Security Act (42 U.S.C. 1395w-27(f)(3)), as added by section 171(b) of
    Public Law 110-275 and amended by section 172(a)(2) of such Public Law,
    is amended by striking subparagraph (B) and redesignating subparagraph
    (C) as subparagraph (B).
        (c) Effective Date.--The amendments made by this section shall
    apply for contract years beginning with 2010.

    SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE PROGRAMS
                  AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS
                  TOWARD THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.

        (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security
    Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
                (1) in clause (i), by striking ``and'' at the end;
                (2) in clause (ii)--
                        (A) by striking ``such costs shall be treated as
                    incurred only if'' and inserting ``subject to clause
                    (iii), such costs shall be treated as incurred only
                    if'';
                        (B) by striking ``, under section 1860D-14, or
                    under a State Pharmaceutical Assistance Program''; and
                        (C) by striking the period at the end and inserting
                    ``; and''; and
                (3) by inserting after clause (ii) the following new
            clause:
                                ``(iii) such costs shall be treated as
                            incurred and shall not be considered to be
                            reimbursed under clause (ii) if such costs are
                            borne or paid--
                                        ``(I) under section 1860D-14;
                                        ``(II) under a State Pharmaceutical
                                    Assistance Program;
                                        ``(III) by the Indian Health
                                    Service, an Indian tribe or tribal
                                    organization, or an urban Indian
                                    organization (as defined in section 4
                                    of the Indian Health Care Improvement
                                    Act); or
                                        ``(IV) under an AIDS Drug
                                    Assistance Program under part B of
                                    title XXVI of the Public Health Service
                                    Act.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to costs incurred on or after January 1, 2011.

    SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLLMENT FOR FORMULARY
                  CHANGES THAT ADVERSELY IMPACT AN ENROLLEE.

        (a) In General.--Section 1860D-1(b)(3) of the Social Security Act
    (42 U.S.C. 1395w-101(b)(3)) is amended by adding at the end the
    following new subparagraph:
                        ``(F) Change in formulary resulting in increase in
                    cost-sharing.--
                                ``(i) In general.--Except as provided in
                            clause (ii), in the case of an individual
                            enrolled in a prescription drug plan (or MA-PD
                            plan) who has been prescribed and is using a
                            covered part D drug while so enrolled, if the
                            formulary of the plan is materially changed
                            (other than at the end of a contract year) so
                            to reduce the coverage (or increase the cost-
                            sharing) of the drug under the plan.
                                ``(ii) Exception.--Clause (i) shall not
                            apply in the case that a drug is removed from
                            the formulary of a plan because of a recall or
                            withdrawal of the drug issued by the Food and
                            Drug Administration, because the drug is
                            replaced with a generic drug that is a
                            therapeutic equivalent, or because of
                            utilization management applied to--
                                        ``(I) a drug whose labeling
                                    includes a boxed warning required by
                                    the Food and Drug Administration under
                                    section 210.57(c)(1) of title 21, Code
                                    of Federal Regulations (or a successor
                                    regulation); or
                                        ``(II) a drug required under
                                    subsection (c)(2) of section 505-1 of
                                    the Federal Food, Drug, and Cosmetic
                                    Act to have a Risk Evaluation and
                                    Management Strategy that includes
                                    elements under subsection (f) of such
                                    section.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to contract years beginning on or after January 1, 2011.

                 Subtitle F--Medicare Rural Access Protections

    SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS.

        (a) Additional Telehealth Site.--
                (1) In general.--Paragraph (4)(C)(ii) of section 1834(m) of
            the Social Security Act (42 U.S.C. 1395m(m)) is amended by
            adding at the end the following new subclause:
                                        ``(IX) A renal dialysis facility.''
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to services furnished on or after January 1, 2011.
        (b) Telehealth Advisory Committee.--
                (1) Establishment.--Section 1868 of the Social Security Act
            (42 U.S.C. 1395ee) is amended--
                        (A) in the heading, by adding at the end the
                    following: ``telehealth advisory committee''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(c) Telehealth Advisory Committee.--
                ``(1) In general.--The Secretary shall appoint a Telehealth
            Advisory Committee (in this subsection referred to as the
            `Advisory Committee') to make recommendations to the Secretary
            on policies of the Centers for Medicare & Medicaid Services
            regarding telehealth services as established under section
            1834(m), including the appropriate addition or deletion of
            services (and HCPCS codes) to those specified in paragraphs
            (4)(F)(i) and (4)(F)(ii) of such section and for authorized
            payment under paragraph (1) of such section.
                ``(2) Membership; terms.--
                        ``(A) Membership.--
                                ``(i) In general.--The Advisory Committee
                            shall be composed of 9 members, to be appointed
                            by the Secretary, of whom--
                                        ``(I) 5 shall be practicing
                                    physicians;
                                        ``(II) 2 shall be practicing non-
                                    physician health care practitioners;
                                    and
                                        ``(III) 2 shall be administrators
                                    of telehealth programs.
                                ``(ii) Requirements for appointing
                            members.--In appointing members of the Advisory
                            Committee, the Secretary shall--
                                        ``(I) ensure that each member has
                                    prior experience with the practice of
                                    telemedicine or telehealth;
                                        ``(II) give preference to
                                    individuals who are currently providing
                                    telemedicine or telehealth services or
                                    who are involved in telemedicine or
                                    telehealth programs;
                                        ``(III) ensure that the membership
                                    of the Advisory Committee represents a
                                    balance of specialties and geographic
                                    regions; and
                                        ``(IV) take into account the
                                    recommendations of stakeholders.
                        ``(B) Terms.--The members of the Advisory Committee
                    shall serve for such term as the Secretary may specify.
                        ``(C) Conflicts of interest.--An advisory committee
                    member may not participate with respect to a particular
                    matter considered in an advisory committee meeting if
                    such member (or an immediate family member of such
                    member) has a financial interest that could be affected
                    by the advice given to the Secretary with respect to
                    such matter.
                ``(3) Meetings.--The Advisory Committee shall meet twice
            each calendar year and at such other times as the Secretary may
            provide.
                ``(4) Permanent committee.--Section 14 of the Federal
            Advisory Committee Act (5 U.S.C. App.) shall not apply to the
            Advisory Committee.''
                (2) Following recommendations.--Section 1834(m)(4)(F) of
            such Act (42 U.S.C. 1395m(m)(4)(F)) is amended by adding at the
            end the following new clause:
                                ``(iii) Recommendations of the telehealth
                            advisory committee.--In making determinations
                            under clauses (i) and (ii), the Secretary shall
                            take into account the recommendations of the
                            Telehealth Advisory Committee (established
                            under section 1868(c)) when adding or deleting
                            services (and HCPCS codes) and in establishing
                            policies of the Centers for Medicare & Medicaid
                            Services regarding the delivery of telehealth
                            services. If the Secretary does not implement
                            such a recommendation, the Secretary shall
                            publish in the Federal Register a statement
                            regarding the reason such recommendation was
                            not implemented.''
                (3) Waiver of administrative limitation.--The Secretary of
            Health and Human Services shall establish the Telehealth
            Advisory Committee under the amendment made by paragraph (1)
            notwithstanding any limitation that may apply to the number of
            advisory committees that may be established (within the
            Department of Health and Human Services or otherwise).

    SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

        Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C.
    1395l(t)(7)(D)(i)) is amended--
                (1) in subclause (II)--
                        (A) in the first sentence, by striking ```2010''and
                    inserting ``2012''; and
                        (B) in the second sentence, by striking ``or 2009''
                    and inserting ``, 2009, 2010, or 2011''; and
                (2) in subclause (III), by striking ``January 1, 2010'' and
            inserting ``January 1, 2012''.

    SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.

        Subsection (a) of section 106 of division B of the Tax Relief and
    Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section
    117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
    Law 110-173) and section 124 of the Medicare Improvements for Patients
    and Providers Act of 2008 (Public Law 110-275), is amended by striking
    ``September 30, 2009'' and inserting ``September 30, 2011''.

    SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.

        Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
    4(e)(1)(E)) is amended by striking ``before January 1, 2010'' and
    inserting ``before January 1, 2012''.

    SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN
                  PHYSICIAN PATHOLOGY SERVICES.

        Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
    Improvement and Protection Act of 2000 (as enacted into law by section
    1(a)(6) of Public Law 106-554), as amended by section 732 of the
    Medicare Prescription Drug, Improvement, and Modernization Act of 2003
    (42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief
    and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of
    the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law
    110-173), and section 136 of the Medicare Improvements for Patients and
    Providers Act of 1008 (Public Law 110-275), is amended by striking
    ``and 2009'' and inserting ``2009, 2010, and 2011''.

    SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

        (a) In General.--Section 1834(l)(13) of the Social Security Act (42
    U.S.C. 1395m(l)(13)) is amended--
                (1) in subparagraph (A)--
                        (A) in the matter preceding clause (i), by striking
                    ``before January 1, 2010'' and inserting ``before
                    January 1, 2012''; and
                        (B) in each of clauses (i) and (ii), by striking
                    ``before January 1, 2010'' and inserting ``before
                    January 1, 2012''.
        (b) Air Ambulance Improvements.--Section 146(b)(1) of the Medicare
    Improvements for Patients and Providers Act of 2008 (Public Law 110-
    275) is amended by striking ``ending on December 31, 2009'' and
    inserting ``ending on December 31, 2011''.

                   TITLE J--MEDICARE BENEFICIARY IMPROVEMENTS

      Subtitle A--Improving and Simplifying Financial Assistance for Low
                         Income Medicare Beneficiaries

    SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAVINGS PROGRAM AND LOW-
                  INCOME SUBSIDY PROGRAM.

        (a) Application of Highest Level Permitted Under LIS to All Subsidy
    Eligible Individuals.--
                (1) In general.--Section 1860D-14(a)(1) of the Social
            Security Act (42 U.S.C. 1395w-114(a)(1)) is amended in the
            matter before subparagraph (A), by inserting ``(or, beginning
            with 2012, paragraph (3)(E))'' after ``paragraph (3)(D)''.
                (2) Annual increase in lis resource test.--Section 1860D-
            14(a)(3)(E)(i) of such Act (42 U.S.C. 1395w-114(a)(3)(E)(i)) is
            amended--
                        (A) by striking ``and'' at the end of subclause
                    (I);
                        (B) in subclause (II), by inserting ``(before
                    2012)'' after ``subsequent year'';
                        (C) by striking the period at the end of subclause
                    (II) and inserting a semicolon;
                        (D) by inserting after subclause (II) the following
                    new subclauses:
                                        ``(III) for 2012, $17,000 (or
                                    $34,000 in the case of the combined
                                    value of the individual's assets or
                                    resources and the assets or resources
                                    of the individual's spouse); and
                                        ``(IV) for a subsequent year, the
                                    dollar amounts specified in this
                                    subclause (or subclause (III)) for the
                                    previous year increased by the annual
                                    percentage increase in the consumer
                                    price index (all items; U.S. city
                                    average) as of September of such
                                    previous year.''; and
                        (E) in the last sentence, by inserting ``or (IV)''
                    after ``subclause (II)''.
                (3) Application of lis test under medicare savings
            program.--Section 1905(p)(1)(C) of such Act (42 U.S.C.
            1396d(p)(1)(C)) is amended--
                        (A) by striking ``effective beginning with January
                    1, 2010'' and inserting ``effective for the period
                    beginning with January 1, 2010, and ending with
                    December 31, 2011''; and
                        (B) by inserting before the period at the end the
                    following: ``or, effective beginning with January 1,
                    2012, whose resources (as so determined) do not exceed
                    the maximum resource level applied for the year under
                    subparagraph (E) of section 1860D-14(a)(3) (determined
                    without regard to the life insurance policy exclusion
                    provided under subparagraph (G) of such section)
                    applicable to an individual or to the individual and
                    the individual's spouse (as the case may be)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to eligibility determinations for income-related subsidies and
    medicare cost-sharing furnished for periods beginning on or after
    January 1, 2012.

    SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-
                  INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.

        (a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social
    Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
                (1) by striking ``Institutionalized individuals.--In'' and
            inserting ``Elimination of cost-sharing for certain full-
            benefit dual eligible individuals.--
                                        ``(I) Institutionalized
                                    individuals.--In''; and
                (2) by adding at the end the following new subclause:
                                        ``(II) Certain other individuals.--
                                    In the case of an individual who is a
                                    full-benefit dual eligible individual
                                    and with respect to whom there has been
                                    a determination that but for the
                                    provision of home and community based
                                    care (whether under section 1915, 1932,
                                    or under a waiver under section 1115)
                                    the individual would require the level
                                    of care provided in a hospital or a
                                    nursing facility or intermediate care
                                    facility for the mentally retarded the
                                    cost of which could be reimbursed under
                                    the State plan under title XIX, the
                                    elimination of any beneficiary
                                    coinsurance described in section 1860D-
                                    2(b)(2) (for all amounts through the
                                    total amount of expenditures at which
                                    benefits are available under section
                                    1860D-2(b)(4)).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to drugs dispensed on or after January 1, 2011.

    SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.

        (a) Administrative Verification of Income and Resources Under the
    Low-income Subsidy Program.--
                (1) In general.--Clause (iii) of section 1860D-14(a)(3)(E)
            of the Social Security Act (42 U.S.C. 1395w-114(a)(3)(E)) is
            amended to read as follows:
                                ``(iii) Certification of income and
                            resources.--For purposes of applying this
                            section--
                                        ``(I) an individual shall be
                                    permitted to apply on the basis of
                                    self-certification of income and
                                    resources; and
                                        ``(II) matters attested to in the
                                    application shall be subject to
                                    appropriate methods of verification
                                    without the need of the individual to
                                    provide additional documentation,
                                    except in extraordinary situations as
                                    determined by the Commissioner.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply beginning January 1, 2010.
        (b) Disclosures To Facilitate Identification of Individuals Likely
    To Be Ineligible for the Low-income Assistance Under the Medicare
    Prescription Drug Program To Assist Social Security Administration's
    Outreach to Eligible Individuals.--For provision authorizing disclosure
    of return information to facilitate identification of individuals
    likely to be ineligible for low-income subsidies under Medicare
    prescription drug program, see section 1801.

    SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIMBURSEMENTS FOR
                  RETROACTIVE LOW INCOME SUBSIDY ENROLLMENT.

        (a) In General.--In the case of a retroactive LIS enrollment
    beneficiary who is enrolled under a prescription drug plan under part D
    of title XVIII of the Social Security Act (or an MA-PD plan under part
    C of such title), the beneficiary (or any eligible third party) is
    entitled to reimbursement by the plan for covered drug costs incurred
    by the beneficiary during the retroactive coverage period of the
    beneficiary in accordance with subsection (b) and in the case of such a
    beneficiary described in subsection (c)(4)(A)(i), such reimbursement
    shall be made automatically by the plan upon receipt of appropriate
    notice the beneficiary is eligible for assistance described in such
    subsection (c)(4)(A)(i) without further information required to be
    filed with the plan by the beneficiary.
        (b) Administrative Requirements Relating to Reimbursements.--
                (1) Line-item description.--Each reimbursement made by a
            prescription drug plan or MA-PD plan under subsection (a) shall
            include a line-item description of the items for which the
            reimbursement is made.
                (2) Timing of reimbursements.--A prescription drug plan or
            MA-PD plan must make a reimbursement under subsection (a) to a
            retroactive LIS enrollment beneficiary, with respect to a
            claim, not later than 45 days after--
                        (A) in the case of a beneficiary described in
                    subsection (c)(4)(A)(i), the date on which the plan
                    receives notice from the Secretary that the beneficiary
                    is eligible for assistance described in such
                    subsection; or
                        (B) in the case of a beneficiary described in
                    subsection (c)(4)(A)(ii), the date on which the
                    beneficiary files the claim with the plan.
                (3) Reporting requirement.--For each month beginning with
            January 2011, each prescription drug plan and each MA-PD plan
            shall report to the Secretary the following:
                        (A) The number of claims the plan has readjudicated
                    during the month due to a beneficiary becoming
                    retroactively eligible for subsidies available under
                    section 1860D-14 of the Social Security Act.
                        (B) The total value of the readjudicated claim
                    amount for the month.
                        (C) The Medicare Health Insurance Claims Number of
                    beneficiaries for whom claims were readjudicated.
                        (D) For the claims described in subparagraphs (A)
                    and (B), an attestation to the Administrator of the
                    Centers for Medicare & Medicaid Services of the total
                    amount of reimbursement the plan has provided to
                    beneficiaries for premiums and cost-sharing that the
                    beneficiary overpaid for which the plan received
                    payment from the Centers for Medicare & Medicaid
                    Services.
        (c) Definitions.--For purposes of this section:
                (1) Covered drug costs.--The term ``covered drug costs''
            means, with respect to a retroactive LIS enrollment beneficiary
            enrolled under a prescription drug plan under part D of title
            XVIII of the Social Security Act (or an MA-PD plan under part C
            of such title), the amount by which--
                        (A) the costs incurred by such beneficiary during
                    the retroactive coverage period of the beneficiary for
                    covered part D drugs, premiums, and cost-sharing under
                    such title; exceeds
                        (B) such costs that would have been incurred by
                    such beneficiary during such period if the beneficiary
                    had been both enrolled in the plan and recognized by
                    such plan as qualified during such period for the low
                    income subsidy under section 1860D-14 of the Social
                    Security Act to which the individual is entitled.
                (2) Eligible third party.--The term ``eligible third
            party'' means, with respect to a retroactive LIS enrollment
            beneficiary, an organization or other third party that is owed
            payment on behalf of such beneficiary for covered drug costs
            incurred by such beneficiary during the retroactive coverage
            period of such beneficiary.
                (3) Retroactive coverage period.--The term ``retroactive
            coverage period'' means--
                        (A) with respect to a retroactive LIS enrollment
                    beneficiary described in paragraph (4)(A)(i), the
                    period--
                                (i) beginning on the effective date of the
                            assistance described in such paragraph for
                            which the individual is eligible; and
                                (ii) ending on the date the plan
                            effectuates the status of such individual as so
                            eligible; and
                        (B) with respect to a retroactive LIS enrollment
                    beneficiary described in paragraph (4)(A)(ii), the
                    period--
                                (i) beginning on the date the individual is
                            both entitled to benefits under part A, or
                            enrolled under part B, of title XVIII of the
                            Social Security Act and eligible for medical
                            assistance under a State plan under title XIX
                            of such Act; and
                                (ii) ending on the date the plan
                            effectuates the status of such individual as a
                            full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act).
                (4) Retroactive lis enrollment beneficiary.--
                        (A) In general.--The term ``retroactive LIS
                    enrollment beneficiary'' means an individual who--
                                (i) is enrolled in a prescription drug plan
                            under part D of title XVIII of the Social
                            Security Act (or an MA-PD plan under part C of
                            such title) and subsequently becomes eligible
                            as a full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act), an
                            individual receiving a low-income subsidy under
                            section 1860D-14 of such Act, an individual
                            receiving assistance under the Medicare Savings
                            Program implemented under clauses (i), (iii),
                            and (iv) of section 1902(a)(10)(E) of such Act,
                            or an individual receiving assistance under the
                            supplemental security income program under
                            section 1611 of such Act; or
                                (ii) subject to subparagraph (B)(i), is a
                            full-benefit dual eligible individual (as
                            defined in section 1935(c)(6) of such Act) who
                            is automatically enrolled in such a plan under
                            section 1860D-1(b)(1)(C) of such Act.
                        (B) Exception for beneficiaries enrolled in rfp
                    plan.--
                                (i) In general.--In no case shall an
                            individual described in subparagraph (A)(ii)
                            include an individual who is enrolled, pursuant
                            to a RFP contract described in clause (ii), in
                            a prescription drug plan offered by the sponsor
                            of such plan awarded such contract.
                                (ii) RFP contract described.--The RFP
                            contract described in this section is a
                            contract entered into between the Secretary and
                            a sponsor of a prescription drug plan pursuant
                            to the Centers for Medicare & Medicaid
                            Services' request for proposals issued on
                            February 17, 2009, relating to Medicare part D
                            retroactive coverage for certain low income
                            beneficiaries, or a similar subsequent request
                            for proposals.

    SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.

        (a) In General.--Section 1860D-1(b)(1)(C) of the Social Security
    Act (42 U.S.C. 1395w-101(b)(1)(C)) is amended by adding after ``PDP
    region'' the following: ``or through use of an intelligent assignment
    process that is designed to maximize the access of such individual to
    necessary prescription drugs while minimizing costs to such individual
    and to the program under this part to the greatest extent possible. In
    the case the Secretary enrolls such individuals through use of an
    intelligent assignment process, such process shall take into account
    the extent to which prescription drugs necessary for the individual are
    covered in the case of a PDP sponsor of a prescription drug plan that
    uses a formulary, the use of prior authorization or other restrictions
    on access to coverage of such prescription drugs by such a sponsor, and
    the overall quality of a prescription drug plan as measured by quality
    ratings established by the Secretary.''
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect for contract years beginning with 2012.

    SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC ENROLLMENT PROCESS
                  FOR CERTAIN SUBSIDY ELIGIBLE INDIVIDUALS.

        (a) Special Enrollment Period.--Section 1860D-1(b)(3)(D) of the
    Social Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended to read
    as follows:
                        ``(D) Subsidy eligible individuals.--In the case of
                    an individual (as determined by the Secretary) who is
                    determined under subparagraph (B) of section 1860D-
                    14(a)(3) to be a subsidy eligible individual.''.
        (b) Automatic Enrollment.--Section 1860D-1(b)(1) of the Social
    Security Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at the
    end the following new subparagraph:
                        ``(D) Special rule for subsidy eligible
                    individuals.--The process established under
                    subparagraph (A) shall include, in the case of an
                    individual described in section 1860D-1(b)(3)(D) who
                    fails to enroll in a prescription drug plan or an MA-PD
                    plan during the special enrollment established under
                    such section applicable to such individual, the
                    application of the assignment process described in
                    subparagraph (C) to such individual in the same manner
                    as such assignment process applies to a part D eligible
                    individual described in such subparagraph (C). Nothing
                    in the previous sentence shall prevent an individual
                    described in such sentence from declining enrollment in
                    a plan determined appropriate by the Secretary (or in
                    the program under this part) or from changing such
                    enrollment.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to subsidy determinations made for months beginning with January
    2011.

    SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO REBATE IN CALCULATION OF
                  LOW INCOME SUBSIDY BENCHMARK.

        (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social
    Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by
    inserting before the period the following: ``before the application of
    the monthly rebate computed under section 1854(b)(1)(C)(i) for that
    plan and year involved''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to subsidy determinations made for months beginning with January
    2011.

                    Subtitle B--Reducing Health Disparities

    SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.

        (a) Ensuring Effective Communication by the Centers for Medicare &
    Medicaid Services.--
                (1) Study on medicare payments for language services.--The
            Secretary of Health and Human Services shall conduct a study
            that examines the extent to which Medicare service providers
            utilize, offer, or make available language services for
            beneficiaries who are limited English proficient and ways that
            Medicare should develop payment systems for language services.
                (2) Analyses.--The study shall include an analysis of each
            of the following:
                        (A) How to develop and structure appropriate
                    payment systems for language services for all Medicare
                    service providers.
                        (B) The feasibility of adopting a payment
                    methodology for on-site interpreters, including
                    interpreters who work as independent contractors and
                    interpreters who work for agencies that provide on-site
                    interpretation, pursuant to which such interpreters
                    could directly bill Medicare for services provided in
                    support of physician office services for an LEP
                    Medicare patient.
                        (C) The feasibility of Medicare contracting
                    directly with agencies that provide off-site
                    interpretation including telephonic and video
                    interpretation pursuant to which such contractors could
                    directly bill Medicare for the services provided in
                    support of physician office services for an LEP
                    Medicare patient.
                        (D) The feasibility of modifying the existing
                    Medicare resource-based relative value scale (RBRVS) by
                    using adjustments (such as multipliers or add-ons) when
                    a patient is LEP.
                        (E) How each of options described in a previous
                    paragraph would be funded and how such funding would
                    affect physician payments, a physician's practice, and
                    beneficiary cost-sharing.
                        (F) The extent to which providers under parts A and
                    B of title XVIII of the Social Security Act, MA
                    organizations offering Medicare Advantage plans under
                    part C of such title and PDP sponsors of a prescription
                    drug plan under part D of such title utilize, offer, or
                    make available language services for beneficiaries with
                    limited English proficiency.
                        (G) The nature and type of language services
                    provided by States under title XIX of the Social
                    Security Act and the extent to which such services
                    could be utilized by beneficiaries and providers under
                    title XVIII of such Act.
                (3) Variation in payment system described.--The payment
            systems described in paragraph (2)(A) may allow variations
            based upon types of service providers, available delivery
            methods, and costs for providing language services including
            such factors as--
                        (A) the type of language services provided (such as
                    provision of health care or health care related
                    services directly in a non-English language by a
                    bilingual provider or use of an interpreter);
                        (B) type of interpretation services provided (such
                    as in-person, telephonic, video interpretation);
                        (C) the methods and costs of providing language
                    services (including the costs of providing language
                    services with internal staff or through contract with
                    external independent contractors or agencies, or both);
                        (D) providing services for languages not frequently
                    encountered in the United States; and
                        (E) providing services in rural areas.
                (4) Report.--The Secretary shall submit a report on the
            study conducted under subsection (a) to appropriate committees
            of Congress not later than 12 months after the date of the
            enactment of this Act.
                (5) Exemption from paperwork reduction act.--Chapter 35 of
            title 44, United States Code (commonly known as the ``Paperwork
            Reduction Act''), shall not apply for purposes of carrying out
            this subsection.
                (6) Authorization of appropriations.--There is authorized
            to be appropriated to carry out this subsection such sums as
            are necessary.
        (b) Health Plans.--Section 1857(g)(1) of the Social Security Act
    (42 U.S.C. 1395w-27(g)(1)) is amended--
                (1) by striking ``or'' at the end of subparagraph (F);
                (2) by adding ``or'' at the end of subparagraph (G); and
                (3) by inserting after subparagraph (G) the following new
            subparagraph:
                        ``(H) fails substantially to provide language
                    services to limited English proficient beneficiaries
                    enrolled in the plan that are required under law;''.

    SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR MEDICARE BENEFICIARIES
                  WITH LIMITED ENGLISH PROFICIENCY BY PROVIDING
                  REIMBURSEMENT FOR CULTURALLY AND LINGUISTICALLY
                  APPROPRIATE SERVICES.

        (a) In General.--Not later than 6 months after the date of the
    completion of the study described in section 1221(a), the Secretary,
    acting through the Centers for Medicare & Medicaid Services, shall
    carry out a demonstration program under which the Secretary shall award
    not fewer than 24 3-year grants to eligible Medicare service providers
    (as described in subsection (b)(1)) to improve effective communication
    between such providers and Medicare beneficiaries who are living in
    communities where racial and ethnic minorities, including populations
    that face language barriers, are underserved with respect to such
    services. In designing and carrying out the demonstration the Secretary
    shall take into consideration the results of the study conducted under
    section 1221(a) and adjust, as appropriate, the distribution of grants
    so as to better target Medicare beneficiaries who are in the greatest
    need of language services. The Secretary shall not authorize a grant
    larger than $500,000 over three years for any grantee.
        (b) Eligibility; Priority.--
                (1) Eligibility.--To be eligible to receive a grant under
            subsection (a) an entity shall--
                        (A) be--
                                (i) a provider of services under part A of
                            title XVIII of the Social Security Act;
                                (ii) a service provider under part B of
                            such title;
                                (iii) a part C organization offering a
                            Medicare part C plan under part C of such
                            title; or
                                (iv) a PDP sponsor of a prescription drug
                            plan under part D of such title; and
                        (B) prepare and submit to the Secretary an
                    application, at such time, in such manner, and
                    accompanied by such additional information as the
                    Secretary may require.
                (2) Priority.--
                        (A) Distribution.--To the extent feasible, in
                    awarding grants under this section, the Secretary shall
                    award--
                                (i) at least 6 grants to providers of
                            services described in paragraph (1)(A)(i);
                                (ii) at least 6 grants to service providers
                            described in paragraph (1)(A)(ii);
                                (iii) at least 6 grants to organizations
                            described in paragraph (1)(A)(iii); and
                                (iv) at least 6 grants to sponsors
                            described in paragraph (1)(A)(iv).
                        (B) For community organizations.--The Secretary
                    shall give priority to applicants that have developed
                    partnerships with community organizations or with
                    agencies with experience in language access.
                        (C) Variation in grantees.--The Secretary shall
                    also ensure that the grantees under this section
                    represent, among other factors, variations in--
                                (i) different types of language services
                            provided and of service providers and
                            organizations under parts A through D of title
                            XVIII of the Social Security Act;
                                (ii) languages needed and their frequency
                            of use;
                                (iii) urban and rural settings;
                                (iv) at least two geographic regions, as
                            defined by the Secretary; and
                                (v) at least two large metropolitan
                            statistical areas with diverse populations.
        (c) Use of Funds.--
                (1) In general.--A grantee shall use grant funds received
            under this section to pay for the provision of competent
            language services to Medicare beneficiaries who are limited
            English proficient. Competent interpreter services may be
            provided through on-site interpretation, telephonic
            interpretation, or video interpretation or direct provision of
            health care or health care related services by a bilingual
            health care provider. A grantee may use bilingual providers,
            staff, or contract interpreters. A grantee may use grant funds
            to pay for competent translation services. A grantee may use up
            to 10 percent of the grant funds to pay for administrative
            costs associated with the provision of competent language
            services and for reporting required under subsection (e).
                (2) Organizations.--Grantees that are part C organizations
            or PDP sponsors must ensure that their network providers
            receive at least 50 percent of the grant funds to pay for the
            provision of competent language services to Medicare
            beneficiaries who are limited English proficient, including
            physicians and pharmacies.
                (3) Determination of payments for language services.--
            Payments to grantees shall be calculated based on the estimated
            numbers of limited English proficient Medicare beneficiaries in
            a grantee's service area utilizing--
                        (A) data on the numbers of limited English
                    proficient individuals who speak English less than
                    ``very well'' from the most recently available data
                    from the Bureau of the Census or other State-based
                    study the Secretary determines likely to yield accurate
                    data regarding the number of such individuals served by
                    the grantee; or
                        (B) the grantee's own data if the grantee routinely
                    collects data on Medicare beneficiaries' primary
                    language in a manner determined by the Secretary to
                    yield accurate data and such data shows greater numbers
                    of limited English proficient individuals than the data
                    listed in subparagraph (A).
                (4) Limitations.--
                        (A) Reporting.--Payments shall only be provided
                    under this section to grantees that report their costs
                    of providing language services as required under
                    subsection (e) and may be modified annually at the
                    discretion of the Secretary. If a grantee fails to
                    provide the reports under such section for the first
                    year of a grant, the Secretary may terminate the grant
                    and solicit applications from new grantees to
                    participate in the subsequent two years of the
                    demonstration program.
                        (B) Type of services.--
                                (i) In general.--Subject to clause (ii),
                            payments shall be provided under this section
                            only to grantees that utilize competent
                            bilingual staff or competent interpreter or
                            translation services which--
                                        (I) if the grantee operates in a
                                    State that has statewide health care
                                    interpreter standards, meet the State
                                    standards currently in effect; or
                                        (II) if the grantee operates in a
                                    State that does not have statewide
                                    health care interpreter standards,
                                    utilizes competent interpreters who
                                    follow the National Council on
                                    Interpreting in Health Care's Code of
                                    Ethics and Standards of Practice.
                                (ii) Exemptions.--The requirements of
                            clause (i) shall not apply--
                                        (I) in the case of a Medicare
                                    beneficiary who is limited English
                                    proficient (who has been informed in
                                    the beneficiary's primary language of
                                    the availability of free interpreter
                                    and translation services) and who
                                    requests the use of family, friends, or
                                    other persons untrained in
                                    interpretation or translation and the
                                    grantee documents the request in the
                                    beneficiary's record; and
                                        (II) in the case of a medical
                                    emergency where the delay directly
                                    associated with obtaining a competent
                                    interpreter or translation services
                                    would jeopardize the health of the
                                    patient.
                            Nothing in clause (ii)(II) shall be construed
                            to exempt emergency rooms or similar entities
                            that regularly provide health care services in
                            medical emergencies from having in place
                            systems to provide competent interpreter and
                            translation services without undue delay.
        (d) Assurances.--Grantees under this section shall--
                (1) ensure that appropriate clinical and support staff
            receive ongoing education and training in linguistically
            appropriate service delivery;
                (2) ensure the linguistic competence of bilingual
            providers;
                (3) offer and provide appropriate language services at no
            additional charge to each patient with limited English
            proficiency at all points of contact, in a timely manner during
            all hours of operation;
                (4) notify Medicare beneficiaries of their right to receive
            language services in their primary language;
                (5) post signage in the languages of the commonly
            encountered group or groups present in the service area of the
            organization; and
                (6) ensure that--
                        (A) primary language data are collected for
                    recipients of language services; and
                        (B) consistent with the privacy protections
                    provided under the regulations promulgated pursuant to
                    section 264(c) of the Health Insurance Portability and
                    Accountability Act of 1996 (42 U.S.C. 1320d-2 note), if
                    the recipient of language services is a minor or is
                    incapacitated, the primary language of the parent or
                    legal guardian is collected and utilized.
        (e) Reporting Requirements.--Grantees under this section shall
    provide the Secretary with reports at the conclusion of the each year
    of a grant under this section. Each report shall include at least the
    following information:
                (1) The number of Medicare beneficiaries to whom language
            services are provided.
                (2) The languages of those Medicare beneficiaries.
                (3) The types of language services provided (such as
            provision of services directly in non-English language by a
            bilingual health care provider or use of an interpreter).
                (4) Type of interpretation (such as in-person, telephonic,
            or video interpretation).
                (5) The methods of providing language services (such as
            staff or contract with external independent contractors or
            agencies).
                (6) The length of time for each interpretation encounter.
                (7) The costs of providing language services (which may be
            actual or estimated, as determined by the Secretary).
        (f) No Cost Sharing.--Limited English proficient Medicare
    beneficiaries shall not have to pay cost-sharing or co-pays for
    language services provided through this demonstration program.
        (g) Evaluation and Report.--The Secretary shall conduct an
    evaluation of the demonstration program under this section and shall
    submit to the appropriate committees of Congress a report not later
    than 1 year after the completion of the program. The report shall
    include the following:
                (1) An analysis of the patient outcomes and costs of
            furnishing care to the limited English proficient Medicare
            beneficiaries participating in the project as compared to such
            outcomes and costs for limited English proficient Medicare
            beneficiaries not participating.
                (2) The effect of delivering culturally and linguistically
            appropriate services on beneficiary access to care, utilization
            of services, efficiency and cost-effectiveness of health care
            delivery, patient satisfaction, and select health outcomes.
                (3) Recommendations, if any, regarding the extension of
            such project to the entire Medicare program.
        (h) General Provisions.--Nothing in this section shall be construed
    to limit otherwise existing obligations of recipients of Federal
    financial assistance under title VI of the Civil Rights Act of 1964 (42
    U.S.C. 2000(d) et seq.) or any other statute.
        (i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $16,000,000 for each fiscal year
    of the demonstration program.

    SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS SERVICES.

        (a) In General.--The Secretary of Health and Human Services shall
    enter into an arrangement with the Institute of Medicine under which
    the Institute will prepare and publish, not later than 3 years after
    the date of the enactment of this Act, a report on the impact of
    language access services on the health and health care of limited
    English proficient populations.
        (b) Contents.--Such report shall include--
                (1) recommendations on the development and implementation
            of policies and practices by health care organizations and
            providers for limited English proficient patient populations;
                (2) a description of the effect of providing language
            access services on quality of health care and access to care
            and reduced medical error; and
                (3) a description of the costs associated with or savings
            related to provision of language access services.

    SEC. 1224. DEFINITIONS.

        In this subtitle:
                (1) Bilingual.--The term ``bilingual'' with respect to an
            individual means a person who has sufficient degree of
            proficiency in two languages and can ensure effective
            communication can occur in both languages.
                (2) Competent interpreter services.--The term ``competent
            interpreter services'' means a trans-language rendition of a
            spoken message in which the interpreter comprehends the source
            language and can speak comprehensively in the target language
            to convey the meaning intended in the source language. The
            interpreter knows health and health-related terminology and
            provides accurate interpretations by choosing equivalent
            expressions that convey the best matching and meaning to the
            source language and captures, to the greatest possible extent,
            all nuances intended in the source message.
                (3) Competent translation services.--The term ``competent
            translation services'' means a trans-language rendition of a
            written document in which the translator comprehends the source
            language and can write comprehensively in the target language
            to convey the meaning intended in the source language. The
            translator knows health and health-related terminology and
            provides accurate translations by choosing equivalent
            expressions that convey the best matching and meaning to the
            source language and captures, to the greatest possible extent,
            all nuances intended in the source document.
                (4) Effective communication.--The term ``effective
            communication'' means an exchange of information between the
            provider of health care or health care-related services and the
            limited English proficient recipient of such services that
            enables limited English proficient individuals to access,
            understand, and benefit from health care or health care-related
            services.
                (5) Interpreting/interpretation.--The terms
            ``interpreting'' and ``interpretation'' mean the transmission
            of a spoken message from one language into another, faithfully,
            accurately, and objectively.
                (6) Health care services.--The term ``health care
            services'' means services that address physical as well as
            mental health conditions in all care settings.
                (7) Health care-related services.--The term ``health care-
            related services'' means human or social services programs or
            activities that provide access, referrals or links to health
            care.
                (8) Language access.--The term ``language access'' means
            the provision of language services to an LEP individual
            designed to enhance that individual's access to, understanding
            of or benefit from health care or health care-related services.
                (9) Language services.--The term ``language services''
            means provision of health care services directly in a non-
            English language, interpretation, translation, and non-English
            signage.
                (10) Limited english proficient.--The term ``limited
            English proficient'' or ``LEP'' with respect to an individual
            means an individual who speaks a primary language other than
            English and who cannot speak, read, write or understand the
            English language at a level that permits the individual to
            effectively communicate with clinical or nonclinical staff at
            an entity providing health care or health care related
            services.
                (11) Medicare beneficiary.--The term ``Medicare
            beneficiary'' means an individual entitled to benefits under
            part A of title XVIII of the Social Security Act or enrolled
            under part B of such title.
                (12) Medicare program.--The term ``Medicare program'' means
            the programs under parts A through D of title XVIII of the
            Social Security Act.
                (13) Service provider.--The term ``service provider''
            includes all suppliers, providers of services, or entities
            under contract to provide coverage, items or services under any
            part of title XVIII of the Social Security Act.

                     Subtitle C--Miscellaneous Improvements

    SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.

        Section 1833(g)(5) of the Social Security Act (42 U.S.C.
    1395l(g)(5)), as amended by section 141 of the Medicare Improvements
    for Patients and Providers Act of 2008 (Public Law 110-275), is amended
    by striking ``December 31, 2009'' and inserting ``December 31, 2011''.

    SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS FOR
                  KIDNEY TRANSPLANT PATIENTS AND OTHER RENAL DIALYSIS
                  PROVISIONS.

        (a) Provision of Appropriate Coverage of Immunosuppressive Drugs
    Under the Medicare Program for Kidney Transplant Recipients.--
                (1) Continued entitlement to immunosuppressive drugs.--
                        (A) Kidney transplant recipients.--Section
                    226A(b)(2) of the Social Security Act (42 U.S.C. 426-
                    1(b)(2)) is amended by inserting ``(except for coverage
                    of immunosuppressive drugs under section
                    1861(s)(2)(J))'' before ``, with the thirty-sixth
                    month''.
                        (B) Application.--Section 1836 of such Act (42
                    U.S.C. 1395o) is amended--
                                (i) by striking ``Every individual who''
                            and inserting ``(a) In General.--Every
                            individual who''; and
                                (ii) by adding at the end the following new
                            subsection:
        ``(b) Special Rules Applicable to Individuals Only Eligible for
    Coverage of Immunosuppressive Drugs.--
                ``(1) In general.--In the case of an individual whose
            eligibility for benefits under this title has ended on or after
            January 1, 2012, except for the coverage of immunosuppressive
            drugs by reason of section 226A(b)(2), the following rules
            shall apply:
                        ``(A) The individual shall be deemed to be enrolled
                    under this part for purposes of receiving coverage of
                    such drugs.
                        ``(B) The individual shall be responsible for
                    providing for payment of the portion of the premium
                    under section 1839 which is not covered under the
                    Medicare savings program (as defined in section
                    1144(c)(7)) in order to receive such coverage.
                        ``(C) The provision of such drugs shall be subject
                    to the application of--
                                ``(i) the deductible under section 1833(b);
                            and
                                ``(ii) the coinsurance amount applicable
                            for such drugs (as determined under this part).
                        ``(D) If the individual is an inpatient of a
                    hospital or other entity, the individual is entitled to
                    receive coverage of such drugs under this part.
                ``(2) Establishment of procedures in order to implement
            coverage.--The Secretary shall establish procedures for--
                        ``(A) identifying individuals that are entitled to
                    coverage of immunosuppressive drugs by reason of
                    section 226A(b)(2); and
                        ``(B) distinguishing such individuals from
                    individuals that are enrolled under this part for the
                    complete package of benefits under this part.''.
                        (C) Technical amendment to correct duplicate
                    subsection designation.--Subsection (d) of section 226A
                    of such Act (42 U.S.C. 426-1), as added by section
                    201(a)(3)(D)(ii) of the Social Security Independence
                    and Program Improvements Act of 1994 (Public Law 103-
                    296; 108 Stat. 1497), is redesignated as subsection
                    (d).
                (2) Extension of secondary payer requirements for esrd
            beneficiaries.--Section 1862(b)(1)(C) of such Act (42 U.S.C.
            1395y(b)(1)(C)) is amended by adding at the end the following
            new sentence: ``With regard to immunosuppressive drugs
            furnished on or after the date of the enactment of the
            America's Affordable Health Choices Act of 2009, this
            subparagraph shall be applied without regard to any time
            limitation.''.
        (b) Medicare Coverage for ESRD Patients.--Section 1881 of such Act
    is further amended--
                (1) in subsection (b)(14)(B)(iii), by inserting ``,
            including oral drugs that are not the oral equivalent of an
            intravenous drug (such as oral phosphate binders and
            calcimimetics),'' after ``other drugs and biologicals'';
                (2) in subsection (b)(14)(E)(ii)--
                        (A) in the first sentence--
                                (i) by striking ``a one-time election to be
                            excluded from the phase-in'' and inserting ``an
                            election, with respect to 2011, 2012, or 2013,
                            to be excluded from the phase-in (or the
                            remainder of the phase-in)''; and
                                (ii) by adding at the end the following:
                            ``for such year and for each subsequent year
                            during the phase-in described in clause (i)'';
                            and
                        (B) in the second sentence--
                                (i) by striking ``January 1, 2011'' and
                            inserting ``the first date of such year''; and
                                (ii) by inserting ``and at a time'' after
                            ``form and manner''; and
                (3) in subsection (h)(4)(E), by striking ``lesser'' and
            inserting ``greater''.

    SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.

        (a) Medicare.--
                (1) In general.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x) is amended--
                        (A) in subsection (s)(2)--
                                (i) by striking ``and'' at the end of
                            subparagraph (DD);
                                (ii) by adding ``and'' at the end of
                            subparagraph (EE); and
                                (iii) by adding at the end the following
                            new subparagraph:
                ``(FF) advance care planning consultation (as defined in
            subsection (hhh)(1));''; and
                        (B) by adding at the end the following new
                    subsection:

                      ``Advance Care Planning Consultation

        ``(hhh)(1) Subject to paragraphs (3) and (4), the term `advance
    care planning consultation' means a consultation between the individual
    and a practitioner described in paragraph (2) regarding advance care
    planning, if, subject to paragraph (3), the individual involved has not
    had such a consultation within the last 5 years. Such consultation
    shall include the following:
                ``(A) An explanation by the practitioner of advance care
            planning, including key questions and considerations, important
            steps, and suggested people to talk to.
                ``(B) An explanation by the practitioner of advance
            directives, including living wills and durable powers of
            attorney, and their uses.
                ``(C) An explanation by the practitioner of the role and
            responsibilities of a health care proxy.
                ``(D) The provision by the practitioner of a list of
            national and State-specific resources to assist consumers and
            their families with advance care planning, including the
            national toll-free hotline, the advance care planning
            clearinghouses, and State legal service organizations
            (including those funded through the Older Americans Act of
            1965).
                ``(E) An explanation by the practitioner of the continuum
            of end-of-life services and supports available, including
            palliative care and hospice, and benefits for such services and
            supports that are available under this title.
                ``(F)(i) Subject to clause (ii), an explanation of orders
            regarding life sustaining treatment or similar orders, which
            shall include--
                        ``(I) the reasons why the development of such an
                    order is beneficial to the individual and the
                    individual's family and the reasons why such an order
                    should be updated periodically as the health of the
                    individual changes;
                        ``(II) the information needed for an individual or
                    legal surrogate to make informed decisions regarding
                    the completion of such an order; and
                        ``(III) the identification of resources that an
                    individual may use to determine the requirements of the
                    State in which such individual resides so that the
                    treatment wishes of that individual will be carried out
                    if the individual is unable to communicate those
                    wishes, including requirements regarding the
                    designation of a surrogate decisionmaker (also known as
                    a health care proxy).
                ``(ii) The Secretary shall limit the requirement for
            explanations under clause (i) to consultations furnished in a
            State--
                        ``(I) in which all legal barriers have been
                    addressed for enabling orders for life sustaining
                    treatment to constitute a set of medical orders
                    respected across all care settings; and
                        ``(II) that has in effect a program for orders for
                    life sustaining treatment described in clause (iii).
                ``(iii) A program for orders for life sustaining treatment
            for a States described in this clause is a program that--
                        ``(I) ensures such orders are standardized and
                    uniquely identifiable throughout the State;
                        ``(II) distributes or makes accessible such orders
                    to physicians and other health professionals that
                    (acting within the scope of the professional's
                    authority under State law) may sign orders for life
                    sustaining treatment;
                        ``(III) provides training for health care
                    professionals across the continuum of care about the
                    goals and use of orders for life sustaining treatment;
                    and
                        ``(IV) is guided by a coalition of stakeholders
                    includes representatives from emergency medical
                    services, emergency department physicians or nurses,
                    state long-term care association, state medical
                    association, state surveyors, agency responsible for
                    senior services, state department of health, state
                    hospital association, home health association, state
                    bar association, and state hospice association.
        ``(2) A practitioner described in this paragraph is--
                ``(A) a physician (as defined in subsection (r)(1)); and
                ``(B) a nurse practitioner or physician's assistant who has
            the authority under State law to sign orders for life
            sustaining treatments.
        ``(3)(A) An initial preventive physical examination under
    subsection (WW), including any related discussion during such
    examination, shall not be considered an advance care planning
    consultation for purposes of applying the 5-year limitation under
    paragraph (1).
        ``(B) An advance care planning consultation with respect to an
    individual may be conducted more frequently than provided under
    paragraph (1) if there is a significant change in the health condition
    of the individual, including diagnosis of a chronic, progressive, life-
    limiting disease, a life-threatening or terminal diagnosis or life-
    threatening injury, or upon admission to a skilled nursing facility, a
    long-term care facility (as defined by the Secretary), or a hospice
    program.
        ``(4) A consultation under this subsection may include the
    formulation of an order regarding life sustaining treatment or a
    similar order.
        ``(5)(A) For purposes of this section, the term `order regarding
    life sustaining treatment' means, with respect to an individual, an
    actionable medical order relating to the treatment of that individual
    that--
                ``(i) is signed and dated by a physician (as defined in
            subsection (r)(1)) or another health care professional (as
            specified by the Secretary and who is acting within the scope
            of the professional's authority under State law in signing such
            an order, including a nurse practitioner or physician
            assistant) and is in a form that permits it to stay with the
            individual and be followed by health care professionals and
            providers across the continuum of care;
                ``(ii) effectively communicates the individual's
            preferences regarding life sustaining treatment, including an
            indication of the treatment and care desired by the individual;
                ``(iii) is uniquely identifiable and standardized within a
            given locality, region, or State (as identified by the
            Secretary); and
                ``(iv) may incorporate any advance directive (as defined in
            section 1866(f)(3)) if executed by the individual.
        ``(B) The level of treatment indicated under subparagraph (A)(ii)
    may range from an indication for full treatment to an indication to
    limit some or all or specified interventions. Such indicated levels of
    treatment may include indications respecting, among other items--
                ``(i) the intensity of medical intervention if the patient
            is pulse less, apneic, or has serious cardiac or pulmonary
            problems;
                ``(ii) the individual's desire regarding transfer to a
            hospital or remaining at the current care setting;
                ``(iii) the use of antibiotics; and
                ``(iv) the use of artificially administered nutrition and
            hydration.''.
                (2) Payment.--Section 1848(j)(3) of such Act (42 U.S.C.
            1395w-4(j)(3)) is amended by inserting ``(2)(FF),'' after
            ``(2)(EE),''.
                (3) Frequency limitation.--Section 1862(a) of such Act (42
            U.S.C. 1395y(a)) is amended--
                        (A) in paragraph (1)--
                                (i) in subparagraph (N), by striking
                            ``and'' at the end;
                                (ii) in subparagraph (O) by striking the
                            semicolon at the end and inserting ``, and'';
                            and
                                (iii) by adding at the end the following
                            new subparagraph:
                        ``(P) in the case of advance care planning
                    consultations (as defined in section 1861(hhh)(1)),
                    which are performed more frequently than is covered
                    under such section;''; and
                        (B) in paragraph (7), by striking ``or (K)'' and
                    inserting ``(K), or (P)''.
                (4) Effective date.--The amendments made by this subsection
            shall apply to consultations furnished on or after January 1,
            2011.
        (b) Expansion of Physician Quality Reporting Initiative for End of
    Life Care.--
                (1) Physician's quality reporting initiative.--Section
            1848(k)(2) of the Social Security Act (42 U.S.C. 1395w-4(k)(2))
            is amended by adding at the end the following new paragraphs:
                ``(3) Physician's quality reporting initiative.--
                        ``(A) In general.--For purposes of reporting data
                    on quality measures for covered professional services
                    furnished during 2011 and any subsequent year, to the
                    extent that measures are available, the Secretary shall
                    include quality measures on end of life care and
                    advanced care planning that have been adopted or
                    endorsed by a consensus-based organization, if
                    appropriate. Such measures shall measure both the
                    creation of and adherence to orders for life-sustaining
                    treatment.
                        ``(B) Proposed set of measures.--The Secretary
                    shall publish in the Federal Register proposed quality
                    measures on end of life care and advanced care planning
                    that the Secretary determines are described in
                    subparagraph (A) and would be appropriate for eligible
                    professionals to use to submit data to the Secretary.
                    The Secretary shall provide for a period of public
                    comment on such set of measures before finalizing such
                    proposed measures.''.
        (c) Inclusion of Information in Medicare & You Handbook.--
                (1) Medicare & you handbook.--
                        (A) In general.--Not later than 1 year after the
                    date of the enactment of this Act, the Secretary of
                    Health and Human Services shall update the online
                    version of the Medicare & You Handbook to include the
                    following:
                                (i) An explanation of advance care planning
                            and advance directives, including--
                                        (I) living wills;
                                        (II) durable power of attorney;
                                        (III) orders of life-sustaining
                                    treatment; and
                                        (IV) health care proxies.
                                (ii) A description of Federal and State
                            resources available to assist individuals and
                            their families with advance care planning and
                            advance directives, including--
                                        (I) available State legal service
                                    organizations to assist individuals
                                    with advance care planning, including
                                    those organizations that receive
                                    funding pursuant to the Older Americans
                                    Act of 1965 (42 U.S.C. 93001 et seq.);
                                        (II) website links or addresses for
                                    State-specific advance directive forms;
                                    and
                                        (III) any additional information,
                                    as determined by the Secretary.
                        (B) Update of paper and subsequent versions.--The
                    Secretary shall include the information described in
                    subparagraph (A) in all paper and electronic versions
                    of the Medicare & You Handbook that are published on or
                    after the date that is 1 year after the date of the
                    enactment of this Act.

    SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND WAIVER OF LIMITED
                  ENROLLMENT PENALTY FOR TRICARE BENEFICIARIES.

        (a) Part B Special Enrollment Period.--
                (1) In general.--Section 1837 of the Social Security Act
            (42 U.S.C. 1395p) is amended by adding at the end the following
            new subsection:
        ``(l)(1) In the case of any individual who is a covered beneficiary
    (as defined in section 1072(5) of title 10, United States Code) at the
    time the individual is entitled to hospital insurance benefits under
    part A under section 226(b) or section 226A and who is eligible to
    enroll but who has elected not to enroll (or to be deemed enrolled)
    during the individual's initial enrollment period, there shall be a
    special enrollment period described in paragraph (2).
        ``(2) The special enrollment period described in this paragraph,
    with respect to an individual, is the 12-month period beginning on the
    day after the last day of the initial enrollment period of the
    individual or, if later, the 12-month period beginning with the month
    the individual is notified of enrollment under this section.
        ``(3) In the case of an individual who enrolls during the special
    enrollment period provided under paragraph (1), the coverage period
    under this part shall begin on the first day of the month in which the
    individual enrolls or, at the option of the individual, on the first
    day of the second month following the last month of the individual's
    initial enrollment period.
        ``(4) The Secretary of Defense shall establish a method for
    identifying individuals described in paragraph (1) and providing notice
    to them of their eligibility for enrollment during the special
    enrollment period described in paragraph (2).''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to elections made on or after the date of the
            enactment of this Act.
        (b) Waiver of Increase of Premium.--
                (1) In general.--Section 1839(b) of the Social Security Act
            (42 U.S.C. 1395r(b)) is amended by striking ``section
            1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of
            section 1837''.
                (2) Effective date.--
                        (A) In general.--The amendment made by paragraph
                    (1) shall apply with respect to elections made on or
                    after the date of the enactment of this Act.
                        (B) Rebates for certain disabled and esrd
                    beneficiaries.--
                                (i) In general.--With respect to premiums
                            for months on or after January 2005 and before
                            the month of the enactment of this Act, no
                            increase in the premium shall be effected for a
                            month in the case of any individual who is a
                            covered beneficiary (as defined in section
                            1072(5) of title 10, United States Code) at the
                            time the individual is entitled to hospital
                            insurance benefits under part A of title XVIII
                            of the Social Security Act under section 226(b)
                            or 226A of such Act, and who is eligible to
                            enroll, but who has elected not to enroll (or
                            to be deemed enrolled), during the individual's
                            initial enrollment period, and who enrolls
                            under this part within the 12-month period that
                            begins on the first day of the month after the
                            month of notification of entitlement under this
                            part.
                                (ii) Consultation with department of
                            defense.--The Secretary of Health and Human
                            Services shall consult with the Secretary of
                            Defense in identifying individuals described in
                            this paragraph.
                                (iii) Rebates.--The Secretary of Health and
                            Human Services shall establish a method for
                            providing rebates of premium increases paid for
                            months on or after January 1, 2005, and before
                            the month of the enactment of this Act for
                            which a penalty was applied and collected.

    SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX YEAR IN CASE OF GAINS
                  FROM SALE OF PRIMARY RESIDENCE IN COMPUTING PART B
                  INCOME-RELATED PREMIUM.

        (a) In General.--Section 1839(i)(4)(C)(ii)(II) of the Social
    Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) is amended by inserting
    ``sale of primary residence,'' after ``divorce of such individual,''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to premiums and payments for years beginning with 2011.

    SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PATIENT DECISIONS AIDS.

        (a) In General.--The Secretary of Health and Human Services shall
    establish a shared decision making demonstration program (in this
    subsection referred to as the ``program'') under the Medicare program
    using patient decision aids to meet the objective of improving the
    understanding by Medicare beneficiaries of their medical treatment
    options, as compared to comparable Medicare beneficiaries who do not
    participate in a shared decision making process using patient decision
    aids.
        (b) Sites.--
                (1) Enrollment.--The Secretary shall enroll in the program
            not more than 30 eligible providers who have experience in
            implementing, and have invested in the necessary infrastructure
            to implement, shared decision making using patient decision
            aids.
                (2) Application.--An eligible provider seeking to
            participate in the program shall submit to the Secretary an
            application at such time and containing such information as the
            Secretary may require.
                (3) Preference.--In enrolling eligible providers in the
            program, the Secretary shall give preference to eligible
            providers that--
                        (A) have documented experience in using patient
                    decision aids for the conditions identified by the
                    Secretary and in using shared decision making;
                        (B) have the necessary information technology
                    infrastructure to collect the information required by
                    the Secretary for reporting purposes; and
                        (C) are trained in how to use patient decision aids
                    and shared decision making.
        (c) Follow-up Counseling Visit.--
                (1) In general.--An eligible provider participating in the
            program shall routinely schedule Medicare beneficiaries for a
            counseling visit after the viewing of such a patient decision
            aid to answer any questions the beneficiary may have with
            respect to the medical care of the condition involved and to
            assist the beneficiary in thinking through how their
            preferences and concerns relate to their medical care.
                (2) Payment for follow-up counseling visit.--The Secretary
            shall establish procedures for making payments for such
            counseling visits provided to Medicare beneficiaries under the
            program. Such procedures shall provide for the establishment--
                        (A) of a code (or codes) to represent such
                    services; and
                        (B) of a single payment amount for such service
                    that includes the professional time of the health care
                    provider and a portion of the reasonable costs of the
                    infrastructure of the eligible provider such as would
                    be made under the applicable payment systems to that
                    provider for similar covered services.
        (d) Costs of Aids.--An eligible provider participating in the
    program shall be responsible for the costs of selecting, purchasing,
    and incorporating such patient decision aids into the provider's
    practice, and reporting data on quality and outcome measures under the
    program.
        (e) Funding.--The Secretary shall provide for the transfer from the
    Federal Supplementary Medical Insurance Trust Fund established under
    section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds
    as are necessary for the costs of carrying out the program.
        (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.
    and 1395 et seq.) as may be necessary for the purpose of carrying out
    the program.
        (g) Report.--Not later than 12 months after the date of completion
    of the program, the Secretary shall submit to Congress a report on such
    program, together with recommendations for such legislation and
    administrative action as the Secretary determines to be appropriate.
    The final report shall include an evaluation of the impact of the use
    of the program on health quality, utilization of health care services,
    and on improving the quality of life of such beneficiaries.
        (h) Definitions.--In this section:
                (1) Eligible provider.--The term ``eligible provider''
            means the following:
                        (A) A primary care practice.
                        (B) A specialty practice.
                        (C) A multispecialty group practice.
                        (D) A hospital.
                        (E) A rural health clinic.
                        (F) A federally qualified health center (as defined
                    in section 1861(aa)(4) of the Social Security Act (42
                    U.S.C. 1395x(aa)(4)).
                        (G) An integrated delivery system.
                        (H) A State cooperative entity that includes the
                    State government and at least one other health care
                    provider which is set up for the purpose of testing
                    shared decision making and patient decision aids.
                (2) Patient decision aid.--The term ``patient decision
            aid'' means an educational tool (such as the Internet, a video,
            or a pamphlet) that helps patients (or, if appropriate, the
            family caregiver of the patient) understand and communicate
            their beliefs and preferences related to their treatment
            options, and to decide with their health care provider what
            treatments are best for them based on their treatment options,
            scientific evidence, circumstances, beliefs, and preferences.
                (3) Shared decision making.--The term ``shared decision
            making'' means a collaborative process between patient and
            clinician that engages the patient in decision making, provides
            patients with information about trade-offs among treatment
            options, and facilitates the incorporation of patient
            preferences and values into the medical plan.

         TITLE K--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND
                                COORDINATED CARE

    SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

        Title XVIII of the Social Security Act is amended by inserting
    after section 1866C the following new section:

                 ``accountable care organization pilot program

        ``Sec. 1866D.  (a) In General.--The Secretary shall conduct a pilot
    program (in this section referred to as the `pilot program') to test
    different payment incentive models, including (to the extent
    practicable) the specific payment incentive models described in
    subsection (c), designed to reduce the growth of expenditures and
    improve health outcomes in the provision of items and services under
    this title to applicable beneficiaries (as defined in subsection (d))
    by qualifying accountable care organizations (as defined in subsection
    (b)(1)) in order to--
                ``(1) promote accountability for a patient population and
            coordinate items and services under parts A and B;
                ``(2) encourage investment in infrastructure and redesigned
            care processes for high quality and efficient service delivery;
            and
                ``(3) reward physician practices and other physician
            organizational models for the provision of high quality and
            efficient health care services.
        ``(b) Qualifying Accountable Care Organizations (ACOs).--
                ``(1) Qualifying aco defined.--In this section:
                        ``(A) In general.--The terms `qualifying
                    accountable care organization' and `qualifying ACO'
                    mean a group of physicians or other physician
                    organizational model (as defined in subparagraph (D))
                    that--
                                ``(i) is organized at least in part for the
                            purpose of providing physicians' services; and
                                ``(ii) meets such criteria as the Secretary
                            determines to be appropriate to participate in
                            the pilot program, including the criteria
                            specified in paragraph (2).
                        ``(B) Inclusion of other providers.--Nothing in
                    this subsection shall be construed as preventing a
                    qualifying ACO from including a hospital or any other
                    provider of services or supplier furnishing items or
                    services for which payment may be made under this title
                    that is affiliated with the ACO under an arrangement
                    structured so that such provider or supplier
                    participates in the pilot program and shares in any
                    incentive payments under the pilot program.
                        ``(C) Physician.--The term `physician' includes,
                    except as the Secretary may otherwise provide, any
                    individual who furnishes services for which payment may
                    be made as physicians' services.
                        ``(D) Other physician organizational model.--The
                    term `other physician organization model' means, with
                    respect to a qualifying ACO any model of organization
                    under which physicians enter into agreements with other
                    providers for the purposes of participation in the
                    pilot program in order to provide high quality and
                    efficient health care services and share in any
                    incentive payments under such program.
                        ``(E) Other services.--Nothing in this paragraph
                    shall be construed as preventing a qualifying ACO from
                    furnishing items or services, for which payment may not
                    be made under this title, for purposes of achieving
                    performance goals under the pilot program.
                ``(2) Qualifying criteria.--The following are criteria
            described in this paragraph for an organized group of
            physicians to be a qualifying ACO:
                        ``(A) The group has a legal structure that would
                    allow the group to receive and distribute incentive
                    payments under this section.
                        ``(B) The group includes a sufficient number of
                    primary care physicians for the applicable
                    beneficiaries for whose care the group is accountable
                    (as determined by the Secretary).
                        ``(C) The group reports on quality measures in such
                    form, manner, and frequency as specified by the
                    Secretary (which may be for the group, for providers of
                    services and suppliers, or both).
                        ``(D) The group reports to the Secretary (in a
                    form, manner and frequency as specified by the
                    Secretary) such data as the Secretary determines
                    appropriate to monitor and evaluate the pilot program.
                        ``(E) The group provides notice to applicable
                    beneficiaries regarding the pilot program (as
                    determined appropriate by the Secretary).
                        ``(F) The group contributes to a best practices
                    network or website, that shall be maintained by the
                    Secretary for the purpose of sharing strategies on
                    quality improvement, care coordination, and efficiency
                    that the groups believe are effective.
                        ``(G) The group utilizes patient-centered processes
                    of care, including those that emphasize patient and
                    caregiver involvement in planning and monitoring of
                    ongoing care management plan.
                        ``(H) The group meets other criteria determined to
                    be appropriate by the Secretary.
        ``(c) Specific Payment Incentive Models.--The specific payment
    incentive models described in this subsection are the following:
                ``(1) Performance target model.--Under the performance
            target model under this paragraph (in this paragraph referred
            to as the `performance target model'):
                        ``(A) In general.--A qualifying ACO qualifies to
                    receive an incentive payment if expenditures for
                    applicable beneficiaries are less than a target
                    spending level or a target rate of growth. The
                    incentive payment shall be made only if savings are
                    greater than would result from normal variation in
                    expenditures for items and services covered under parts
                    A and B.
                        ``(B) Computation of performance target.--
                                ``(i) In general.--The Secretary shall
                            establish a performance target for each
                            qualifying ACO comprised of a base amount
                            (described in clause (ii)) increased to the
                            current year by an adjustment factor (described
                            in clause (iii)). Such a target may be
                            established on a per capita basis, as the
                            Secretary determines to be appropriate.
                                ``(ii) Base amount.--For purposes of clause
                            (i), the base amount in this subparagraph is
                            equal to the average total payments (or allowed
                            charges) under parts A and B (and may include
                            part D, if the Secretary determines
                            appropriate) for applicable beneficiaries for
                            whom the qualifying ACO furnishes items and
                            services in a base period determined by the
                            Secretary. Such base amount may be determined
                            on a per capita basis.
                                ``(iii) Adjustment factor.--For purposes of
                            clause (i), the adjustment factor in this
                            clause may equal an annual per capita amount
                            that reflects changes in expenditures from the
                            period of the base amount to the current year
                            that would represent an appropriate performance
                            target for applicable beneficiaries (as
                            determined by the Secretary). Such adjustment
                            factor may be determined as an amount or rate,
                            may be determined on a national, regional,
                            local, or organization-specific basis, and may
                            be determined on a per capita basis. Such
                            adjustment factor also may be adjusted for risk
                            as determined appropriate by the Secretary.
                                ``(iv) Rebasing.--Under this model the
                            Secretary shall periodically rebase the base
                            expenditure amount described in clause (ii).
                        ``(C) Meeting target.--
                                ``(i) In general.--Subject to clause (ii),
                            a qualifying ACO that meet or exceeds annual
                            quality and performance targets for a year
                            shall receive an incentive payment for such
                            year equal to a portion (as determined
                            appropriate by the Secretary) of the amount by
                            which payments under this title for such year
                            relative are estimated to be below the
                            performance target for such year, as determined
                            by the Secretary. The Secretary may establish a
                            cap on incentive payments for a year for a
                            qualifying ACO.
                                ``(ii) Limitation.--The Secretary shall
                            limit incentive payments to each qualifying ACO
                            under this paragraph as necessary to ensure
                            that the aggregate expenditures with respect to
                            applicable beneficiaries for such ACOs under
                            this title (inclusive of incentive payments
                            described in this subparagraph) do not exceed
                            the amount that the Secretary estimates would
                            be expended for such ACO for such beneficiaries
                            if the pilot program under this section were
                            not implemented.
                        ``(D) Reporting and other requirements.--In
                    carrying out such model, the Secretary may (as the
                    Secretary determines to be appropriate) incorporate
                    reporting requirements, incentive payments, and
                    penalties related to the physician quality reporting
                    initiative (PQRI), electronic prescribing, electronic
                    health records, and other similar initiatives under
                    section 1848, and may use alternative criteria than
                    would otherwise apply under such section for
                    determining whether to make such payments. The
                    incentive payments described in this subparagraph shall
                    not be included in the limit described in subparagraph
                    (C)(ii) or in the performance target model described in
                    this paragraph.
                ``(2) Partial capitation model.--
                        ``(A) In general.--Subject to subparagraph (B), a
                    partial capitation model described in this paragraph
                    (in this paragraph referred to as a `partial capitation
                    model') is a model in which a qualifying ACO would be
                    at financial risk for some, but not all, of the items
                    and services covered under parts A and B, such as at
                    risk for some or all physicians' services or all items
                    and services under part B. The Secretary may limit a
                    partial capitation model to ACOs that are highly
                    integrated systems of care and to ACOs capable of
                    bearing risk, as determined to be appropriate by the
                    Secretary.
                        ``(B) No additional program expenditures.--Payments
                    to a qualifying ACO for applicable beneficiaries for a
                    year under the partial capitation model shall be
                    established in a manner that does not result in
                    spending more for such ACO for such beneficiaries than
                    would otherwise be expended for such ACO for such
                    beneficiaries for such year if the pilot program were
                    not implemented, as estimated by the Secretary.
                ``(3) Other payment models.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may develop other payment models that meet
                    the goals of this pilot program to improve quality and
                    efficiency.
                        ``(B) No additional program expenditures.--
                    Subparagraph (B) of paragraph (2) shall apply to a
                    payment model under subparagraph (A) in a similar
                    manner as such subparagraph (B) applies to the payment
                    model under paragraph (2).
        ``(d) Applicable Beneficiaries.--
                ``(1) In general.--In this section, the term `applicable
            beneficiary' means, with respect to a qualifying ACO, an
            individual who--
                        ``(A) is enrolled under part B and entitled to
                    benefits under part A;
                        ``(B) is not enrolled in a Medicare Advantage plan
                    under part C or a PACE program under section 1894; and
                        ``(C) meets such other criteria as the Secretary
                    determines appropriate, which may include criteria
                    relating to frequency of contact with physicians in the
                    ACO.
                ``(2) Following applicable beneficiaries.--The Secretary
            may monitor data on expenditures and quality of services under
            this title after an applicable beneficiary discontinues
            receiving services under this title through a qualifying ACO.
        ``(e) Implementation.--
                ``(1) Starting date.--The pilot program shall begin no
            later than January 1, 2012. An agreement with a qualifying ACO
            under the pilot program may cover a multi-year period of
            between 3 and 5 years.
                ``(2) Waiver.--The Secretary may waive such provisions of
            this title (including section 1877) and title XI in the manner
            the Secretary determines necessary in order implement the pilot
            program.
                ``(3) Performance results reports.--The Secretary shall
            report performance results to qualifying ACOs under the pilot
            program at least annually.
                ``(4) Limitations on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise of--
                        ``(A) the elements, parameters, scope, and duration
                    of the pilot program;
                        ``(B) the selection of qualifying ACOs for the
                    pilot program;
                        ``(C) the establishment of targets, measurement of
                    performance, determinations with respect to whether
                    savings have been achieved and the amount of savings;
                        ``(D) determinations regarding whether, to whom,
                    and in what amounts incentive payments are paid; and
                        ``(E) decisions about the extension of the program
                    under subsection (g), expansion of the program under
                    subsection (h) or extensions under subsection (i).
                ``(5) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
        ``(f) Evaluation; Monitoring.--
                ``(1) In general.--The Secretary shall evaluate the payment
            incentive model for each qualifying ACO under the pilot program
            to assess impacts on beneficiaries, providers of services,
            suppliers and the program under this title. The Secretary shall
            make such evaluation publicly available within 60 days of the
            date of completion of such report.
                ``(2) Monitoring.--The Inspector General of the Department
            of Health and Human Services shall provide for monitoring of
            the operation of ACOs under the pilot program with regard to
            violations of section 1877 (popularly known as the `Stark
            law').
        ``(g) Extension of Pilot Agreement With Successful Organizations.--
                ``(1) Reports to congress.--Not later than 2 years after
            the date the first agreement is entered into under this
            section, and biennially thereafter for six years, the Secretary
            shall submit to Congress and make publicly available a report
            on the use of authorities under the pilot program. Each report
            shall address the impact of the use of those authorities on
            expenditures, access, and quality under this title.
                ``(2) Extension.--Subject to the report provided under
            paragraph (1), with respect to a qualifying ACO, the Secretary
            may extend the duration of the agreement for such ACO under the
            pilot program as the Secretary determines appropriate if--
                        ``(A) the ACO receives incentive payments with
                    respect to any of the first 4 years of the pilot
                    agreement and is consistently meeting quality
                    standards; or
                        ``(B) the ACO is consistently exceeding quality
                    standards and is not increasing spending under the
                    program.
                ``(3) Termination.--The Secretary may terminate an
            agreement with a qualifying ACO under the pilot program if such
            ACO did not receive incentive payments or consistently failed
            to meet quality standards in any of the first 3 years under the
            program.
        ``(h) Expansion to Additional ACOs.--
                ``(1) Testing and refinement of payment incentive models.--
            Subject to the evaluation described in subsection (f), the
            Secretary may enter into agreements under the pilot program
            with additional qualifying ACOs to further test and refine
            payment incentive models with respect to qualifying ACOs.
                ``(2) Expanding use of successful models to program
            implementation.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    Secretary may issue regulations to implement, on a
                    permanent basis, 1 or more models if, and to the extent
                    that, such models are beneficial to the program under
                    this title, as determined by the Secretary.
                        ``(B) Certification.--The Chief Actuary of the
                    Centers for Medicare & Medicaid Services shall certify
                    that 1 or more of such models described in subparagraph
                    (A) would result in estimated spending that would be
                    less than what spending would otherwise be estimated to
                    be in the absence of such expansion.
        ``(i) Treatment of Physician Group Practice Demonstration.--
                ``(1) Extension.--The Secretary may enter in to an
            agreement with a qualifying ACO under the demonstration under
            section 1866A, subject to rebasing and other modifications
            deemed appropriate by the Secretary, until the pilot program
            under this section is operational.
                ``(2) Transition.--For purposes of extension of an
            agreement with a qualifying ACO under subsection (g)(2), the
            Secretary shall treat receipt of an incentive payment for a
            year by an organization under the physician group practice
            demonstration pursuant to section 1866A as a year for which an
            incentive payment is made under such subsection, as long as
            such practice group practice organization meets the criteria
            under subsection (b)(2).
        ``(j) Additional Provisions.--
                ``(1) Authority for separate incentive arrangements.--The
            Secretary may create separate incentive arrangements (including
            using multiple years of data, varying thresholds, varying
            shared savings amounts, and varying shared savings limits) for
            different categories of qualifying ACOs to reflect natural
            variations in data availability, variation in average annual
            attributable expenditures, program integrity, and other matters
            the Secretary deems appropriate.
                ``(2) Encouragement of participation of smaller
            organizations.--In order to encourage the participation of
            smaller accountable care organizations under the pilot program,
            the Secretary may limit a qualifying ACO's exposure to high
            cost patients under the program.
                ``(3) Involvement in private payer arrangements.--Nothing
            in this section shall be construed as preventing qualifying
            ACOs participating in the pilot program from negotiating
            similar contracts with private payers.
                ``(4) Antidiscrimination limitation.--The Secretary shall
            not enter into an agreement with an entity to provide health
            care items or services under the pilot program, or with an
            entity to administer the program, unless such entity guarantees
            that it will not deny, limit, or condition the coverage or
            provision of benefits under the program, for individuals
            eligible to be enrolled under such program, based on any health
            status-related factor described in section 2702(a)(1) of the
            Public Health Service Act.
                ``(5) Construction.--Nothing in this section shall be
            construed to compel or require an organization to use an
            organization-specific target growth rate for an accountable
            care organization under this section for purposes of section
            1848.
                ``(6) Funding.--For purposes of administering and carrying
            out the pilot program, other than for payments for items and
            services furnished under this title and incentive payments
            under subsection (c)(1), in addition to funds otherwise
            appropriated, there are appropriated to the Secretary for the
            Center for Medicare & Medicaid Services Program Management
            Account $25,000,000 for each of fiscal years 2010 through 2014
            and $20,000,000 for fiscal year 2015. Amounts appropriated
            under this paragraph for a fiscal year shall be available until
            expended.''.

    SEC. 1302. MEDICAL HOME PILOT PROGRAM.

        (a) In General.--Title XVIII of the Social Security Act is amended
    by inserting after section 1866D, as inserted by section 1301, the
    following new section:

                          ``medical home pilot program

        ``Sec. 1866E.  (a) Establishment and Medical Home Models.--
                ``(1) Establishment of pilot program.--The Secretary shall
            establish a medical home pilot program (in this section
            referred to as the `pilot program') for the purpose of
            evaluating the feasibility and advisability of reimbursing
            qualified patient-centered medical homes for furnishing medical
            home services (as defined under subsection (b)(1)) to high need
            beneficiaries (as defined in subsection (d)(1)(C)) and to
            targeted high need beneficiaries (as defined in subsection
            (c)(1)(C)).
                ``(2) Scope.--Subject to subsection (g), the pilot program
            shall include urban, rural, and underserved areas.
                ``(3) Models of medical homes in the pilot program.--The
            pilot program shall evaluate each of the following medical home
            models:
                        ``(A) Independent patient-centered medical home
                    model.--Independent patient-centered medical home model
                    under subsection (c).
                        ``(B) Community-based medical home model.--
                    Community-based medical home model under subsection
                    (d).
                ``(4) Participation of nurse practitioners and physician
            assistants.--
                        ``(A) Nothing in this section shall be construed as
                    preventing a nurse practitioner from leading a patient
                    centered medical home so long as--
                                ``(i) all the requirements of this section
                            are met; and
                                ``(ii) the nurse practitioner is acting
                            consistently with State law.
                        ``(B) Nothing in this section shall be construed as
                    preventing a physician assistant from participating in
                    a patient centered medical home so long as--
                                ``(i) all the requirements of this section
                            are met; and
                                ``(ii) the physician assistant is acting
                            consistently with State law.
        ``(b) Definitions.--For purposes of this section:
                ``(1) Patient-centered medical home services.--The term
            `patient-centered medical home services' means services that--
                        ``(A) provide beneficiaries with direct and ongoing
                    access to a primary care or principal care by a
                    physician or nurse practitioner who accepts
                    responsibility for providing first contact, continuous
                    and comprehensive care to such beneficiary;
                        ``(B) coordinate the care provided to a beneficiary
                    by a team of individuals at the practice level across
                    office, institutional and home settings led by a
                    primary care or principal care physician or nurse
                    practitioner, as needed and appropriate;
                        ``(C) provide for all the patient's health care
                    needs or take responsibility for appropriately
                    arranging care with other qualified providers for all
                    stages of life;
                        ``(D) provide continuous access to care and
                    communication with participating beneficiaries;
                        ``(E) provide support for patient self-management,
                    proactive and regular patient monitoring, support for
                    family caregivers, use patient-centered processes, and
                    coordination with community resources;
                        ``(F) integrate readily accessible, clinically
                    useful information on participating patients that
                    enables the practice to treat such patients
                    comprehensively and systematically; and
                        ``(G) implement evidence-based guidelines and apply
                    such guidelines to the identified needs of
                    beneficiaries over time and with the intensity needed
                    by such beneficiaries.
                ``(2) Primary care.--The term `primary care' means health
            care that is provided by a physician or nurse practitioner who
            practices in the field of family medicine, general internal
            medicine, geriatric medicine, or pediatric medicine.
                ``(3) Principal care.--The term `principal care' means
            integrated, accessible health care that is provided by a
            physician who is a medical subspecialist that addresses the
            majority of the personal health care needs of patients with
            chronic conditions requiring the subspecialist's expertise, and
            for whom the subspecialist assumes care management.
        ``(c) Independent Patient-Centered Medical Home Model.--
                ``(1) In general.--
                        ``(A) Payment authority.--Under the independent
                    patient-centered medical home model under this
                    subsection, the Secretary shall make payments for
                    medical home services furnished by an independent
                    patient-centered medical home (as defined in
                    subparagraph (B)) pursuant to paragraph (3)(B) for a
                    targeted high need beneficiaries (as defined in
                    subparagraph (C)).
                        ``(B) Independent patient-centered medical home
                    defined.--In this section, the term `independent
                    patient-centered medical home' means a physician-
                    directed or nurse-practitioner-directed practice that
                    is qualified under paragraph (2) as--
                                ``(i) providing beneficiaries with patient-
                            centered medical home services; and
                                ``(ii) meets such other requirements as the
                            Secretary may specify.
                        ``(C) Targeted high need beneficiary defined.--For
                    purposes of this subsection, the term `targeted high
                    need beneficiary' means a high need beneficiary who,
                    based on a risk score as specified by the Secretary, is
                    generally within the upper 50th percentile of Medicare
                    beneficiaries.
                        ``(D) Beneficiary election to participate.--The
                    Secretary shall determine an appropriate method of
                    ensuring that beneficiaries have agreed to participate
                    in the pilot program.
                        ``(E) Implementation.--The pilot program under this
                    subsection shall begin no later than 6 months after the
                    date of the enactment of this section.
                ``(2) standard setting and qualification process for
            patient-centered medical homes.--The Secretary shall review
            alternative models for standard setting and qualification, and
            shall establish a process--
                        ``(A) to establish standards to enable medical
                    practices to qualify as patient-centered medical homes;
                    and
                        ``(B) to initially provide for the review and
                    certification of medical practices as meeting such
                    standards.
                ``(3)  Payment.--
                        ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished by independent patient-
                    centered medical homes. Under such methodology, the
                    Secretary shall adjust payments to medical homes based
                    on beneficiary risk scores to ensure that higher
                    payments are made for higher risk beneficiaries.
                        ``(B) Per beneficiary per month payments.--Under
                    such payment methodology, the Secretary shall pay
                    independent patient-centered medical homes a monthly
                    fee for each targeted high need beneficiary who
                    consents to receive medical home services through such
                    medical home.
                        ``(C) Prospective payment.--The fee under
                    subparagraph (B) shall be paid on a prospective basis.
                        ``(D) Amount of payment.--In determining the amount
                    of such fee, the Secretary shall consider the
                    following:
                                ``(i) The clinical work and practice
                            expenses involved in providing the medical home
                            services provided by the independent patient-
                            centered medical home (such as providing
                            increased access, care coordination, population
                            disease management, and teaching self-care
                            skills for managing chronic illnesses) for
                            which payment is not made under this title as
                            of the date of the enactment of this section.
                                ``(ii) Allow for differential payments
                            based on capabilities of the independent
                            patient-centered medical home.
                                ``(iii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph in a
                            manner that ensures that higher payments are
                            made for higher risk beneficiaries.
                ``(4) Encouraging participation of variety of practices.--
            The pilot program under this subsection shall be designed to
            include the participation of physicians in practices with fewer
            than 10 full-time equivalent physicians, as well as physicians
            in larger practices, particularly in underserved and rural
            areas, as well as federally qualified community health centers,
            and rural health centers.
                ``(5) No duplication in pilot participation.--A physician
            in a group practice that participates in the accountable care
            organization pilot program under section 1866D shall not be
            eligible to participate in the pilot program under this
            subsection, unless the pilot program under this section has
            been implemented on a permanent basis under subsection (e)(3).
        ``(d) Community-Based Medical Home Model.--
                ``(1) In general.--
                        ``(A) Authority for payments.--Under the community-
                    based medical home model under this subsection (in this
                    section referred to as the `CBMH model'), the Secretary
                    shall make payments for the furnishing of medical home
                    services by a community-based medical home (as defined
                    in subparagraph (B)) pursuant to paragraph (5)(B) for
                    high need beneficiaries.
                        ``(B) Community-based medical home defined.--In
                    this section, the term `community-based medical home'
                    means a nonprofit community-based or State-based
                    organization that is certified under paragraph (2) as
                    meeting the following requirements:
                                ``(i) The organization provides
                            beneficiaries with medical home services.
                                ``(ii) The organization provides medical
                            home services under the supervision of and in
                            close collaboration with the primary care or
                            principal care physician or nurse practitioner
                            designated by the beneficiary as his or her
                            community-based medical home provider.
                                ``(iii) The organization employs community
                            health workers, including nurses or other non-
                            physician practitioners, lay health workers, or
                            other persons as determined appropriate by the
                            Secretary, that assist the primary or principal
                            care physician or nurse practitioner in chronic
                            care management activities such as teaching
                            self-care skills for managing chronic
                            illnesses, transitional care services, care
                            plan setting, medication therapy management
                            services for patients with multiple chronic
                            diseases, or help beneficiaries access the
                            health care and community-based resources in
                            their local geographic area.
                                ``(iv) The organization meets such other
                            requirements as the Secretary may specify.
                        ``(C) High need beneficiary.--In this section, the
                    term `high need beneficiary' means an individual who
                    requires regular medical monitoring, advising, or
                    treatment.
                ``(2) Qualification process for community-based medical
            homes.--The Secretary shall establish a process--
                        ``(A) for the initial qualification of community-
                    based or State-based organizations as community-based
                    medical homes; and
                        ``(B) to provide for the review and qualification
                    of such community-based and State-based organizations
                    pursuant to criteria established by the Secretary.
                ``(3) Duration.--The pilot program for community-based
            medical homes under this subsection shall start no later than 2
            years after the date of the enactment of this section. Each
            demonstration site under the pilot program shall operate for a
            period of up to 5 years after the initial implementation phase,
            without regard to the receipt of a initial implementation
            funding under subsection (i).
                ``(4) Preference.--In selecting sites for the CBMH model,
            the Secretary may give preference to--
                        ``(A) applications from geographic areas that
                    propose to coordinate health care services for
                    chronically ill beneficiaries across a variety of
                    health care settings, such as primary care physician
                    practices with fewer than 10 physicians, specialty
                    physicians, nurse practitioner practices, Federally
                    qualified health centers, rural health clinics, and
                    other settings;
                        ``(B) applications that include other payors that
                    furnish medical home services for chronically ill
                    patients covered by such payors; and
                        ``(C) applications from States that propose to use
                    the medical home model to coordinate health care
                    services for individuals enrolled under this title,
                    individuals enrolled under title XIX, and full-benefit
                    dual eligible individuals (as defined in section
                    1935(c)(6)) with chronic diseases across a variety of
                    health care settings.
                ``(5)  Payments.--
                        ``(A) Establishment of methodology.--The Secretary
                    shall establish a methodology for the payment for
                    medical home services furnished under the CBMH model.
                        ``(B) Per beneficiary per month payments.--Under
                    such payment methodology, the Secretary shall make two
                    separate monthly payments for each high need
                    beneficiary who consents to receive medical home
                    services through such medical home, as follows:
                                ``(i) Payment to community-based
                            organization.--One monthly payment to a
                            community-based or State-based organization.
                                ``(ii) Payment to primary or principal care
                            practice.--One monthly payment to the primary
                            or principal care practice for such
                            beneficiary.
                        ``(C) Prospective payment.--The payments under
                    subparagraph (B) shall be paid on a prospective basis.
                        ``(D) Amount of payment.--In determining the amount
                    of such payment, the Secretary shall consider the
                    following:
                                ``(i) The clinical work and practice
                            expenses involved in providing the medical home
                            services provided by the community-based
                            medical home (such as providing increased
                            access, care coordination, care plan setting,
                            population disease management, and teaching
                            self-care skills for managing chronic
                            illnesses) for which payment is not made under
                            this title as of the date of the enactment of
                            this section.
                                ``(ii) Use appropriate risk-adjustment in
                            determining the amount of the per beneficiary
                            per month payment under this paragraph.
                ``(6) Initial implementation funding.--The Secretary may
            make available initial implementation funding to a community
            based or State-based organization or a State that is
            participating in the pilot program under this subsection. Such
            organization shall provide the Secretary with a detailed
            implementation plan that includes how such funds will be used.
        ``(e) Expansion of Program.--
                ``(1) Evaluation of cost and quality.--The Secretary shall
            evaluate the pilot program to determine--
                        ``(A) the extent to which medical homes result in--
                                ``(i) improvement in the quality and
                            coordination of health care services,
                            particularly with regard to the care of complex
                            patients;
                                ``(ii) improvement in reducing health
                            disparities;
                                ``(iii) reductions in preventable
                            hospitalizations;
                                ``(iv) prevention of readmissions;
                                ``(v) reductions in emergency room visits;
                                ``(vi) improvement in health outcomes,
                            including patient functional status where
                            applicable;
                                ``(vii) improvement in patient
                            satisfaction;
                                ``(viii) improved efficiency of care such
                            as reducing duplicative diagnostic tests and
                            laboratory tests; and
                                ``(ix) reductions in health care
                            expenditures; and
                        ``(B) the feasability and advisability of
                    reimbursing medical homes for medical home services
                    under this title on a permanent basis.
                ``(2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under paragraph (1).
                ``(3) Expansion of program.--
                        ``(A) In general.--Subject to the results of the
                    evaluation under paragraph (1) and subparagraph (B),
                    the Secretary may issue regulations to implement, on a
                    permanent basis, one or more models, if, and to the
                    extent that such model or models, are beneficial to the
                    program under this title, including that such
                    implementation will improve quality of care, as
                    determined by the Secretary.
                        ``(B) Certification requirement.--The Secretary may
                    not issue such regulations unless the Chief Actuary of
                    the Centers for Medicare & Medicaid Services certifies
                    that the expansion of the components of the pilot
                    program described in subparagraph (A) would result in
                    estimated spending under this title that would be no
                    more than the level of spending that the Secretary
                    estimates would otherwise be spent under this title in
                    the absence of such expansion.
        ``(f) Administrative Provisions.--
                ``(1) No duplication in payments.--During any month, the
            Secretary may not make payments under this section under more
            than one model or through more than one medical home under any
            model for the furnishing of medical home services to an
            individual.
                ``(2) No effect on payment for evaluation and management
            services.--Payments made under this section are in addition to,
            and have no effect on the amount of, payment for evaluation and
            management services made under this title.
                ``(3) Administration.--Chapter 35 of title 44, United
            States Code shall not apply to this section.
        ``(g) Funding.--
                ``(1) Operational costs.--For purposes of administering and
            carrying out the pilot program (including the design,
            implementation, technical assistance for and evaluation of such
            program), in addition to funds otherwise available, there shall
            be transferred from the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 to the Secretary for the Centers
            for Medicare & Medicaid Services Program Management Account
            $6,000,000 for each of fiscal years 2010 through 2014. Amounts
            appropriated under this paragraph for a fiscal year shall be
            available until expended.
                ``(2) Patient-centered medical home services.--In addition
            to funds otherwise available, there shall be available to the
            Secretary for the Centers for Medicare & Medicaid Services,
            from the Federal Supplementary Medical Insurance Trust Fund
            under section 1841--
                        ``(A) $200,000,000 for each of fiscal years 2010
                    through 2014 for payments for medical home services
                    under subsection (c)(3); and
                        ``(B) $125,000,000 for each of fiscal years 2012
                    through 2016, for payments under subsection (d)(5).
            Amounts available under this paragraph for a fiscal year shall
            be available until expended.
                ``(3) Initial implementation.--In addition to funds
            otherwise available, there shall be available to the Secretary
            for the Centers for Medicare & Medicaid Services, from the
            Federal Supplementary Medical Insurance Trust Fund under
            section 1841, $2,500,000 for each of fiscal years 2010 through
            2012, under subsection (d)(6). Amounts available under this
            paragraph for a fiscal year shall be available until expended.
        ``(h) Treatment of TRHCA Medicare Medical Home Demonstration
    Funding.--
                ``(1) In addition to funds otherwise available for payment
            of medical home services under subsection (c)(3), there shall
            also be available the amount provided in subsection (g) of
            section 204 of division B of the Tax Relief and Health Care Act
            of 2006 (42 U.S.C. 1395b-1 note).
                ``(2) Notwithstanding section 1302(c) of the America's
            Affordable Health Choices Act of 2009, in addition to funds
            provided in paragraph (1) and subsection (g)(2)(A), the funding
            for medical home services that would otherwise have been
            available if such section 204 medical home demonstration had
            been implemented (without regard to subsection (g) of such
            section) shall be available to the independent patient-centered
            medical home model described in subsection (c).''.
        (b) Effective Date.--The amendment made by this section shall apply
    to services furnished on or after the date of the enactment of this
    Act.
        (c) Conforming Repeal.--Section 204 of division B of the Tax Relief
    and Health Care Act of 2006 (42 U.S.C. 1395b-1 note), as amended by
    section 133(a)(2) of the Medicare Improvements for Patients and
    Providers Act of 2008 (Public Law 110-275), is repealed.

    SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY CARE SERVICES.

        (a) In General.--Section 1833 of the Social Security Act is amended
    by inserting after subsection (o) the following new subsection:
        ``(p) Primary Care Payment Incentives.--
                ``(1) In general.--In the case of primary care services (as
            defined in paragraph (2)) furnished on or after January 1,
            2011, by a primary care practitioner (as defined in paragraph
            (3)) for which amounts are payable under section 1848, in
            addition to the amount otherwise paid under this part there
            shall also be paid to the practitioner (or to an employer or
            facility in the cases described in clause (A) of section
            1842(b)(6)) (on a monthly or quarterly basis) from the Federal
            Supplementary Medical Insurance Trust Fund an amount equal 5
            percent (or 10 percent if the practitioner predominately
            furnishes such services in an area that is designated (under
            section 332(a)(1)(A) of the Public Health Service Act) as a
            primary care health professional shortage area.
                ``(2) Primary care services defined.--In this subsection,
            the term `primary care services'--
                        ``(A) means services which are evaluation and
                    management services as defined in section
                    1848(j)(5)(A); and
                        ``(B) includes services furnished by another health
                    care professional that would be described in
                    subparagraph (A) if furnished by a physician.
                ``(3) Primary care practitioner defined.--In this
            subsection, the term `primary care practitioner'--
                        ``(A) means a physician or other health care
                    practitioner (including a nurse practitioner) who--
                                ``(i) specializes in family medicine,
                            general internal medicine, general pediatrics,
                            geriatrics, or obstetrics and gynecology; and
                                ``(ii) has allowed charges for primary care
                            services that account for at least 50 percent
                            of the physician's or practitioner's total
                            allowed charges under section 1848, as
                            determined by the Secretary for the most recent
                            period for which data are available; and
                        ``(B) includes a physician assistant who is under
                    the supervision of a practitioner described in
                    subparagraph (A).
                ``(4) Limitation on review.--There shall be no
            administrative or judicial review under section 1869, section
            1878, or otherwise, respecting--
                        ``(A) any determination or designation under this
                    subsection;
                        ``(B) the identification of services as primary
                    care services under this subsection; and
                        ``(C) the identification of a practitioner as a
                    primary care practitioner under this subsection.
                ``(5) Coordination with other payments.--
                        ``(A) With other primary care incentives.--The
                    provisions of this subsection shall not be taken into
                    account in applying subsections (m) and (u) and any
                    payment under such subsections shall not be taken into
                    account in computing payments under this subsection.
                        ``(B) With quality incentives.--Payments under this
                    subsection shall not be taken into account in
                    determining the amounts that would otherwise be paid
                    under this part for purposes of section
                    1834(g)(2)(B).''.
        (b) Conforming Amendments.--
                (1) Section 1833 of such Act (42 U.S.C. 1395l(m)) is
            amended by redesignating paragraph (4) as paragraph (5) and by
            inserting after paragraph (3) the following new paragraph:
        ``(4) The provisions of this subsection shall not be taken into
    account in applying subsections (m) or (u) and any payment under such
    subsections shall not be taken into account in computing payments under
    this subsection.''.
                (2) Section 1848(m)(5)(B) of such Act (42 U.S.C. 1395w-
            4(m)(5)(B)) is amended by inserting ``, (p),'' after ``(m)''.
                (3) Section 1848(o)(1)(B)(iv) of such Act (42 U.S.C. 1395w-
            4(o)(1)(B)(iv)) is amended by inserting ``primary care'' before
            ``health professional shortage area''.

    SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CERTIFIED NURSE-MIDWIVES.

        (a) In General.--Section 1833(a)(1)(K) of the Social Security Act
    (42 U.S.C.1395l(a)(1)(K)) is amended by striking ``(but in no event''
    and all that follows through ``performed by a physician)''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to services furnished on or after January 1, 2011.

    SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR PREVENTIVE SERVICES.

        (a) Medicare Covered Preventive Services Defined.--Section 1861 of
    the Social Security Act (42 U.S.C. 1395x), as amended by section
    1235(a)(2), is amended by adding at the end the following new
    subsection:

                     ``Medicare Covered Preventive Services

        ``(iii)(1) Subject to the succeeding provisions of this subsection,
    the term `Medicare covered preventive services' means the following:
                ``(A) Prostate cancer screening tests (as defined in
            subsection (oo)).
                ``(B) Colorectal cancer screening tests (as defined in
            subsection (pp) and when applicable as described in section
            1305).
                ``(C) Diabetes outpatient self-management training services
            (as defined in subsection (qq)).
                ``(D) Screening for glaucoma for certain individuals (as
            described in subsection (s)(2)(U)).
                ``(E) Medical nutrition therapy services for certain
            individuals (as described in subsection (s)(2)(V)).
                ``(F) An initial preventive physical examination (as
            defined in subsection (ww)).
                ``(G) Cardiovascular screening blood tests (as defined in
            subsection (xx)(1)).
                ``(H) Diabetes screening tests (as defined in subsection
            (yy)).
                ``(I) Ultrasound screening for abdominal aortic aneurysm
            for certain individuals (as described in described in
            subsection (s)(2)(AA)).
                ``(J) Pneumococcal and influenza vaccines and their
            administration (as described in subsection (s)(10)(A)) and
            hepatitis B vaccine and its administration for certain
            individuals (as described in subsection (s)(10)(B)).
                ``(K) Screening mammography (as defined in subsection
            (jj)).
                ``(L) Screening pap smear and screening pelvic exam (as
            defined in subsection (nn)).
                ``(M) Bone mass measurement (as defined in subsection
            (rr)).
                ``(N) Kidney disease education services (as defined in
            subsection (ggg)).
                ``(O) Additional preventive services (as defined in
            subsection (ddd)).
        ``(2) With respect to specific Medicare covered preventive
    services, the limitations and conditions described in the provisions
    referenced in paragraph (1) with respect to such services shall
    apply.''.
        (b) Payment and Elimination of Cost-sharing.--
                (1) In general.--
                        (A) In general.--Section 1833(a) of the Social
                    Security Act (42 U.S.C. 1395l(a)) is amended by adding
                    after and below paragraph (9) the following:
    ``With respect to Medicare covered preventive services, in any case in
    which the payment rate otherwise provided under this part is computed
    as a percent of less than 100 percent of an actual charge, fee schedule
    rate, or other rate, such percentage shall be increased to 100
    percent.''.
                        (B) Application to sigmoidoscopies and
                    colonoscopies.--Section 1834(d) of such Act (42 U.S.C.
                    1395m(d)) is amended--
                                (i) in paragraph (2)(C), by amending clause
                            (ii) to read as follows:
                                ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''; and
                                (ii) in paragraph (3)(C), by amending
                            clause (ii) to read as follows:
                                ``(ii) No coinsurance.--In the case of a
                            beneficiary who receives services described in
                            clause (i), there shall be no coinsurance
                            applied.''.
                (2) Elimination of coinsurance in outpatient hospital
            settings.--
                        (A) Exclusion from opd fee schedule.--Section
                    1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.
                    1395l(t)(1)(B)(iv)) is amended by striking ``screening
                    mammography (as defined in section 1861(jj)) and
                    diagnostic mammography'' and inserting ``diagnostic
                    mammograms and Medicare covered preventive services (as
                    defined in section 1861(iii)(1))''.
                        (B) Conforming amendments.--Section 1833(a)(2) of
                    the Social Security Act (42 U.S.C. 1395l(a)(2)) is
                    amended--
                                (i) in subparagraph (F), by striking
                            ``and'' after the semicolon at the end;
                                (ii) in subparagraph (G)(ii), by adding
                            ``and'' at the end; and
                                (iii) by adding at the end the following
                            new subparagraph:
                        ``(H) with respect to additional preventive
                    services (as defined in section 1861(ddd)) furnished by
                    an outpatient department of a hospital, the amount
                    determined under paragraph (1)(W);''.
                (3) Waiver of application of deductible for all preventive
            services.--The first sentence of section 1833(b) of the Social
            Security Act (42 U.S.C. 1395l(b)) is amended--
                        (A) in clause (1), by striking ``items and services
                    described in section 1861(s)(10)(A)'' and inserting
                    ``Medicare covered preventive services (as defined in
                    section 1861(iii))'';
                        (B) by inserting ``and'' before ``(4)''; and
                        (C) by striking clauses (5) through (8).
                (4) Application to providers of services.--Section
            1866(a)(2)(A)(ii) of such Act (42 U.S.C. 1395cc(a)(2)(A)(ii))
            is amended by inserting ``other than for Medicare covered
            preventive services and'' after ``for such items and services
            (''.
        (c) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2011.

    SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL CANCER SCREENING TESTS
                  REGARDLESS OF CODING, SUBSEQUENT DIAGNOSIS, OR ANCILLARY
                  TISSUE REMOVAL.

        (a) In General.--Section 1833(b) of the Social Security Act (42
    U.S.C. 1395l(b)), as amended by section 1305(b)(3), is amended by
    adding at the end the following new sentence: ``Clause (1) of the first
    sentence of this subsection shall apply with respect to a colorectal
    cancer screening test regardless of the code that is billed for the
    establishment of a diagnosis as a result of the test, or for the
    removal of tissue or other matter or other procedure that is furnished
    in connection with, as a result of, and in the same clinical encounter
    as, the screening test.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to items and services furnished on or after January 1, 2011.

    SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERVICES FROM COVERAGE
                  UNDER THE MEDICARE SKILLED NURSING FACILITY PROSPECTIVE
                  PAYMENT SYSTEM AND CONSOLIDATED PAYMENT.

        (a) In General.--Section 1888(e)(2)(A)(ii) of the Social Security
    Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``clinical
    social worker services,'' after ``qualified psychologist services,''.
        (b) Conforming Amendment.--Section 1861(hh)(2) of the Social
    Security Act (42 U.S.C. 1395x(hh)(2)) is amended by striking ``and
    other than services furnished to an inpatient of a skilled nursing
    facility which the facility is required to provide as a requirement for
    participation''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after July 1, 2010.

    SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND
                  MENTAL HEALTH COUNSELOR SERVICES.

        (a) Coverage of Marriage and Family Therapist Services.--
                (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as amended by section
            1235, is amended--
                        (A) in subparagraph (EE), by striking ``and'' at
                    the end;
                        (B) in subparagraph (FF), by adding ``and'' at the
                    end; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(GG) marriage and family therapist services (as
                    defined in subsection (jjj));''.
                (2) Definition.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x), as amended by sections 1235 and 1305, is
            amended by adding at the end the following new subsection:

                    ``Marriage and Family Therapist Services

        ``(jjj)(1) The term `marriage and family therapist services' means
    services performed by a marriage and family therapist (as defined in
    paragraph (2)) for the diagnosis and treatment of mental illnesses,
    which the marriage and family therapist is legally authorized to
    perform under State law (or the State regulatory mechanism provided by
    State law) of the State in which such services are performed, as would
    otherwise be covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or other
    provider charges or is paid any amounts with respect to the furnishing
    of such services.
        ``(2) The term `marriage and family therapist' means an individual
    who--
                ``(A) possesses a master's or doctoral degree which
            qualifies for licensure or certification as a marriage and
            family therapist pursuant to State law;
                ``(B) after obtaining such degree has performed at least 2
            years of clinical supervised experience in marriage and family
            therapy; and
                ``(C) is licensed or certified as a marriage and family
            therapist in the State in which marriage and family therapist
            services are performed.''.
                (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)) is amended by adding at the end the following
            new clause:
                                ``(v) marriage and family therapist
                            services;''.
                (4) Amount of payment.--
                        (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                                (i) by striking ``and'' before ``(W)''; and
                                (ii) by inserting before the semicolon at
                            the end the following: ``, and (X) with respect
                            to marriage and family therapist services under
                            section 1861(s)(2)(GG), the amounts paid shall
                            be 80 percent of the lesser of the actual
                            charge for the services or 75 percent of the
                            amount determined for payment of a psychologist
                            under clause (L)''.
                        (B) Development of criteria with respect to
                    consultation with a health care professional.--The
                    Secretary of Health and Human Services shall, taking
                    into consideration concerns for patient
                    confidentiality, develop criteria with respect to
                    payment for marriage and family therapist services for
                    which payment may be made directly to the marriage and
                    family therapist under part B of title XVIII of the
                    Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a therapist must agree to consult with a
                    patient's attending or primary care physician or nurse
                    practitioner in accordance with such criteria.
                (5) Exclusion of marriage and family therapist services
            from skilled nursing facility prospective payment system.--
            Section 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1307(a), is amended
            by inserting ``marriage and family therapist services (as
            defined in subsection (jjj)(1)),'' after ``clinical social
            worker services,''.
                (6) Coverage of marriage and family therapist services
            provided in rural health clinics and federally qualified health
            centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
            U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a
            clinical social worker (as defined in subsection (hh)(1)),''
            and inserting ``, by a clinical social worker (as defined in
            subsection (hh)(1)), or by a marriage and family therapist (as
            defined in subsection (jjj)(2)),''.
                (7) Inclusion of marriage and family therapists as
            practitioners for assignment of claims.--Section 1842(b)(18)(C)
            of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)) is
            amended by adding at the end the following new clause:
                ``(vii) A marriage and family therapist (as defined in
            section 1861(jjj)(2)).''.
        (b) Coverage of Mental Health Counselor Services.--
                (1) Coverage of services.--Section 1861(s)(2) of the Social
            Security Act (42 U.S.C. 1395x(s)(2)), as previously amended, is
            further amended--
                        (A) in subparagraph (FF), by striking ``and'' at
                    the end;
                        (B) in subparagraph (GG), by inserting ``and'' at
                    the end; and
                        (C) by adding at the end the following new
                    subparagraph:
                ``(HH) mental health counselor services (as defined in
            subsection (kkk)(1));''.
                (2) Definition.--Section 1861 of the Social Security Act
            (42 U.S.C. 1395x), as previously amended, is amended by adding
            at the end the following new subsection:

                       ``Mental Health Counselor Services

        ``(kkk)(1) The term `mental health counselor services' means
    services performed by a mental health counselor (as defined in
    paragraph (2)) for the diagnosis and treatment of mental illnesses
    which the mental health counselor is legally authorized to perform
    under State law (or the State regulatory mechanism provided by the
    State law) of the State in which such services are performed, as would
    otherwise be covered if furnished by a physician or as incident to a
    physician's professional service, but only if no facility or other
    provider charges or is paid any amounts with respect to the furnishing
    of such services.
        ``(2) The term `mental health counselor' means an individual who--
                ``(A) possesses a master's or doctor's degree which
            qualifies the individual for licensure or certification for the
            practice of mental health counseling in the State in which the
            services are performed;
                ``(B) after obtaining such a degree has performed at least
            2 years of supervised mental health counselor practice; and
                ``(C) is licensed or certified as a mental health counselor
            or professional counselor by the State in which the services
            are performed.''.
                (3) Provision for payment under part b.--Section
            1832(a)(2)(B) of the Social Security Act (42 U.S.C.
            1395k(a)(2)(B)), as amended by subsection (a)(3), is further
            amended--
                        (A) by striking ``and'' at the end of clause (iv);
                        (B) by adding ``and'' at the end of clause (v); and
                        (C) by adding at the end the following new clause:
                                ``(vi) mental health counselor services;''.
                (4) Amount of payment.--
                        (A) In general.--Section 1833(a)(1) of the Social
                    Security Act (42 U.S.C. 1395l(a)(1)), as amended by
                    subsection (a), is further amended--
                                (i) by striking ``and''before ``(X)''; and
                                (ii) by inserting before the semicolon at
                            the end the following: ``, and (Y), with
                            respect to mental health counselor services
                            under section 1861(s)(2)(HH), the amounts paid
                            shall be 80 percent of the lesser of the actual
                            charge for the services or 75 percent of the
                            amount determined for payment of a psychologist
                            under clause (L)''.
                        (B) Development of criteria with respect to
                    consultation with a physician.--The Secretary of Health
                    and Human Services shall, taking into consideration
                    concerns for patient confidentiality, develop criteria
                    with respect to payment for mental health counselor
                    services for which payment may be made directly to the
                    mental health counselor under part B of title XVIII of
                    the Social Security Act (42 U.S.C. 1395j et seq.) under
                    which such a counselor must agree to consult with a
                    patient's attending or primary care physician in
                    accordance with such criteria.
                (5) Exclusion of mental health counselor services from
            skilled nursing facility prospective payment system.--Section
            1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C.
            1395yy(e)(2)(A)(ii)), as amended by section 1307(a) and
            subsection (a), is amended by inserting ``mental health
            counselor services (as defined in section 1861(kkk)(1)),''
            after ``marriage and family therapist services (as defined in
            subsection (jjj)(1)),''.
                (6) Coverage of mental health counselor services provided
            in rural health clinics and federally qualified health
            centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
            U.S.C. 1395x(aa)(1)(B)), as amended by subsection (a), is
            amended by striking ``or by a marriage and family therapist (as
            defined in subsection (jjj)(2)),'' and inserting ``by a
            marriage and family therapist (as defined in subsection
            (jjj)(2)), or a mental health counselor (as defined in
            subsection (kkk)(2)),''.
                (7) Inclusion of mental health counselors as practitioners
            for assignment of claims.--Section 1842(b)(18)(C) of the Social
            Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by
            subsection (a)(7), is amended by adding at the end the
            following new clause:
                ``(viii) A mental health counselor (as defined in section
            1861(kkk)(2)).''.
        (c) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after January 1, 2011.

    SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

        Section 138(a)(1) of the Medicare Improvements for Patients and
    Providers Act of 2008 (Public Law 110-275) is amended by striking
    ``December 31, 2009'' and inserting ``December 31, 2011''.

    SEC. 1310. EXPANDING ACCESS TO VACCINES.

        (a) In General.--Paragraph (10) of section 1861(s) of the Social
    Security Act (42 U.S.C. 1395w(s)) is amended to read as follows:
                ``(10) federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration;''.
        (b) Federally Recommended Vaccines Defined.--Section 1861 of such
    Act is further amended by adding at the end the following new
    subsection:

                        ``Federally Recommended Vaccines

        ``(lll) The term `federally recommended vaccine' means an approved
    vaccine recommended by the Advisory Committee on Immunization Practices
    (an advisory committee established by the Secretary, acting through the
    Director of the Centers for Disease Control and Prevention).''.
        (c) Conforming Amendments.--
                (1) Section 1833 of such Act (42 U.S.C. 1395l) is amended,
            in each of subsections (a)(1)(B), (a)(2)(G), (a)(3)(A), and
            (b)(1) (as amended by section 1305(b)), by striking
            ``1861(s)(10)(A)'' or ``1861(s)(10)(B)'' and inserting
            ``1861(s)(10)'' each place it appears.
                (2) Section 1842(o)(1)(A)(iv) of such Act (42 U.S.C.
            1395u(o)(1)(A)(iv)) is amended--
                        (A) by striking ``subparagraph (A) or (B) of''; and
                        (B) by inserting before the period the following:
                    ``and before January 1, 2011, and influenza vaccines
                    furnished on or after January 1, 2011''.
                (3) Section 1847A(c)(6) of such Act (42 U.S.C. 1395w-
            3a(c)(6)) is amended by striking subparagraph (G) and inserting
            the following:
                        ``(G) Implementation.--Chapter 35 of title 44,
                    United States Code shall not apply to manufacturer
                    provision of information pursuant to section
                    1927(b)(3)(A)(iii) for purposes of implementation of
                    this section.''.
                (4) Section 1860D-2(e)(1)(B) of such Act (42 U.S.C. 1395w-
            102(e)(1)(B)) is amended by striking ``such term includes a
            vaccine'' and all that follows through ``its administration)
            and''.
                (5) Section 1861(ww)(2)(A) of such Act (42 U.S.C.
            1395x(ww)(2)(A))) is amended by striking ``Pneumococcal,
            influenza, and hepatitis B and administration'' and inserting
            ``Federally recommended vaccines (as defined in subsection
            (lll)) and their respective administration''.
                (6) Section 1861(iii)(1) of such Act, as added by section
            1305(a), is amended by amending subparagraph (J) to read as
            follows:
                ``(J) Federally recommended vaccines (as defined in
            subsection (lll)) and their respective administration.''.
                (7) Section 1927(b)(3)(A)(iii) of such Act (42 U.S.C.
            1396r-8(b)(3)(A)(iii)) is amended, in the matter following
            subclause (III), by inserting ``(A)(iv) (including influenza
            vaccines furnished on or after January 1, 2011),'' after
            ``described in subparagraph.''
        (d) Effective Dates.--The amendments made by--
                (1) this section (other than by subsection (c)(7)) shall
            apply to vaccines administered on or after January 1, 2011; and
                (2) by subsection (c)(7) shall apply to calendar quarters
            beginning on or after January 1, 2010.

                                TITLE L--QUALITY

                 Subtitle A--Comparative Effectiveness Research

    SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.

        (a) In General.--title XI of the Social Security Act is amended by
    adding at the end the following new part:

                  ``Part D--Comparative Effectiveness Research

                      ``comparative effectiveness research

        ``Sec. 1181.  (a) Center for Comparative Effectiveness Research
    Established.--
                ``(1) In general.--The Secretary shall establish within the
            Agency for Healthcare Research and Quality a Center for
            Comparative Effectiveness Research (in this section referred to
            as the `Center') to conduct, support, and synthesize research
            (including research conducted or supported under section 1013
            of the Medicare Prescription Drug, Improvement, and
            Modernization Act of 2003) with respect to the outcomes,
            effectiveness, and appropriateness of health care services and
            procedures in order to identify the manner in which diseases,
            disorders, and other health conditions can most effectively and
            appropriately be prevented, diagnosed, treated, and managed
            clinically.
                ``(2) Duties.--The Center shall--
                        ``(A) conduct, support, and synthesize research
                    relevant to the comparative effectiveness of the full
                    spectrum of health care items, services and systems,
                    including pharmaceuticals, medical devices, medical and
                    surgical procedures, and other medical interventions;
                        ``(B) conduct and support systematic reviews of
                    clinical research, including original research
                    conducted subsequent to the date of the enactment of
                    this section;
                        ``(C) continuously develop rigorous scientific
                    methodologies for conducting comparative effectiveness
                    studies, and use such methodologies appropriately;
                        ``(D) submit to the Comparative Effectiveness
                    Research Commission, the Secretary, and Congress
                    appropriate relevant reports described in subsection
                    (d)(2); and
                        ``(E) encourage, as appropriate, the development
                    and use of clinical registries and the development of
                    clinical effectiveness research data networks from
                    electronic health records, post marketing drug and
                    medical device surveillance efforts, and other forms of
                    electronic health data.
                ``(3) Powers.--
                        ``(A) Obtaining official data.--The Center may
                    secure directly from any department or agency of the
                    United States information necessary to enable it to
                    carry out this section. Upon request of the Center, the
                    head of that department or agency shall furnish that
                    information to the Center on an agreed upon schedule.
                        ``(B) Data collection.--In order to carry out its
                    functions, the Center shall--
                                ``(i) utilize existing information, both
                            published and unpublished, where possible,
                            collected and assessed either by its own staff
                            or under other arrangements made in accordance
                            with this section,
                                ``(ii) carry out, or award grants or
                            contracts for, original research and
                            experimentation, where existing information is
                            inadequate, and
                                ``(iii) adopt procedures allowing any
                            interested party to submit information for the
                            use by the Center and Commission under
                            subsection (b) in making reports and
                            recommendations.
                        ``(C) Access of gao to information.--The
                    Comptroller General shall have unrestricted access to
                    all deliberations, records, and nonproprietary data of
                    the Center and Commission under subsection (b),
                    immediately upon request.
                        ``(D) Periodic audit.--The Center and Commission
                    under subsection (b) shall be subject to periodic audit
                    by the Comptroller General.
        ``(b) Oversight by Comparative Effectiveness Research Commission.--
                ``(1) In general.--The Secretary shall establish an
            independent Comparative Effectiveness Research Commission (in
            this section referred to as the `Commission') to oversee and
            evaluate the activities carried out by the Center under
            subsection (a), subject to the authority of the Secretary, to
            ensure such activities result in highly credible research and
            information resulting from such research.
                ``(2) Duties.--The Commission shall--
                        ``(A) determine national priorities for research
                    described in subsection (a) and in making such
                    determinations consult with a broad array of public and
                    private stakeholders, including patients and health
                    care providers and payers;
                        ``(B) monitor the appropriateness of use of the
                    CERTF described in subsection (g) with respect to the
                    timely production of comparative effectiveness research
                    determined to be a national priority under subparagraph
                    (A);
                        ``(C) identify highly credible research methods and
                    standards of evidence for such research to be
                    considered by the Center;
                        ``(D) review the methodologies developed by the
                    center under subsection (a)(2)(C);
                        ``(E) not later than one year after the date of the
                    enactment of this section, enter into an arrangement
                    under which the Institute of Medicine of the National
                    Academy of Sciences shall conduct an evaluation and
                    report on standards of evidence for such research;
                        ``(F) support forums to increase stakeholder
                    awareness and permit stakeholder feedback on the
                    efforts of the Center to advance methods and standards
                    that promote highly credible research;
                        ``(G) make recommendations for policies that would
                    allow for public access of data produced under this
                    section, in accordance with appropriate privacy and
                    proprietary practices, while ensuring that the
                    information produced through such data is timely and
                    credible;
                        ``(H) appoint a clinical perspective advisory panel
                    for each research priority determined under
                    subparagraph (A), which shall consult with patients and
                    advise the Center on research questions, methods, and
                    evidence gaps in terms of clinical outcomes for the
                    specific research inquiry to be examined with respect
                    to such priority to ensure that the information
                    produced from such research is clinically relevant to
                    decisions made by clinicians and patients at the point
                    of care;
                        ``(I) make recommendations for the priority for
                    periodic reviews of previous comparative effectiveness
                    research and studies conducted by the Center under
                    subsection (a);
                        ``(J) routinely review processes of the Center with
                    respect to such research to confirm that the
                    information produced by such research is objective,
                    credible, consistent with standards of evidence
                    established under this section, and developed through a
                    transparent process that includes consultations with
                    appropriate stakeholders; and
                        ``(K) make recommendations to the center for the
                    broad dissemination of the findings of research
                    conducted and supported under this section that enables
                    clinicians, patients, consumers, and payers to make
                    more informed health care decisions that improve
                    quality and value.
                ``(3) Composition of commission.--
                        ``(A) In general.--The members of the Commission
                    shall consist of--
                                ``(i) the Director of the Agency for
                            Healthcare Research and Quality;
                                ``(ii) the Chief Medical Officer of the
                            Centers for Medicare & Medicaid Services; and
                                ``(iii) 15 additional members who shall
                            represent broad constituencies of stakeholders
                            including clinicians, patients, researchers,
                            third-party payers, consumers of Federal and
                            State beneficiary programs.
                    Of such members, at least 9 shall be practicing
                    physicians, health care practitioners, consumers, or
                    patients.
                        ``(B) Qualifications.--
                                ``(i) Diverse representation of
                            perspectives.--The members of the Commission
                            shall represent a broad range of perspectives
                            and shall collectively have experience in the
                            following areas:
                                        ``(I) Epidemiology.
                                        ``(II) Health services research.
                                        ``(III) Bioethics.
                                        ``(IV) Decision sciences.
                                        ``(V) Health disparities.
                                        ``(VI) Economics.
                                ``(ii) Diverse representation of health
                            care community.--At least one member shall
                            represent each of the following health care
                            communities:
                                        ``(I) Patients.
                                        ``(II) Health care consumers.
                                        ``(III) Practicing Physicians,
                                    including surgeons.
                                        ``(IV) Other health care
                                    practitioners engaged in clinical care.
                                        ``(V) Employers.
                                        ``(VI) Public payers.
                                        ``(VII) Insurance plans.
                                        ``(VIII) Clinical researchers who
                                    conduct research on behalf of
                                    pharmaceutical or device manufacturers.
                        ``(C) Limitation.--No more than 3 of the Members of
                    the Commission may be representatives of pharmaceutical
                    or device manufacturers and such representatives shall
                    be clinical researchers described under subparagraph
                    (B)(ii)(VIII).
                ``(4) Appointment.--
                        ``(A) In general.--The Secretary shall appoint the
                    members of the Commission.
                        ``(B) Consultation.--In considering candidates for
                    appointment to the Commission, the Secretary may
                    consult with the Government Accountability Office and
                    the Institute of Medicine of the National Academy of
                    Sciences.
                ``(5) Chairman; vice chairman.--The Secretary shall
            designate a member of the Commission, at the time of
            appointment of the member, as Chairman and a member as Vice
            Chairman for that term of appointment, except that in the case
            of vacancy of the Chairmanship or Vice Chairmanship, the
            Secretary may designate another member for the remainder of
            that member's term. The Chairman shall serve as an ex officio
            member of the National Advisory Council of the Agency for
            Health Care Research and Quality under section 931(c)(3)(B) of
            the Public Health Service Act.
                ``(6) Terms.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), each member of the Commission shall
                    be appointed for a term of 4 years.
                        ``(B) Terms of initial appointees.--Of the members
                    first appointed--
                                ``(i) 8 shall be appointed for a term of 4
                            years; and
                                ``(ii) 7 shall be appointed for a term of 3
                            years.
                ``(7) Coordination.--To enhance effectiveness and
            coordination, the Secretary is encouraged, to the greatest
            extent possible, to seek coordination between the Commission
            and the National Advisory Council of the Agency for Healthcare
            Research and Quality.
                ``(8) Conflicts of interest.--
                        ``(A) In general.--In appointing the members of the
                    Commission or a clinical perspective advisory panel
                    described in paragraph (2)(H), the Secretary or the
                    Commission, respectively, shall take into consideration
                    any financial interest (as defined in subparagraph
                    (D)), consistent with this paragraph, and develop a
                    plan for managing any identified conflicts.
                        ``(B) Evaluation and criteria.--When considering an
                    appointment to the Commission or a clinical perspective
                    advisory panel described paragraph (2)(H) the Secretary
                    or the Commission shall review the expertise of the
                    individual and the financial disclosure report filed by
                    the individual pursuant to the Ethics in Government Act
                    of 1978 for each individual under consideration for the
                    appointment, so as to reduce the likelihood that an
                    appointed individual will later require a written
                    determination as referred to in section 208(b)(1) of
                    title 18, United States Code, a written certification
                    as referred to in section 208(b)(3) of title 18, United
                    States Code, or a waiver as referred to in subparagraph
                    (D)(iii) for service on the Commission at a meeting of
                    the Commission.
                        ``(C) Disclosures; prohibitions on participation;
                    waivers.--
                                ``(i) Disclosure of financial interest.--
                            Prior to a meeting of the Commission or a
                            clinical perspective advisory panel described
                            in paragraph (2)(H) regarding a `particular
                            matter' (as that term is used in section 208 of
                            title 18, United States Code), each member of
                            the Commission or the clinical perspective
                            advisory panel who is a full-time Government
                            employee or special Government employee shall
                            disclose to the Secretary financial interests
                            in accordance with subsection (b) of such
                            section 208.
                                ``(ii) Prohibitions on participation.--
                            Except as provided under clause (iii), a member
                            of the Commission or a clinical perspective
                            advisory panel described in paragraph (2)(H)
                            may not participate with respect to a
                            particular matter considered in meeting of the
                            Commission or the clinical perspective advisory
                            panel if such member (or an immediate family
                            member of such member) has a financial interest
                            that could be affected by the advice given to
                            the Secretary with respect to such matter,
                            excluding interests exempted in regulations
                            issued by the Director of the Office of
                            Government Ethics as too remote or
                            inconsequential to affect the integrity of the
                            services of the Government officers or
                            employees to which such regulations apply.
                                ``(iii) Waiver.--If the Secretary
                            determines it necessary to afford the
                            Commission or a clinical perspective advisory
                            panel described in paragraph 2(H) essential
                            expertise, the Secretary may grant a waiver of
                            the prohibition in clause (ii) to permit a
                            member described in such subparagraph to--
                                        ``(I) participate as a non-voting
                                    member with respect to a particular
                                    matter considered in a Commission or a
                                    clinical perspective advisory panel
                                    meeting; or
                                        ``(II) participate as a voting
                                    member with respect to a particular
                                    matter considered in a Commission or a
                                    clinical perspective advisory panel
                                    meeting.
                                ``(iv) Limitation on waivers and other
                            exceptions.--
                                        ``(I) Determination of allowable
                                    exceptions for the commission.--The
                                    number of waivers granted to members of
                                    the Commission cannot exceed one-half
                                    of the total number of members for the
                                    Commission.
                                        ``(II) Prohibition on voting status
                                    on clinical perspective advisory
                                    panels.--No voting member of any
                                    clinical perspective advisory panel
                                    shall be in receipt of a waiver. No
                                    more than two nonvoting members of any
                                    clinical perspective advisory panel
                                    shall receive a waiver.
                        ``(D) Financial interest defined.--For purposes of
                    this paragraph, the term `financial interest' means a
                    financial interest under section 208(a) of title 18,
                    United States Code.
                ``(9) Compensation.--While serving on the business of the
            Commission (including travel time), a member of the Commission
            shall be entitled to compensation at the per diem equivalent of
            the rate provided for level IV of the Executive Schedule under
            section 5315 of title 5, United States Code; and while so
            serving away from home and the member's regular place of
            business, a member may be allowed travel expenses, as
            authorized by the Director of the Commission.
                ``(10) Availability of reports.--The Commission shall
            transmit to the Secretary a copy of each report submitted under
            this subsection and shall make such reports available to the
            public.
                ``(11) Director and staff; experts and consultants.--
            Subject to such review as the Secretary deems necessary to
            assure the efficient administration of the Commission, the
            Commission may--
                        ``(A) appoint an Executive Director (subject to the
                    approval of the Secretary) and such other personnel as
                    Federal employees under section 2105 of title 5, United
                    States Code, as may be necessary to carry out its
                    duties (without regard to the provisions of title 5,
                    United States Code, governing appointments in the
                    competitive service);
                        ``(B) seek such assistance and support as may be
                    required in the performance of its duties from
                    appropriate Federal departments and agencies;
                        ``(C) enter into contracts or make other
                    arrangements, as may be necessary for the conduct of
                    the work of the Commission (without regard to section
                    3709 of the Revised Statutes (41 U.S.C. 5));
                        ``(D) make advance, progress, and other payments
                    which relate to the work of the Commission;
                        ``(E) provide transportation and subsistence for
                    persons serving without compensation; and
                        ``(F) prescribe such rules and regulations as it
                    deems necessary with respect to the internal
                    organization and operation of the Commission.
        ``(c) Research Requirements.--Any research conducted, supported, or
    synthesized under this section shall meet the following requirements:
                ``(1) Ensuring transparency, credibility, and access.--
                        ``(A) The establishment of the agenda and conduct
                    of the research shall be insulated from inappropriate
                    political or stakeholder influence.
                        ``(B) Methods of conducting such research shall be
                    scientifically based.
                        ``(C) All aspects of the prioritization of
                    research, conduct of the research, and development of
                    conclusions based on the research shall be transparent
                    to all stakeholders.
                        ``(D) The process and methods for conducting such
                    research shall be publicly documented and available to
                    all stakeholders.
                        ``(E) Throughout the process of such research, the
                    Center shall provide opportunities for all stakeholders
                    involved to review and provide public comment on the
                    methods and findings of such research.
                ``(2) Use of clinical perspective advisory panels.--The
            research shall meet a national research priority determined
            under subsection (b)(2)(A) and shall consider advice given to
            the Center by the clinical perspective advisory panel for the
            national research priority.
                ``(3) Stakeholder input.--
                        ``(A) In general.--The Commission shall consult
                    with patients, health care providers, health care
                    consumer representatives, and other appropriate
                    stakeholders with an interest in the research through a
                    transparent process recommended by the Commission.
                        ``(B) Specific areas of consultation.--Consultation
                    shall include where deemed appropriate by the
                    Commission--
                                ``(i) recommending research priorities and
                            questions;
                                ``(ii) recommending research methodologies;
                            and
                                ``(iii) advising on and assisting with
                            efforts to disseminate research findings.
                        ``(C) Ombudsman.--The Secretary shall designate a
                    patient ombudsman. The ombudsman shall--
                                ``(i) serve as an available point of
                            contact for any patients with an interest in
                            proposed comparative effectiveness studies by
                            the Center; and
                                ``(ii) ensure that any comments from
                            patients regarding proposed comparative
                            effectiveness studies are reviewed by the
                            Commission.
                ``(4) Taking into account potential differences.--Research
            shall--
                        ``(A) be designed, as appropriate, to take into
                    account the potential for differences in the
                    effectiveness of health care items and services used
                    with various subpopulations such as racial and ethnic
                    minorities, women, different age groups (including
                    children, adolescents, adults, and seniors), and
                    individuals with different comorbidities; and
                        ``(B) seek, as feasible and appropriate, to include
                    members of such subpopulations as subjects in the
                    research.
        ``(d) Public Access to Comparative Effectiveness Information.--
                ``(1) In general.--Not later than 90 days after receipt by
            the Center or Commission, as applicable, of a relevant report
            described in paragraph (2) made by the Center, Commission, or
            clinical perspective advisory panel under this section,
            appropriate information contained in such report shall be
            posted on the official public Internet site of the Center and
            of the Commission, as applicable.
                ``(2) Relevant reports described.--For purposes of this
            section, a relevant report is each of the following submitted
            by the Center or a grantee or contractor of the Center:
                        ``(A) Any interim or progress reports as deemed
                    appropriate by the Secretary.
                        ``(B) Stakeholder comments.
                        ``(C) A final report.
        ``(e) Dissemination and Incorporation of Comparative Effectiveness
    Information.--
                ``(1) Dissemination.--The Center shall provide for the
            dissemination of appropriate findings produced by research
            supported, conducted, or synthesized under this section to
            health care providers, patients, vendors of health information
            technology focused on clinical decision support, appropriate
            professional associations, and Federal and private health
            plans, and other relevant stakeholders. In disseminating such
            findings the Center shall--
                        ``(A) convey findings of research so that they are
                    comprehensible and useful to patients and providers in
                    making health care decisions;
                        ``(B) discuss findings and other considerations
                    specific to certain sub-populations, risk factors, and
                    comorbidities as appropriate;
                        ``(C) include considerations such as limitations of
                    research and what further research may be needed, as
                    appropriate;
                        ``(D) not include any data that the dissemination
                    of which would violate the privacy of research
                    participants or violate any confidentiality agreements
                    made with respect to the use of data under this
                    section; and
                        ``(E) assist the users of health information
                    technology focused on clinical decision support to
                    promote the timely incorporation of such findings into
                    clinical practices and promote the ease of use of such
                    incorporation.
                ``(2) Dissemination protocols and strategies.--The Center
            shall develop protocols and strategies for the appropriate
            dissemination of research findings in order to ensure effective
            communication of findings and the use and incorporation of such
            findings into relevant activities for the purpose of informing
            higher quality and more effective and efficient decisions
            regarding medical items and services. In developing and
            adopting such protocols and strategies, the Center shall
            consult with stakeholders concerning the types of dissemination
            that will be most useful to the end users of information and
            may provide for the utilization of multiple formats for
            conveying findings to different audiences, including
            dissemination to individuals with limited English proficiency.
        ``(f) Reports to Congress.--
                ``(1) Annual reports.--Beginning not later than one year
            after the date of the enactment of this section, the Director
            of the Agency of Healthcare Research and Quality and the
            Commission shall submit to Congress an annual report on the
            activities of the Center and the Commission, as well as the
            research, conducted under this section. Each such report shall
            include a discussion of the Center's compliance with subsection
            (c)(B)(4), including any reasons for lack of compliance with
            such subsection.
                ``(2) Recommendation for fair share per capita amount for
            all-payer financing.--Beginning not later than December 31,
            2011, the Secretary shall submit to Congress an annual
            recommendation for a fair share per capita amount described in
            subsection (c)(1) of section 9511 of the Internal Revenue Code
            of 1986 for purposes of funding the CERTF under such section.
                ``(3) Analysis and review.--Not later than December 31,
            2013, the Secretary, in consultation with the Commission, shall
            submit to Congress a report on all activities conducted or
            supported under this section as of such date. Such report shall
            include an evaluation of the overall costs of such activities
            and an analysis of the backlog of any research proposals
            approved by the Commission but not funded.
        ``(g) Funding of Comparative Effectiveness Research.--For fiscal
    year 2010 and each subsequent fiscal year, amounts in the Comparative
    Effectiveness Research Trust Fund (referred to in this section as the
    `CERTF') under section 9511 of the Internal Revenue Code of 1986 shall
    be available, without the need for further appropriations and without
    fiscal year limitation, to the Secretary to carry out this section.
        ``(h) Construction.--Nothing in this section shall be construed to
    permit the Commission or the Center to mandate coverage, reimbursement,
    or other policies for any public or private payer.''.
        (b) Comparative Effectiveness Research Trust Fund; Financing for
    the Trust Fund.--For provision establishing a Comparative Effectiveness
    Research Trust Fund and financing such Trust Fund, see section 1802.

                     Subtitle B--Nursing Home Transparency

       PART 1--IMPROVING TRANSPARENCY OF INFORMATION ON SKILLED NURSING
                       FACILITIES AND NURSING FACILITIES

    SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE
                  PARTIES INFORMATION.

        (a) In General.--Section 1124 of the Social Security Act (42 U.S.C.
    1320a-3) is amended by adding at the end the following new subsection:
        ``(c) Required Disclosure of Ownership and Additional Disclosable
    Parties Information.--
                ``(1) Disclosure.--A facility (as defined in paragraph
            (7)(B)) shall have the information described in paragraph (3)
            available--
                        ``(A) during the period beginning on the date of
                    the enactment of this subsection and ending on the date
                    such information is made available to the public under
                    section 1411(b) of the America's Affordable Health
                    Choices Act of 2009, for submission to the Secretary,
                    the Inspector General of the Department of Health and
                    Human Services, the State in which the facility is
                    located, and the State long-term care ombudsman in the
                    case where the Secretary, the Inspector General, the
                    State, or the State long-term care ombudsman requests
                    such information; and
                        ``(B) beginning on the effective date of the final
                    regulations promulgated under paragraph (4)(A), for
                    reporting such information in accordance with such
                    final regulations.
            Nothing in subparagraph (A) shall be construed as authorizing a
            facility to dispose of or delete information described in such
            subparagraph after the effective date of the final regulations
            promulgated under paragraph (4)(A).
                ``(2) Public availability of information.--During the
            period described in paragraph (1)(A), a facility shall--
                        ``(A) make the information described in paragraph
                    (3) available to the public upon request and update
                    such information as may be necessary to reflect changes
                    in such information; and
                        ``(B) post a notice of the availability of such
                    information in the lobby of the facility in a prominent
                    manner.
                ``(3) Information described.--
                        ``(A) In general.--The following information is
                    described in this paragraph:
                                ``(i) The information described in
                            subsections (a) and (b), subject to
                            subparagraph (C).
                                ``(ii) The identity of and information on--
                                        ``(I) each member of the governing
                                    body of the facility, including the
                                    name, title, and period of service of
                                    each such member;
                                        ``(II) each person or entity who is
                                    an officer, director, member, partner,
                                    trustee, or managing employee of the
                                    facility, including the name, title,
                                    and date of start of service of each
                                    such person or entity; and
                                        ``(III) each person or entity who
                                    is an additional disclosable party of
                                    the facility.
                                ``(iii) The organizational structure of
                            each person and entity described in subclauses
                            (II) and (III) of clause (ii) and a description
                            of the relationship of each such person or
                            entity to the facility and to one another.
                        ``(B) Special rule where information is already
                    reported or submitted.--To the extent that information
                    reported by a facility to the Internal Revenue Service
                    on Form 990, information submitted by a facility to the
                    Securities and Exchange Commission, or information
                    otherwise submitted to the Secretary or any other
                    Federal agency contains the information described in
                    clauses (i), (ii), or (iii) of subparagraph (A), the
                    Secretary may allow, to the extent practicable, such
                    Form or such information to meet the requirements of
                    paragraph (1) and to be submitted in a manner specified
                    by the Secretary.
                        ``(C) Special rule.--In applying subparagraph
                    (A)(i)--
                                ``(i) with respect to subsections (a) and
                            (b), `ownership or control interest' shall
                            include direct or indirect interests, including
                            such interests in intermediate entities; and
                                ``(ii) subsection (a)(3)(A)(ii) shall
                            include the owner of a whole or part interest
                            in any mortgage, deed of trust, note, or other
                            obligation secured, in whole or in part, by the
                            entity or any of the property or assets
                            thereof, if the interest is equal to or exceeds
                            5 percent of the total property or assets of
                            the entirety.
                ``(4) Reporting.--
                        ``(A) In general.--Not later than the date that is
                    2 years after the date of the enactment of this
                    subsection, the Secretary shall promulgate regulations
                    requiring, effective on the date that is 90 days after
                    the date on which such final regulations are published
                    in the Federal Register, a facility to report the
                    information described in paragraph (3) to the Secretary
                    in a standardized format, and such other regulations as
                    are necessary to carry out this subsection. Such final
                    regulations shall ensure that the facility certifies,
                    as a condition of participation and payment under the
                    program under title XVIII or XIX, that the information
                    reported by the facility in accordance with such final
                    regulations is accurate and current.
                        ``(B) Guidance.--The Secretary shall provide
                    guidance and technical assistance to States on how to
                    adopt the standardized format under subparagraph (A).
                ``(5) No effect on existing reporting requirements.--
            Nothing in this subsection shall reduce, diminish, or alter any
            reporting requirement for a facility that is in effect as of
            the date of the enactment of this subsection.
                ``(6) Definitions.--In this subsection:
                        ``(A) Additional disclosable party.--The term
                    `additional disclosable party' means, with respect to a
                    facility, any person or entity who--
                                ``(i) exercises operational, financial, or
                            managerial control over the facility or a part
                            thereof, or provides policies or procedures for
                            any of the operations of the facility, or
                            provides financial or cash management services
                            to the facility;
                                ``(ii) leases or subleases real property to
                            the facility, or owns a whole or part interest
                            equal to or exceeding 5 percent of the total
                            value of such real property;
                                ``(iii) lends funds or provides a financial
                            guarantee to the facility in an amount which is
                            equal to or exceeds $50,000; or
                                ``(iv) provides management or
                            administrative services, clinical consulting
                            services, or accounting or financial services
                            to the facility.
                        ``(B) Facility.--The term `facility' means a
                    disclosing entity which is--
                                ``(i) a skilled nursing facility (as
                            defined in section 1819(a)); or
                                ``(ii) a nursing facility (as defined in
                            section 1919(a)).
                        ``(C) Managing employee.--The term `managing
                    employee' means, with respect to a facility, an
                    individual (including a general manager, business
                    manager, administrator, director, or consultant) who
                    directly or indirectly manages, advises, or supervises
                    any element of the practices, finances, or operations
                    of the facility.
                        ``(D) Organizational structure.--The term
                    `organizational structure' means, in the case of--
                                ``(i) a corporation, the officers,
                            directors, and shareholders of the corporation
                            who have an ownership interest in the
                            corporation which is equal to or exceeds 5
                            percent;
                                ``(ii) a limited liability company, the
                            members and managers of the limited liability
                            company (including, as applicable, what
                            percentage each member and manager has of the
                            ownership interest in the limited liability
                            company);
                                ``(iii) a general partnership, the partners
                            of the general partnership;
                                ``(iv) a limited partnership, the general
                            partners and any limited partners of the
                            limited partnership who have an ownership
                            interest in the limited partnership which is
                            equal to or exceeds 10 percent;
                                ``(v) a trust, the trustees of the trust;
                                ``(vi) an individual, contact information
                            for the individual; and
                                ``(vii) any other person or entity, such
                            information as the Secretary determines
                            appropriate.''.
        (b) Public Availability of Information.--
                (1) In general.--Not later than the date that is 1 year
            after the date on which the final regulations promulgated under
            section 1124(c)(4)(A) of the Social Security Act, as added by
            subsection (a), are published in the Federal Register, the
            information reported in accordance with such final regulations
            shall be made available to the public in accordance with
            procedures established by the Secretary.
                (2) Definitions.--In this subsection:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395i-3(a)).
        (c) Conforming Amendments.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by
            striking subparagraph (B) and redesignating subparagraph (C) as
            subparagraph (B).
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking
            subparagraph (B) and redesignating subparagraph (C) as
            subparagraph (B).

    SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

        (a) Effective Compliance and Ethics Programs.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by
            section 1411(c)(1), is amended by adding at the end the
            following new subparagraph:
                        ``(C) Compliance and ethics programs.--
                                ``(i) Requirement.--On or after the date
                            that is 36 months after the date of the
                            enactment of this subparagraph, a skilled
                            nursing facility shall, with respect to the
                            entity that operates the facility (in this
                            subparagraph referred to as the `operating
                            organization' or `organization'), have in
                            operation a compliance and ethics program that
                            is effective in preventing and detecting
                            criminal, civil, and administrative violations
                            under this Act and in promoting quality of care
                            consistent with regulations developed under
                            clause (ii).
                                ``(ii) Development of regulations.--
                                        ``(I) In general.--Not later than
                                    the date that is 2 years after such
                                    date of the enactment, the Secretary,
                                    in consultation with the Inspector
                                    General of the Department of Health and
                                    Human Services, shall promulgate
                                    regulations for an effective compliance
                                    and ethics program for operating
                                    organizations, which may include a
                                    model compliance program.
                                        ``(II) Design of regulations.--Such
                                    regulations with respect to specific
                                    elements or formality of a program may
                                    vary with the size of the organization,
                                    such that larger organizations should
                                    have a more formal and rigorous program
                                    and include established written
                                    policies defining the standards and
                                    procedures to be followed by its
                                    employees. Such requirements shall
                                    specifically apply to the corporate
                                    level management of multi-unit nursing
                                    home chains.
                                        ``(III) Evaluation.--Not later than
                                    3 years after the date of promulgation
                                    of regulations under this clause, the
                                    Secretary shall complete an evaluation
                                    of the compliance and ethics programs
                                    required to be established under this
                                    subparagraph. Such evaluation shall
                                    determine if such programs led to
                                    changes in deficiency citations,
                                    changes in quality performance, or
                                    changes in other metrics of resident
                                    quality of care. The Secretary shall
                                    submit to Congress a report on such
                                    evaluation and shall include in such
                                    report such recommendations regarding
                                    changes in the requirements for such
                                    programs as the Secretary determines
                                    appropriate.
                                ``(iii) Requirements for compliance and
                            ethics programs.--In this subparagraph, the
                            term `compliance and ethics program' means,
                            with respect to a skilled nursing facility, a
                            program of the operating organization that--
                                        ``(I) has been reasonably designed,
                                    implemented, and enforced so that it
                                    generally will be effective in
                                    preventing and detecting criminal,
                                    civil, and administrative violations
                                    under this Act and in promoting quality
                                    of care; and
                                        ``(II) includes at least the
                                    required components specified in clause
                                    (iv).
                                ``(iv) Required components of program.--The
                            required components of a compliance and ethics
                            program of an organization are the following:
                                        ``(I) The organization must have
                                    established compliance standards and
                                    procedures to be followed by its
                                    employees, contractors, and other
                                    agents that are reasonably capable of
                                    reducing the prospect of criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(II) Specific individuals within
                                    high-level personnel of the
                                    organization must have been assigned
                                    overall responsibility to oversee
                                    compliance with such standards and
                                    procedures and have sufficient
                                    resources and authority to assure such
                                    compliance.
                                        ``(III) The organization must have
                                    used due care not to delegate
                                    substantial discretionary authority to
                                    individuals whom the organization knew,
                                    or should have known through the
                                    exercise of due diligence, had a
                                    propensity to engage in criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(IV) The organization must have
                                    taken steps to communicate effectively
                                    its standards and procedures to all
                                    employees and other agents, such as by
                                    requiring participation in training
                                    programs or by disseminating
                                    publications that explain in a
                                    practical manner what is required.
                                        ``(V) The organization must have
                                    taken reasonable steps to achieve
                                    compliance with its standards, such as
                                    by utilizing monitoring and auditing
                                    systems reasonably designed to detect
                                    criminal, civil, and administrative
                                    violations under this Act by its
                                    employees and other agents and by
                                    having in place and publicizing a
                                    reporting system whereby employees and
                                    other agents could report violations by
                                    others within the organization without
                                    fear of retribution.
                                        ``(VI) The standards must have been
                                    consistently enforced through
                                    appropriate disciplinary mechanisms,
                                    including, as appropriate, discipline
                                    of individuals responsible for the
                                    failure to detect an offense.
                                        ``(VII) After an offense has been
                                    detected, the organization must have
                                    taken all reasonable steps to respond
                                    appropriately to the offense and to
                                    prevent further similar offenses,
                                    including repayment of any funds to
                                    which it was not entitled and any
                                    necessary modification to its program
                                    to prevent and detect criminal, civil,
                                    and administrative violations under
                                    this Act.
                                        ``(VIII) The organization must
                                    periodically undertake reassessment of
                                    its compliance program to identify
                                    changes necessary to reflect changes
                                    within the organization and its
                                    facilities.
                                ``(v) Coordination.--The provisions of this
                            subparagraph shall apply with respect to a
                            skilled nursing facility in lieu of section
                            1874(d).''.
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)), as amended by section
            1411(c)(2), is amended by adding at the end the following new
            subparagraph:
                        ``(C) Compliance and ethics program.--
                                ``(i) Requirement.--On or after the date
                            that is 36 months after the date of the
                            enactment of this subparagraph, a nursing
                            facility shall, with respect to the entity that
                            operates the facility (in this subparagraph
                            referred to as the `operating organization' or
                            `organization'), have in operation a compliance
                            and ethics program that is effective in
                            preventing and detecting criminal, civil, and
                            administrative violations under this Act and in
                            promoting quality of care consistent with
                            regulations developed under clause (ii).
                                ``(ii) Development of regulations.--
                                        ``(I) In general.--Not later than
                                    the date that is 2 years after such
                                    date of the enactment, the Secretary,
                                    in consultation with the Inspector
                                    General of the Department of Health and
                                    Human Services, shall develop
                                    regulations for an effective compliance
                                    and ethics program for operating
                                    organizations, which may include a
                                    model compliance program.
                                        ``(II) Design of regulations.--Such
                                    regulations with respect to specific
                                    elements or formality of a program may
                                    vary with the size of the organization,
                                    such that larger organizations should
                                    have a more formal and rigorous program
                                    and include established written
                                    policies defining the standards and
                                    procedures to be followed by its
                                    employees. Such requirements may
                                    specifically apply to the corporate
                                    level management of multi-unit nursing
                                    home chains.
                                        ``(III) Evaluation.--Not later than
                                    3 years after the date of promulgation
                                    of regulations under this clause the
                                    Secretary shall complete an evaluation
                                    of the compliance and ethics programs
                                    required to be established under this
                                    subparagraph. Such evaluation shall
                                    determine if such programs led to
                                    changes in deficiency citations,
                                    changes in quality performance, or
                                    changes in other metrics of resident
                                    quality of care. The Secretary shall
                                    submit to Congress a report on such
                                    evaluation and shall include in such
                                    report such recommendations regarding
                                    changes in the requirements for such
                                    programs as the Secretary determines
                                    appropriate.
                                ``(iii) Requirements for compliance and
                            ethics programs.--In this subparagraph, the
                            term `compliance and ethics program' means,
                            with respect to a nursing facility, a program
                            of the operating organization that--
                                        ``(I) has been reasonably designed,
                                    implemented, and enforced so that it
                                    generally will be effective in
                                    preventing and detecting criminal,
                                    civil, and administrative violations
                                    under this Act and in promoting quality
                                    of care; and
                                        ``(II) includes at least the
                                    required components specified in clause
                                    (iv).
                                ``(iv) Required components of program.--The
                            required components of a compliance and ethics
                            program of an organization are the following:
                                        ``(I) The organization must have
                                    established compliance standards and
                                    procedures to be followed by its
                                    employees and other agents that are
                                    reasonably capable of reducing the
                                    prospect of criminal, civil, and
                                    administrative violations under this
                                    Act.
                                        ``(II) Specific individuals within
                                    high-level personnel of the
                                    organization must have been assigned
                                    overall responsibility to oversee
                                    compliance with such standards and
                                    procedures and has sufficient resources
                                    and authority to assure such
                                    compliance.
                                        ``(III) The organization must have
                                    used due care not to delegate
                                    substantial discretionary authority to
                                    individuals whom the organization knew,
                                    or should have known through the
                                    exercise of due diligence, had a
                                    propensity to engage in criminal,
                                    civil, and administrative violations
                                    under this Act.
                                        ``(IV) The organization must have
                                    taken steps to communicate effectively
                                    its standards and procedures to all
                                    employees and other agents, such as by
                                    requiring participation in training
                                    programs or by disseminating
                                    publications that explain in a
                                    practical manner what is required.
                                        ``(V) The organization must have
                                    taken reasonable steps to achieve
                                    compliance with its standards, such as
                                    by utilizing monitoring and auditing
                                    systems reasonably designed to detect
                                    criminal, civil, and administrative
                                    violations under this Act by its
                                    employees and other agents and by
                                    having in place and publicizing a
                                    reporting system whereby employees and
                                    other agents could report violations by
                                    others within the organization without
                                    fear of retribution.
                                        ``(VI) The standards must have been
                                    consistently enforced through
                                    appropriate disciplinary mechanisms,
                                    including, as appropriate, discipline
                                    of individuals responsible for the
                                    failure to detect an offense.
                                        ``(VII) After an offense has been
                                    detected, the organization must have
                                    taken all reasonable steps to respond
                                    appropriately to the offense and to
                                    prevent further similar offenses,
                                    including repayment of any funds to
                                    which it was not entitled and any
                                    necessary modification to its program
                                    to prevent and detect criminal, civil,
                                    and administrative violations under
                                    this Act.
                                        ``(VIII) The organization must
                                    periodically undertake reassessment of
                                    its compliance program to identify
                                    changes necessary to reflect changes
                                    within the organization and its
                                    facilities.
                                ``(v) Coordination.--The provisions of this
                            subparagraph shall apply with respect to a
                            nursing facility in lieu of section
                            1902(a)(77).''.
        (b) Quality Assurance and Performance Improvement Program.--
                (1) Skilled nursing facilities.--Section 1819(b)(1)(B) of
            the Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                        (A) by striking ``assurance'' and inserting
                    ``assurance and quality assurance and performance
                    improvement program'';
                        (B) by designating the matter beginning with ``A
                    nursing facility'' as a clause (i) with the heading
                    ``In general.--'' and the appropriate indentation; and
                        (C) by adding at the end the following new clause:
                                ``(ii) Quality assurance and performance
                            improvement program.--
                                        ``(I) In general.--Not later than
                                    December 31, 2011, the Secretary shall
                                    establish and implement a quality
                                    assurance and performance improvement
                                    program (in this clause referred to as
                                    the `QAPI program') for skilled nursing
                                    facilities, including multi-unit chains
                                    of such facilities. Under the QAPI
                                    program, the Secretary shall establish
                                    standards relating to such facilities
                                    and provide technical assistance to
                                    such facilities on the development of
                                    best practices in order to meet such
                                    standards. Not later than 1 year after
                                    the date on which the regulations are
                                    promulgated under subclause (II), a
                                    skilled nursing facility must submit to
                                    the Secretary a plan for the facility
                                    to meet such standards and implement
                                    such best practices, including how to
                                    coordinate the implementation of such
                                    plan with quality assessment and
                                    assurance activities conducted under
                                    clause (i).
                                        ``(II) Regulations.--The Secretary
                                    shall promulgate regulations to carry
                                    out this clause.''.
                (2) Nursing facilities.--Section 1919(b)(1)(B) of the
            Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                        (A) by striking ``assurance'' and inserting
                    ``assurance and quality assurance and performance
                    improvement program'';
                        (B) by designating the matter beginning with ``A
                    nursing facility'' as a clause (i) with the heading
                    ``In general.--'' and the appropriate indentation; and
                        (C) by adding at the end the following new clause:
                                ``(ii) Quality assurance and performance
                            improvement program.--
                                        ``(I) In general.--Not later than
                                    December 31, 2011, the Secretary shall
                                    establish and implement a quality
                                    assurance and performance improvement
                                    program (in this clause referred to as
                                    the `QAPI program') for nursing
                                    facilities, including multi-unit chains
                                    of such facilities. Under the QAPI
                                    program, the Secretary shall establish
                                    standards relating to such facilities
                                    and provide technical assistance to
                                    such facilities on the development of
                                    best practices in order to meet such
                                    standards. Not later than 1 year after
                                    the date on which the regulations are
                                    promulgated under subclause (II), a
                                    nursing facility must submit to the
                                    Secretary a plan for the facility to
                                    meet such standards and implement such
                                    best practices, including how to
                                    coordinate the implementation of such
                                    plan with quality assessment and
                                    assurance activities conducted under
                                    clause (i).
                                        ``(II) Regulations.--The Secretary
                                    shall promulgate regulations to carry
                                    out this clause.''.
                (3) Proposal to revise quality assurance and performance
            improvement programs.--The Secretary shall include in the
            proposed rule published under section 1888(e) of the Social
            Security Act (42 U.S.C. 1395yy(e)(5)(A)) for the subsequent
            fiscal year to the extent otherwise authorized under section
            1819(b)(1)(B) or 1819(d)(1)(C) of the Social Security Act or
            other statutory or regulatory authority, one or more proposals
            for skilled nursing facilities to modify and strengthen quality
            assurance and performance improvement programs in such
            facilities. At the time of publication of such proposed rule
            and to the extent otherwise authorized under section
            1919(b)(1)(B) or 1919(d)(1)(C) of such Act or other regulatory
            authority.
                (4) Facility plan.--Not later than 1 year after the date on
            which the regulations are promulgated under subclause (II) of
            clause (ii) of sections 1819(b)(1)(B) and 1919(b)(1)(B) of the
            Social Security Act, as added by paragraphs (1) and (2), a
            skilled nursing facility and a nursing facility must submit to
            the Secretary a plan for the facility to meet the standards
            under such regulations and implement such best practices,
            including how to coordinate the implementation of such plan
            with quality assessment and assurance activities conducted
            under clause (i) of such sections.
        (c) GAO Study on Nursing Facility Undercapitalization.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study that examines the following:
                        (A) The extent to which corporations that own or
                    operate large numbers of nursing facilities, taking
                    into account ownership type (including private equity
                    and control interests), are undercapitalizing such
                    facilities.
                        (B) The effects of such undercapitalization on
                    quality of care, including staffing and food costs, at
                    such facilities.
                        (C) Options to address such undercapitalization,
                    such as requirements relating to surety bonds,
                    liability insurance, or minimum capitalization.
                (2) Report.--Not later than 18 months after the date of the
            enactment of this Act, the Comptroller General shall submit to
            Congress a report on the study conducted under paragraph (1).
                (3) Nursing facility.--In this subsection, the term
            ``nursing facility'' includes a skilled nursing facility.

    SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819 of the Social Security Act
            (42 U.S.C. 1395i-3) is amended--
                        (A) by redesignating subsection (i) as subsection
                    (j); and
                        (B) by inserting after subsection (h) the following
                    new subsection:
        ``(i) Nursing Home Compare Website.--
                ``(1) Inclusion of additional information.--
                        ``(A) In general.--The Secretary shall ensure that
                    the Department of Health and Human Services includes,
                    as part of the information provided for comparison of
                    nursing homes on the official Internet website of the
                    Federal Government for Medicare beneficiaries (commonly
                    referred to as the `Nursing Home Compare' Medicare
                    website) (or a successor website), the following
                    information in a manner that is prominent, easily
                    accessible, readily understandable to consumers of
                    long-term care services, and searchable:
                                ``(i) Information that is reported to the
                            Secretary under section 1124(c)(4).
                                ``(ii) Information on the `Special Focus
                            Facility program' (or a successor program)
                            established by the Centers for Medicare and
                            Medicaid Services, according to procedures
                            established by the Secretary. Such procedures
                            shall provide for the inclusion of information
                            with respect to, and the names and locations
                            of, those facilities that, since the previous
                            quarter--
                                        ``(I) were newly enrolled in the
                                    program;
                                        ``(II) are enrolled in the program
                                    and have failed to significantly
                                    improve;
                                        ``(III) are enrolled in the program
                                    and have significantly improved;
                                        ``(IV) have graduated from the
                                    program; and
                                        ``(V) have closed voluntarily or no
                                    longer participate under this title.
                                ``(iii) Staffing data for each facility
                            (including resident census data and data on the
                            hours of care provided per resident per day)
                            based on data submitted under subsection
                            (b)(8)(C), including information on staffing
                            turnover and tenure, in a format that is
                            clearly understandable to consumers of long-
                            term care services and allows such consumers to
                            compare differences in staffing between
                            facilities and State and national averages for
                            the facilities. Such format shall include--
                                        ``(I) concise explanations of how
                                    to interpret the data (such as a plain
                                    English explanation of data reflecting
                                    `nursing home staff hours per resident
                                    day');
                                        ``(II) differences in types of
                                    staff (such as training associated with
                                    different categories of staff);
                                        ``(III) the relationship between
                                    nurse staffing levels and quality of
                                    care; and
                                        ``(IV) an explanation that
                                    appropriate staffing levels vary based
                                    on patient case mix.
                                ``(iv) Links to State Internet websites
                            with information regarding State survey and
                            certification programs, links to Form 2567
                            State inspection reports (or a successor form)
                            on such websites, information to guide
                            consumers in how to interpret and understand
                            such reports, and the facility plan of
                            correction or other response to such report.
                                ``(v) The standardized complaint form
                            developed under subsection (f)(8), including
                            explanatory material on what complaint forms
                            are, how they are used, and how to file a
                            complaint with the State survey and
                            certification program and the State long-term
                            care ombudsman program.
                                ``(vi) Summary information on the number,
                            type, severity, and outcome of substantiated
                            complaints.
                                ``(vii) The number of adjudicated instances
                            of criminal violations by employees of a
                            nursing facility--
                                        ``(I) that were committed inside
                                    the facility;
                                        ``(II) with respect to such
                                    instances of violations or crimes
                                    committed inside of the facility that
                                    were the violations or crimes of abuse,
                                    neglect, and exploitation, criminal
                                    sexual abuse, or other violations or
                                    crimes that resulted in serious bodily
                                    injury; and
                                        ``(III) the number of civil
                                    monetary penalties levied against the
                                    facility, employees, contractors, and
                                    other agents.
                        ``(B) Deadline for provision of information.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the Secretary shall ensure that
                            the information described in subparagraph (A)
                            is included on such website (or a successor
                            website) not later than 1 year after the date
                            of the enactment of this subsection.
                                ``(ii) Exception.--The Secretary shall
                            ensure that the information described in
                            subparagraph (A)(i) and (A)(iii) is included on
                            such website (or a successor website) not later
                            than the date on which the requirements under
                            section 1124(c)(4) and subsection (b)(8)(C)(ii)
                            are implemented.
                ``(2) Review and modification of website.--
                        ``(A) In general.--The Secretary shall establish a
                    process--
                                ``(i) to review the accuracy, clarity of
                            presentation, timeliness, and comprehensiveness
                            of information reported on such website as of
                            the day before the date of the enactment of
                            this subsection; and
                                ``(ii) not later than 1 year after the date
                            of the enactment of this subsection, to modify
                            or revamp such website in accordance with the
                            review conducted under clause (i).
                        ``(B) Consultation.--In conducting the review under
                    subparagraph (A)(i), the Secretary shall consult with--
                                ``(i) State long-term care ombudsman
                            programs;
                                ``(ii) consumer advocacy groups;
                                ``(iii) provider stakeholder groups; and
                                ``(iv) any other representatives of
                            programs or groups the Secretary determines
                            appropriate.''.
                (2) Timeliness of submission of survey and certification
            information.--
                        (A) In general.--Section 1819(g)(5) of the Social
                    Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by
                    adding at the end the following new subparagraph:
                        ``(E) Submission of survey and certification
                    information to the secretary.--In order to improve the
                    timeliness of information made available to the public
                    under subparagraph (A) and provided on the Nursing Home
                    Compare Medicare website under subsection (i), each
                    State shall submit information respecting any survey or
                    certification made respecting a skilled nursing
                    facility (including any enforcement actions taken by
                    the State) to the Secretary not later than the date on
                    which the State sends such information to the facility.
                    The Secretary shall use the information submitted under
                    the preceding sentence to update the information
                    provided on the Nursing Home Compare Medicare website
                    as expeditiously as practicable but not less frequently
                    than quarterly.''.
                        (B) Effective date.--The amendment made by this
                    paragraph shall take effect 1 year after the date of
                    the enactment of this Act.
                (3) Special focus facility program.--Section 1819(f) of
            such Act is amended by adding at the end the following new
            paragraph:
                ``(8) Special focus facility program.--
                        ``(A) In general.--The Secretary shall conduct a
                    special focus facility program for enforcement of
                    requirements for skilled nursing facilities that the
                    Secretary has identified as having substantially failed
                    to meet applicable requirement of this Act.
                        ``(B) Periodic surveys.--Under such program the
                    Secretary shall conduct surveys of each facility in the
                    program not less than once every 6 months.''.
        (b) Nursing Facilities.--
                (1) In general.--Section 1919 of the Social Security Act
            (42 U.S.C. 1396r) is amended--
                        (A) by redesignating subsection (i) as subsection
                    (j); and
                        (B) by inserting after subsection (h) the following
                    new subsection:
        ``(i) Nursing Home Compare Website.--
                ``(1) Inclusion of additional information.--
                        ``(A) In general.--The Secretary shall ensure that
                    the Department of Health and Human Services includes,
                    as part of the information provided for comparison of
                    nursing homes on the official Internet website of the
                    Federal Government for Medicare beneficiaries (commonly
                    referred to as the `Nursing Home Compare' Medicare
                    website) (or a successor website), the following
                    information in a manner that is prominent, easily
                    accessible, readily understandable to consumers of
                    long-term care services, and searchable:
                                ``(i) Staffing data for each facility
                            (including resident census data and data on the
                            hours of care provided per resident per day)
                            based on data submitted under subsection
                            (b)(8)(C)(ii), including information on
                            staffing turnover and tenure, in a format that
                            is clearly understandable to consumers of long-
                            term care services and allows such consumers to
                            compare differences in staffing between
                            facilities and State and national averages for
                            the facilities. Such format shall include--
                                        ``(I) concise explanations of how
                                    to interpret the data (such as plain
                                    English explanation of data reflecting
                                    `nursing home staff hours per resident
                                    day');
                                        ``(II) differences in types of
                                    staff (such as training associated with
                                    different categories of staff);
                                        ``(III) the relationship between
                                    nurse staffing levels and quality of
                                    care; and
                                        ``(IV) an explanation that
                                    appropriate staffing levels vary based
                                    on patient case mix.
                                ``(ii) Links to State Internet websites
                            with information regarding State survey and
                            certification programs, links to Form 2567
                            State inspection reports (or a successor form)
                            on such websites, information to guide
                            consumers in how to interpret and understand
                            such reports, and the facility plan of
                            correction or other response to such report.
                                ``(iii) The standardized complaint form
                            developed under subsection (f)(10), including
                            explanatory material on what complaint forms
                            are, how they are used, and how to file a
                            complaint with the State survey and
                            certification program and the State long-term
                            care ombudsman program.
                                ``(iv) Summary information on the number,
                            type, severity, and outcome of substantiated
                            complaints.
                                ``(v) The number of adjudicated instances
                            of criminal violations by employees of a
                            nursing facility--
                                        ``(I) that were committed inside of
                                    the facility; and
                                        ``(II) with respect to such
                                    instances of violations or crimes
                                    committed outside of the facility, that
                                    were the violations or crimes that
                                    resulted in the serious bodily injury
                                    of an elder.
                        ``(B) Deadline for provision of information.--
                                ``(i) In general.--Except as provided in
                            clause (ii), the Secretary shall ensure that
                            the information described in subparagraph (A)
                            is included on such website (or a successor
                            website) not later than 1 year after the date
                            of the enactment of this subsection.
                                ``(ii) Exception.--The Secretary shall
                            ensure that the information described in
                            subparagraph (A)(i) and (A)(iii) is included on
                            such website (or a successor website) not later
                            than the date on which the requirements under
                            section 1124(c)(4) and subsection (b)(8)(C)(ii)
                            are implemented.
                ``(2) Review and modification of website.--
                        ``(A) In general.--The Secretary shall establish a
                    process--
                                ``(i) to review the accuracy, clarity of
                            presentation, timeliness, and comprehensiveness
                            of information reported on such website as of
                            the day before the date of the enactment of
                            this subsection; and
                                ``(ii) not later than 1 year after the date
                            of the enactment of this subsection, to modify
                            or revamp such website in accordance with the
                            review conducted under clause (i).
                        ``(B) Consultation.--In conducting the review under
                    subparagraph (A)(i), the Secretary shall consult with--
                                ``(i) State long-term care ombudsman
                            programs;
                                ``(ii) consumer advocacy groups;
                                ``(iii) provider stakeholder groups;
                                ``(iv) skilled nursing facility employees
                            and their representatives; and
                                ``(v) any other representatives of programs
                            or groups the Secretary determines
                            appropriate.''.
                (2) Timeliness of submission of survey and certification
            information.--
                        (A) In general.--Section 1919(g)(5) of the Social
                    Security Act (42 U.S.C. 1396r(g)(5)) is amended by
                    adding at the end the following new subparagraph:
                        ``(E) Submission of survey and certification
                    information to the secretary.--In order to improve the
                    timeliness of information made available to the public
                    under subparagraph (A) and provided on the Nursing Home
                    Compare Medicare website under subsection (i), each
                    State shall submit information respecting any survey or
                    certification made respecting a nursing facility
                    (including any enforcement actions taken by the State)
                    to the Secretary not later than the date on which the
                    State sends such information to the facility. The
                    Secretary shall use the information submitted under the
                    preceding sentence to update the information provided
                    on the Nursing Home Compare Medicare website as
                    expeditiously as practicable but not less frequently
                    than quarterly.''.
                        (B) Effective date.--The amendment made by this
                    paragraph shall take effect 1 year after the date of
                    the enactment of this Act.
                (3) Special focus facility program.--Section 1919(f) of
            such Act is amended by adding at the end of the following new
            paragraph:
                ``(10) Special focus facility program.--
                        ``(A) In general.--The Secretary shall conduct a
                    special focus facility program for enforcement of
                    requirements for nursing facilities that the Secretary
                    has identified as having substantially failed to meet
                    applicable requirements of this Act.
                        ``(B) Periodic surveys.--Under such program the
                    Secretary shall conduct surveys of each facility in the
                    program not less often than once every 6 months.''.
        (c) Availability of Reports on Surveys, Certifications, and
    Complaint Investigations.--
                (1) Skilled nursing facilities.--Section 1819(d)(1) of the
            Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by
            sections 1411 and 1412, is amended by adding at the end the
            following new subparagraph:
                        ``(D) Availability of survey, certification, and
                    complaint investigation reports.--A skilled nursing
                    facility must--
                                ``(i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the facility
                            during the 3 preceding years available for any
                            individual to review upon request; and
                                ``(ii) post notice of the availability of
                            such reports in areas of the facility that are
                            prominent and accessible to the public.
                    The facility shall not make available under clause (i)
                    identifying information about complainants or
                    residents.''.
                (2) Nursing facilities.--Section 1919(d)(1) of the Social
            Security Act (42 U.S.C. 1396r(d)(1)), as amended by sections
            1411 and 1412, is amended by adding at the end the following
            new subparagraph:
                        ``(D) Availability of survey, certification, and
                    complaint investigation reports.--A nursing facility
                    must--
                                ``(i) have reports with respect to any
                            surveys, certifications, and complaint
                            investigations made respecting the facility
                            during the 3 preceding years available for any
                            individual to review upon request; and
                                ``(ii) post notice of the availability of
                            such reports in areas of the facility that are
                            prominent and accessible to the public.
                    The facility shall not make available under clause (i)
                    identifying information about complainants or
                    residents.''.
                (3) Effective date.--The amendments made by this subsection
            shall take effect 1 year after the date of the enactment of
            this Act.
        (d) Guidance to States on Form 2567 State Inspection Reports and
    Complaint Investigation Reports.--
                (1) Guidance.--The Secretary of Health and Human Services
            (in this subtitle referred to as the ``Secretary'') shall
            provide guidance to States on how States can establish
            electronic links to Form 2567 State inspection reports (or a
            successor form), complaint investigation reports, and a
            facility's plan of correction or other response to such Form
            2567 State inspection reports (or a successor form) on the
            Internet website of the State that provides information on
            skilled nursing facilities and nursing facilities and the
            Secretary shall, if possible, include such information on
            Nursing Home Compare.
                (2) Requirement.--Section 1902(a)(9) of the Social Security
            Act (42 U.S.C. 1396a(a)(9)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (B);
                        (B) by striking the semicolon at the end of
                    subparagraph (C) and inserting ``, and''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(D) that the State maintain a consumer-oriented
                    website providing useful information to consumers
                    regarding all skilled nursing facilities and all
                    nursing facilities in the State, including for each
                    facility, Form 2567 State inspection reports (or a
                    successor form), complaint investigation reports, the
                    facility's plan of correction, and such other
                    information that the State or the Secretary considers
                    useful in assisting the public to assess the quality of
                    long term care options and the quality of care provided
                    by individual facilities;''.
                (3) Definitions.--In this subsection:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395i-3(a)).

    SEC. 1414. REPORTING OF EXPENDITURES.

        Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is
    amended by adding at the end the following new subsection:
        ``(f) Reporting of Direct Care Expenditures.--
                ``(1) In general.--For cost reports submitted under this
            title for cost reporting periods beginning on or after the date
            that is 3 years after the date of the enactment of this
            subsection, skilled nursing facilities shall separately report
            expenditures for wages and benefits for direct care staff
            (breaking out (at a minimum) registered nurses, licensed
            professional nurses, certified nurse assistants, and other
            medical and therapy staff).
                ``(2) Modification of form.--The Secretary, in consultation
            with private sector accountants experienced with skilled
            nursing facility cost reports, shall redesign such reports to
            meet the requirement of paragraph (1) not later than 1 year
            after the date of the enactment of this subsection.
                ``(3) Categorization by functional accounts.--Not later
            than 30 months after the date of the enactment of this
            subsection, the Secretary, working in consultation with the
            Medicare Payment Advisory Commission, the Inspector General of
            the Department of Health and Human Services, and other expert
            parties the Secretary determines appropriate, shall take the
            expenditures listed on cost reports, as modified under
            paragraph (1), submitted by skilled nursing facilities and
            categorize such expenditures, regardless of any source of
            payment for such expenditures, for each skilled nursing
            facility into the following functional accounts on an annual
            basis:
                        ``(A) Spending on direct care services (including
                    nursing, therapy, and medical services).
                        ``(B) Spending on indirect care (including
                    housekeeping and dietary services).
                        ``(C) Capital assets (including building and land
                    costs).
                        ``(D) Administrative services costs.
                ``(4) Availability of information submitted.--The Secretary
            shall establish procedures to make information on expenditures
            submitted under this subsection readily available to interested
            parties upon request, subject to such requirements as the
            Secretary may specify under the procedures established under
            this paragraph.''.

    SEC. 1415. STANDARDIZED COMPLAINT FORM.

        (a) Skilled Nursing Facilities.--
                (1) Development by the secretary.--Section 1819(f) of the
            Social Security Act (42 U.S.C. 1395i-3(f)), as amended by
            section 1413(a)(3), is amended by adding at the end the
            following new paragraph:
                ``(9) Standardized complaint form.--The Secretary shall
            develop a standardized complaint form for use by a resident (or
            a person acting on the resident's behalf) in filing a complaint
            with a State survey and certification agency and a State long-
            term care ombudsman program with respect to a skilled nursing
            facility.''.
                (2) State requirements.--Section 1819(e) of the Social
            Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the
            end the following new paragraph:
                ``(6) Complaint processes and whistle-blower protection.--
                        ``(A) Complaint forms.--The State must make the
                    standardized complaint form developed under subsection
                    (f)(9) available upon request to--
                                ``(i) a resident of a skilled nursing
                            facility;
                                ``(ii) any person acting on the resident's
                            behalf; and
                                ``(iii) any person who works at a skilled
                            nursing facility or is a representative of such
                            a worker.
                        ``(B) Complaint resolution process.--The State must
                    establish a complaint resolution process in order to
                    ensure that a resident, the legal representative of a
                    resident of a skilled nursing facility, or other
                    responsible party is not retaliated against if the
                    resident, legal representative, or responsible party
                    has complained, in good faith, about the quality of
                    care or other issues relating to the skilled nursing
                    facility, that the legal representative of a resident
                    of a skilled nursing facility or other responsible
                    party is not denied access to such resident or
                    otherwise retaliated against if such representative
                    party has complained, in good faith, about the quality
                    of care provided by the facility or other issues
                    relating to the facility, and that a person who works
                    at a skilled nursing facility is not retaliated against
                    if the worker has complained, in good faith, about
                    quality of care or services or an issue relating to the
                    quality of care or services provided at the facility,
                    whether the resident, legal representative, other
                    responsible party, or worker used the form developed
                    under subsection (f)(9) or some other method for
                    submitting the complaint. Such complaint resolution
                    process shall include--
                                ``(i) procedures to assure accurate
                            tracking of complaints received, including
                            notification to the complainant that a
                            complaint has been received;
                                ``(ii) procedures to determine the likely
                            severity of a complaint and for the
                            investigation of the complaint;
                                ``(iii) deadlines for responding to a
                            complaint and for notifying the complainant of
                            the outcome of the investigation; and
                                ``(iv) procedures to ensure that the
                            identity of the complainant will be kept
                            confidential.
                        ``(C) Whistleblower protection.--
                                ``(i) Prohibition against retaliation.--No
                            person who works at a skilled nursing facility
                            may be penalized, discriminated, or retaliated
                            against with respect to any aspect of
                            employment, including discharge, promotion,
                            compensation, terms, conditions, or privileges
                            of employment, or have a contract for services
                            terminated, because the person (or anyone
                            acting at the person's request) complained, in
                            good faith, about the quality of care or
                            services provided by a nursing facility or
                            about other issues relating to quality of care
                            or services, whether using the form developed
                            under subsection (f)(9) or some other method
                            for submitting the complaint.
                                ``(ii) Retaliatory reporting.--A skilled
                            nursing facility may not file a complaint or a
                            report against a person who works (or has
                            worked at the facility with the appropriate
                            State professional disciplinary agency because
                            the person (or anyone acting at the person's
                            request) complained in good faith, as described
                            in clause (i).
                                ``(iii) Commencement of action.--Any person
                            who believes the person has been penalized,
                            discriminated, or retaliated against or had a
                            contract for services terminated in violation
                            of clause (i) or against whom a complaint has
                            been filed in violation of clause (ii) may
                            bring an action at law or equity in the
                            appropriate district court of the United
                            States, which shall have jurisdiction over such
                            action without regard to the amount in
                            controversy or the citizenship of the parties,
                            and which shall have jurisdiction to grant
                            complete relief, including, but not limited to,
                            injunctive relief (such as reinstatement,
                            compensatory damages (which may include
                            reimbursement of lost wages, compensation, and
                            benefits), costs of litigation (including
                            reasonable attorney and expert witness fees),
                            exemplary damages where appropriate, and such
                            other relief as the court deems just and
                            proper.
                                ``(iv) Rights not waivable.--The rights
                            protected by this paragraph may not be
                            diminished by contract or other agreement, and
                            nothing in this paragraph shall be construed to
                            diminish any greater or additional protection
                            provided by Federal or State law or by contract
                            or other agreement.
                                ``(v) Requirement to post notice of
                            employee rights.--Each skilled nursing facility
                            shall post conspicuously in an appropriate
                            location a sign (in a form specified by the
                            Secretary) specifying the rights of persons
                            under this paragraph and including a statement
                            that an employee may file a complaint with the
                            Secretary against a skilled nursing facility
                            that violates the provisions of this paragraph
                            and information with respect to the manner of
                            filing such a complaint.
                        ``(D) Rule of construction.--Nothing in this
                    paragraph shall be construed as preventing a resident
                    of a skilled nursing facility (or a person acting on
                    the resident's behalf) from submitting a complaint in a
                    manner or format other than by using the standardized
                    complaint form developed under subsection (f)(9)
                    (including submitting a complaint orally).
                        ``(E) Good faith defined.--For purposes of this
                    paragraph, an individual shall be deemed to be acting
                    in good faith with respect to the filing of a complaint
                    if the individual reasonably believes--
                                ``(i) the information reported or disclosed
                            in the complaint is true; and
                                ``(ii) the violation of this title has
                            occurred or may occur in relation to such
                            information.''.
        (b) Nursing Facilities.--
                (1) Development by the secretary.--Section 1919(f) of the
            Social Security Act (42 U.S.C. 1395i-3(f)), as amended by
            section 1413(b), is amended by adding at the end the following
            new paragraph:
                ``(11) Standardized complaint form.--The Secretary shall
            develop a standardized complaint form for use by a resident (or
            a person acting on the resident's behalf) in filing a complaint
            with a State survey and certification agency and a State long-
            term care ombudsman program with respect to a nursing
            facility.''.
                (2) State requirements.--Section 1919(e) of the Social
            Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the
            end the following new paragraph:
                ``(8) Complaint processes and whistleblower protection.--
                        ``(A) Complaint forms.--The State must make the
                    standardized complaint form developed under subsection
                    (f)(11) available upon request to--
                                ``(i) a resident of a nursing facility;
                                ``(ii) any person acting on the resident's
                            behalf; and
                                ``(iii) any person who works at a nursing
                            facility or a representative of such a worker.
                        ``(B) Complaint resolution process.--The State must
                    establish a complaint resolution process in order to
                    ensure that a resident, the legal representative of a
                    resident of a nursing facility, or other responsible
                    party is not retaliated against if the resident, legal
                    representative, or responsible party has complained, in
                    good faith, about the quality of care or other issues
                    relating to the nursing facility, that the legal
                    representative of a resident of a nursing facility or
                    other responsible party is not denied access to such
                    resident or otherwise retaliated against if such
                    representative party has complained, in good faith,
                    about the quality of care provided by the facility or
                    other issues relating to the facility, and that a
                    person who works at a nursing facility is not
                    retaliated against if the worker has complained, in
                    good faith, about quality of care or services or an
                    issue relating to the quality of care or services
                    provided at the facility, whether the resident, legal
                    representative, other responsible party, or worker used
                    the form developed under subsection (f)(11) or some
                    other method for submitting the complaint. Such
                    complaint resolution process shall include--
                                ``(i) procedures to assure accurate
                            tracking of complaints received, including
                            notification to the complainant that a
                            complaint has been received;
                                ``(ii) procedures to determine the likely
                            severity of a complaint and for the
                            investigation of the complaint;
                                ``(iii) deadlines for responding to a
                            complaint and for notifying the complainant of
                            the outcome of the investigation; and
                                ``(iv) procedures to ensure that the
                            identity of the complainant will be kept
                            confidential.
                        ``(C) Whistleblower protection.--
                                ``(i) Prohibition against retaliation.--No
                            person who works at a nursing facility may be
                            penalized, discriminated, or retaliated against
                            with respect to any aspect of employment,
                            including discharge, promotion, compensation,
                            terms, conditions, or privileges of employment,
                            or have a contract for services terminated,
                            because the person (or anyone acting at the
                            person's request) complained, in good faith,
                            about the quality of care or services provided
                            by a nursing facility or about other issues
                            relating to quality of care or services,
                            whether using the form developed under
                            subsection (f)(11) or some other method for
                            submitting the complaint.
                                ``(ii) Retaliatory reporting.--A nursing
                            facility may not file a complaint or a report
                            against a person who works (or has worked at
                            the facility with the appropriate State
                            professional disciplinary agency because the
                            person (or anyone acting at the person's
                            request) complained in good faith, as described
                            in clause (i).
                                ``(iii) Commencement of action.--Any person
                            who believes the person has been penalized,
                            discriminated, or retaliated against or had a
                            contract for services terminated in violation
                            of clause (i) or against whom a complaint has
                            been filed in violation of clause (ii) may
                            bring an action at law or equity in the
                            appropriate district court of the United
                            States, which shall have jurisdiction over such
                            action without regard to the amount in
                            controversy or the citizenship of the parties,
                            and which shall have jurisdiction to grant
                            complete relief, including, but not limited to,
                            injunctive relief (such as reinstatement,
                            compensatory damages (which may include
                            reimbursement of lost wages, compensation, and
                            benefits), costs of litigation (including
                            reasonable attorney and expert witness fees),
                            exemplary damages where appropriate, and such
                            other relief as the court deems just and
                            proper.
                                ``(iv) Rights not waivable.--The rights
                            protected by this paragraph may not be
                            diminished by contract or other agreement, and
                            nothing in this paragraph shall be construed to
                            diminish any greater or additional protection
                            provided by Federal or State law or by contract
                            or other agreement.
                                ``(v) Requirement to post notice of
                            employee rights.--Each nursing facility shall
                            post conspicuously in an appropriate location a
                            sign (in a form specified by the Secretary)
                            specifying the rights of persons under this
                            paragraph and including a statement that an
                            employee may file a complaint with the
                            Secretary against a nursing facility that
                            violates the provisions of this paragraph and
                            information with respect to the manner of
                            filing such a complaint.
                        ``(D) Rule of construction.--Nothing in this
                    paragraph shall be construed as preventing a resident
                    of a nursing facility (or a person acting on the
                    resident's behalf) from submitting a complaint in a
                    manner or format other than by using the standardized
                    complaint form developed under subsection (f)(11)
                    (including submitting a complaint orally).
                        ``(E) Good faith defined.--For purposes of this
                    paragraph, an individual shall be deemed to be acting
                    in good faith with respect to the filing of a complaint
                    if the individual reasonably believes--
                                ``(i) the information reported or disclosed
                            in the complaint is true; and
                                ``(ii) the violation of this title has
                            occurred or may occur in relation to such
                            information.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.

        (a) Skilled Nursing Facilities.--Section 1819(b)(8) of the Social
    Security Act (42 U.S.C. 1395i-3(b)(8)) is amended by adding at the end
    the following new subparagraph:
                        ``(C) Submission of staffing information based on
                    payroll data in a uniform format.--Beginning not later
                    than 2 years after the date of the enactment of this
                    subparagraph, and after consulting with State long-term
                    care ombudsman programs, consumer advocacy groups,
                    provider stakeholder groups, employees and their
                    representatives, and other parties the Secretary deems
                    appropriate, the Secretary shall require a skilled
                    nursing facility to electronically submit to the
                    Secretary direct care staffing information (including
                    information with respect to agency and contract staff)
                    based on payroll and other verifiable and auditable
                    data in a uniform format (according to specifications
                    established by the Secretary in consultation with such
                    programs, groups, and parties). Such specifications
                    shall require that the information submitted under the
                    preceding sentence--
                                ``(i) specify the category of work a
                            certified employee performs (such as whether
                            the employee is a registered nurse, licensed
                            practical nurse, licensed vocational nurse,
                            certified nursing assistant, therapist, or
                            other medical personnel);
                                ``(ii) include resident census data and
                            information on resident case mix;
                                ``(iii) include a regular reporting
                            schedule; and
                                ``(iv) include information on employee
                            turnover and tenure and on the hours of care
                            provided by each category of certified
                            employees referenced in clause (i) per resident
                            per day.
                    Nothing in this subparagraph shall be construed as
                    preventing the Secretary from requiring submission of
                    such information with respect to specific categories,
                    such as nursing staff, before other categories of
                    certified employees. Information under this
                    subparagraph with respect to agency and contract staff
                    shall be kept separate from information on employee
                    staffing.''.
        (b) Nursing Facilities.--Section 1919(b)(8) of the Social Security
    Act (42 U.S.C. 1396r(b)(8)) is amended by adding at the end the
    following new subparagraph:
                        ``(C) Submission of staffing information based on
                    payroll data in a uniform format.--Beginning not later
                    than 2 years after the date of the enactment of this
                    subparagraph, and after consulting with State long-term
                    care ombudsman programs, consumer advocacy groups,
                    provider stakeholder groups, employees and their
                    representatives, and other parties the Secretary deems
                    appropriate, the Secretary shall require a nursing
                    facility to electronically submit to the Secretary
                    direct care staffing information (including information
                    with respect to agency and contract staff) based on
                    payroll and other verifiable and auditable data in a
                    uniform format (according to specifications established
                    by the Secretary in consultation with such programs,
                    groups, and parties). Such specifications shall require
                    that the information submitted under the preceding
                    sentence--
                                ``(i) specify the category of work a
                            certified employee performs (such as whether
                            the employee is a registered nurse, licensed
                            practical nurse, licensed vocational nurse,
                            certified nursing assistant, therapist, or
                            other medical personnel);
                                ``(ii) include resident census data and
                            information on resident case mix;
                                ``(iii) include a regular reporting
                            schedule; and
                                ``(iv) include information on employee
                            turnover and tenure and on the hours of care
                            provided by each category of certified
                            employees referenced in clause (i) per resident
                            per day.
                    Nothing in this subparagraph shall be construed as
                    preventing the Secretary from requiring submission of
                    such information with respect to specific categories,
                    such as nursing staff, before other categories of
                    certified employees. Information under this
                    subparagraph with respect to agency and contract staff
                    shall be kept separate from information on employee
                    staffing.''.

                         PART 2--TARGETING ENFORCEMENT

    SEC. 1421. CIVIL MONEY PENALTIES.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819(h)(2)(B)(ii) of the Social
            Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended to
            read as follows:
                                ``(ii) Authority with respect to civil
                            money penalties.--
                                        ``(I) Amount.--The Secretary may
                                    impose a civil money penalty in the
                                    applicable per instance or per day
                                    amount (as defined in subclause (II)
                                    and (III)) for each day or instance,
                                    respectively, of noncompliance (as
                                    determined appropriate by the
                                    Secretary).
                                        ``(II) Applicable per instance
                                    amount.--In this clause, the term
                                    `applicable per instance amount'
                                    means--
                                                ``(aa) in the case where
                                            the deficiency is found to be a
                                            direct proximate cause of death
                                            of a resident of the facility,
                                            an amount not to exceed
                                            $100,000;
                                                ``(bb) in each case of a
                                            deficiency where the facility
                                            is cited for actual harm or
                                            immediate jeopardy, an amount
                                            not less than $3,050 and not
                                            more than $25,000; and
                                                ``(cc) in each case of any
                                            other deficiency, an amount not
                                            less than $250 and not to
                                            exceed $3050.
                                        ``(III) Applicable per day
                                    amount.--In this clause, the term
                                    `applicable per day amount' means--
                                                ``(aa) in each case of a
                                            deficiency where the facility
                                            is cited for actual harm or
                                            immediate jeopardy, an amount
                                            not less than $3,050 and not
                                            more than $25,000; and
                                                ``(bb) in each case of any
                                            other deficiency, an amount not
                                            less than $250 and not to
                                            exceed $3,050.
                                        ``(IV) Reduction of civil money
                                    penalties in certain circumstances.--
                                    Subject to subclauses (V) and (VI), in
                                    the case where a facility self-reports
                                    and promptly corrects a deficiency for
                                    which a penalty was imposed under this
                                    clause not later than 10 calendar days
                                    after the date of such imposition, the
                                    Secretary may reduce the amount of the
                                    penalty imposed by not more than 50
                                    percent.
                                        ``(V) Prohibition on reduction for
                                    certain deficiencies.--
                                                ``(aa) Repeat
                                            deficiencies.--The Secretary
                                            may not reduce under subclause
                                            (IV) the amount of a penalty if
                                            the deficiency is a repeat
                                            deficiency.
                                                ``(bb) Certain other
                                            deficiencies.--The Secretary
                                            may not reduce under subclause
                                            (IV) the amount of a penalty if
                                            the penalty is imposed for a
                                            deficiency described in
                                            subclause (II)(aa) or (III)(aa)
                                            and the actual harm or
                                            widespread harm immediately
                                            jeopardizes the health or
                                            safety of a resident or
                                            residents of the facility, or
                                            if the penalty is imposed for a
                                            deficiency described in
                                            subclause (II)(bb).
                                        ``(VI) Limitation on aggregate
                                    reductions.--The aggregate reduction in
                                    a penalty under subclause (IV) may not
                                    exceed 35 percent on the basis of self-
                                    reporting, on the basis of a waiver or
                                    an appeal (as provided for under
                                    regulations under section 488.436 of
                                    title 42, Code of Federal Regulations),
                                    or on the basis of both.
                                        ``(VII) Collection of civil money
                                    penalties.--In the case of a civil
                                    money penalty imposed under this
                                    clause, the Secretary--
                                                ``(aa) subject to item
                                            (cc), shall, not later than 30
                                            days after the date of
                                            imposition of the penalty,
                                            provide the opportunity for the
                                            facility to participate in an
                                            independent informal dispute
                                            resolution process which
                                            generates a written record
                                            prior to the collection of such
                                            penalty, but such opportunity
                                            shall not affect the
                                            responsibility of the State
                                            survey agency for making final
                                            recommendations for such
                                            penalties;
                                                ``(bb) in the case where
                                            the penalty is imposed for each
                                            day of noncompliance, shall not
                                            impose a penalty for any day
                                            during the period beginning on
                                            the initial day of the
                                            imposition of the penalty and
                                            ending on the day on which the
                                            informal dispute resolution
                                            process under item (aa) is
                                            completed;
                                                ``(cc) may provide for the
                                            collection of such civil money
                                            penalty and the placement of
                                            such amounts collected in an
                                            escrow account under the
                                            direction of the Secretary on
                                            the earlier of the date on
                                            which the informal dispute
                                            resolution process under item
                                            (aa) is completed or the date
                                            that is 90 days after the date
                                            of the imposition of the
                                            penalty;
                                                ``(dd) may provide that
                                            such amounts collected are kept
                                            in such account pending the
                                            resolution of any subsequent
                                            appeals;
                                                ``(ee) in the case where
                                            the facility successfully
                                            appeals the penalty, may
                                            provide for the return of such
                                            amounts collected (plus
                                            interest) to the facility; and
                                                ``(ff) in the case where
                                            all such appeals are
                                            unsuccessful, may provide that
                                            some portion of such amounts
                                            collected may be used to
                                            support activities that benefit
                                            residents, including assistance
                                            to support and protect
                                            residents of a facility that
                                            closes (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of relocating
                                            residents to home and
                                            community-based settings or
                                            another facility), projects
                                            that support resident and
                                            family councils and other
                                            consumer involvement in
                                            assuring quality care in
                                            facilities, and facility
                                            improvement initiatives
                                            approved by the Secretary
                                            (including joint training of
                                            facility staff and surveyors,
                                            technical assistance for
                                            facilities under quality
                                            assurance programs, the
                                            appointment of temporary
                                            management, and other
                                            activities approved by the
                                            Secretary).
                                        ``(VIII) Procedure.--The provisions
                                    of section 1128A (other than
                                    subsections (a) and (b) and except to
                                    the extent that such provisions require
                                    a hearing prior to the imposition of a
                                    civil money penalty) shall apply to a
                                    civil money penalty under this clause
                                    in the same manner as such provisions
                                    apply to a penalty or proceeding under
                                    section 1128A(a).''.
                (2) Conforming amendment.--The second sentence of section
            1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5))
            is amended by inserting ``(ii),'' after ``(i),''.
        (b) Nursing Facilities.--
                (1) Penalties imposed by the state.--
                        (A) In general.--Section 1919(h)(2) of the Social
                    Security Act (42 U.S.C. 1396r(h)(2)) is amended--
                                (i) in subparagraph (A)(ii), by striking
                            the first sentence and inserting the following:
                            ``A civil money penalty in accordance with
                            subparagraph (G).''; and
                                (ii) by adding at the end the following new
                            subparagraph:
                        ``(G) Civil money penalties.--
                                ``(i) In general.--The State may impose a
                            civil money penalty under subparagraph (A)(ii)
                            in the applicable per instance or per day
                            amount (as defined in subclause (II) and (III))
                            for each day or instance, respectively, of
                            noncompliance (as determined appropriate by the
                            Secretary).
                                ``(ii) Applicable per instance amount.--In
                            this subparagraph, the term `applicable per
                            instance amount' means--
                                        ``(I) in the case where the
                                    deficiency is found to be a direct
                                    proximate cause of death of a resident
                                    of the facility, an amount not to
                                    exceed $100,000;
                                        ``(II) in each case of a deficiency
                                    where the facility is cited for actual
                                    harm or immediate jeopardy, an amount
                                    not less than $3,050 and not more than
                                    $25,000; and
                                        ``(III) in each case of any other
                                    deficiency, an amount not less than
                                    $250 and not to exceed $3,050.
                                ``(iii) Applicable per day amount.--In this
                            subparagraph, the term `applicable per day
                            amount' means--
                                        ``(I) in each case of a deficiency
                                    where the facility is cited for actual
                                    harm or immediate jeopardy, an amount
                                    not less than $3,050 and not more than
                                    $25,000; and
                                        ``(II) in each case of any other
                                    deficiency, an amount not less than
                                    $250 and not to exceed $3,050.
                                ``(iv) Reduction of civil money penalties
                            in certain circumstances.--Subject to clauses
                            (v) and (vi), in the case where a facility
                            self-reports and promptly corrects a deficiency
                            for which a penalty was imposed under
                            subparagraph (A)(ii) not later than 10 calendar
                            days after the date of such imposition, the
                            State may reduce the amount of the penalty
                            imposed by not more than 50 percent.
                                ``(v) Prohibition on reduction for certain
                            deficiencies.--
                                        ``(I) Repeat deficiencies.--The
                                    State may not reduce under clause (iv)
                                    the amount of a penalty if the State
                                    had reduced a penalty imposed on the
                                    facility in the preceding year under
                                    such clause with respect to a repeat
                                    deficiency.
                                        ``(II) Certain other
                                    deficiencies.--The State may not reduce
                                    under clause (iv) the amount of a
                                    penalty if the penalty is imposed for a
                                    deficiency described in clause (ii)(II)
                                    or (iii)(I) and the actual harm or
                                    widespread harm that immediately
                                    jeopardizes the health or safety of a
                                    resident or residents of the facility,
                                    or if the penalty is imposed for a
                                    deficiency described in clause (ii)(I).
                                        ``(III) Limitation on aggregate
                                    reductions.--The aggregate reduction in
                                    a penalty under clause (iv) may not
                                    exceed 35 percent on the basis of self-
                                    reporting, on the basis of a waiver or
                                    an appeal (as provided for under
                                    regulations under section 488.436 of
                                    title 42, Code of Federal Regulations),
                                    or on the basis of both.
                                ``(iv) Collection of civil money
                            penalties.--In the case of a civil money
                            penalty imposed under subparagraph (A)(ii), the
                            State--
                                        ``(I) subject to subclause (III),
                                    shall, not later than 30 days after the
                                    date of imposition of the penalty,
                                    provide the opportunity for the
                                    facility to participate in an
                                    independent informal dispute resolution
                                    process which generates a written
                                    record prior to the collection of such
                                    penalty, but such opportunity shall not
                                    affect the responsibility of the State
                                    survey agency for making final
                                    recommendations for such penalties;
                                        ``(II) in the case where the
                                    penalty is imposed for each day of
                                    noncompliance, shall not impose a
                                    penalty for any day during the period
                                    beginning on the initial day of the
                                    imposition of the penalty and ending on
                                    the day on which the informal dispute
                                    resolution process under subclause (I)
                                    is completed;
                                        ``(III) may provide for the
                                    collection of such civil money penalty
                                    and the placement of such amounts
                                    collected in an escrow account under
                                    the direction of the State on the
                                    earlier of the date on which the
                                    informal dispute resolution process
                                    under subclause (I) is completed or the
                                    date that is 90 days after the date of
                                    the imposition of the penalty;
                                        ``(IV) may provide that such
                                    amounts collected are kept in such
                                    account pending the resolution of any
                                    subsequent appeals;
                                        ``(V) in the case where the
                                    facility successfully appeals the
                                    penalty, may provide for the return of
                                    such amounts collected (plus interest)
                                    to the facility; and
                                        ``(VI) in the case where all such
                                    appeals are unsuccessful, may provide
                                    that such funds collected shall be used
                                    for the purposes described in the
                                    second sentence of subparagraph
                                    (A)(ii).''.
                        (B) Conforming amendment.--The second sentence of
                    section 1919(h)(2)(A)(ii) of the Social Security Act
                    (42 U.S.C. 1396r(h)(2)(A)(ii)) is amended by inserting
                    before the period at the end the following: ``, and
                    some portion of such funds may be used to support
                    activities that benefit residents, including assistance
                    to support and protect residents of a facility that
                    closes (voluntarily or involuntarily) or is decertified
                    (including offsetting costs of relocating residents to
                    home and community-based settings or another facility),
                    projects that support resident and family councils and
                    other consumer involvement in assuring quality care in
                    facilities, and facility improvement initiatives
                    approved by the Secretary (including joint training of
                    facility staff and surveyors, providing technical
                    assistance to facilities under quality assurance
                    programs, the appointment of temporary management, and
                    other activities approved by the Secretary)''.
                (2) Penalties imposed by the secretary.--
                        (A) In general.--Section 1919(h)(3)(C)(ii) of the
                    Social Security Act (42 U.S.C. 1396r(h)(3)(C)) is
                    amended to read as follows:
                                ``(ii) Authority with respect to civil
                            money penalties.--
                                        ``(I) Amount.--Subject to subclause
                                    (II), the Secretary may impose a civil
                                    money penalty in an amount not to
                                    exceed $10,000 for each day or each
                                    instance of noncompliance (as
                                    determined appropriate by the
                                    Secretary).
                                        ``(II) Reduction of civil money
                                    penalties in certain circumstances.--
                                    Subject to subclause (III), in the case
                                    where a facility self-reports and
                                    promptly corrects a deficiency for
                                    which a penalty was imposed under this
                                    clause not later than 10 calendar days
                                    after the date of such imposition, the
                                    Secretary may reduce the amount of the
                                    penalty imposed by not more than 50
                                    percent.
                                        ``(III) Prohibition on reduction
                                    for repeat deficiencies.--The Secretary
                                    may not reduce the amount of a penalty
                                    under subclause (II) if the Secretary
                                    had reduced a penalty imposed on the
                                    facility in the preceding year under
                                    such subclause with respect to a repeat
                                    deficiency.
                                        ``(IV) Collection of civil money
                                    penalties.--In the case of a civil
                                    money penalty imposed under this
                                    clause, the Secretary--
                                                ``(aa) subject to item
                                            (bb), shall, not later than 30
                                            days after the date of
                                            imposition of the penalty,
                                            provide the opportunity for the
                                            facility to participate in an
                                            independent informal dispute
                                            resolution process which
                                            generates a written record
                                            prior to the collection of such
                                            penalty;
                                                ``(bb) in the case where
                                            the penalty is imposed for each
                                            day of noncompliance, shall not
                                            impose a penalty for any day
                                            during the period beginning on
                                            the initial day of the
                                            imposition of the penalty and
                                            ending on the day on which the
                                            informal dispute resolution
                                            process under item (aa) is
                                            completed;
                                                ``(cc) may provide for the
                                            collection of such civil money
                                            penalty and the placement of
                                            such amounts collected in an
                                            escrow account under the
                                            direction of the Secretary on
                                            the earlier of the date on
                                            which the informal dispute
                                            resolution process under item
                                            (aa) is completed or the date
                                            that is 90 days after the date
                                            of the imposition of the
                                            penalty;
                                                ``(dd) may provide that
                                            such amounts collected are kept
                                            in such account pending the
                                            resolution of any subsequent
                                            appeals;
                                                ``(ee) in the case where
                                            the facility successfully
                                            appeals the penalty, may
                                            provide for the return of such
                                            amounts collected (plus
                                            interest) to the facility; and
                                                ``(ff) in the case where
                                            all such appeals are
                                            unsuccessful, may provide that
                                            some portion of such amounts
                                            collected may be used to
                                            support activities that benefit
                                            residents, including assistance
                                            to support and protect
                                            residents of a facility that
                                            closes (voluntarily or
                                            involuntarily) or is
                                            decertified (including
                                            offsetting costs of relocating
                                            residents to home and
                                            community-based settings or
                                            another facility), projects
                                            that support resident and
                                            family councils and other
                                            consumer involvement in
                                            assuring quality care in
                                            facilities, and facility
                                            improvement initiatives
                                            approved by the Secretary
                                            (including joint training of
                                            facility staff and surveyors,
                                            technical assistance for
                                            facilities under quality
                                            assurance programs, the
                                            appointment of temporary
                                            management, and other
                                            activities approved by the
                                            Secretary).
                                        ``(V) Procedure.--The provisions of
                                    section 1128A (other than subsections
                                    (a) and (b) and except to the extent
                                    that such provisions require a hearing
                                    prior to the imposition of a civil
                                    money penalty) shall apply to a civil
                                    money penalty under this clause in the
                                    same manner as such provisions apply to
                                    a penalty or proceeding under section
                                    1128A(a).''.
                        (B) Conforming amendment.--Section 1919(h)(8) of
                    the Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is
                    amended by inserting ``and in paragraph (3)(C)(ii)''
                    after ``paragraph (2)(A)''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

        (a) Establishment.--
                (1) In general.--The Secretary, in consultation with the
            Inspector General of the Department of Health and Human
            Services, shall establish a pilot program (in this section
            referred to as the ``pilot program'') to develop, test, and
            implement use of an independent monitor to oversee interstate
            and large intrastate chains of skilled nursing facilities and
            nursing facilities.
                (2) Selection.--The Secretary shall select chains of
            skilled nursing facilities and nursing facilities described in
            paragraph (1) to participate in the pilot program from among
            those chains that submit an application to the Secretary at
            such time, in such manner, and containing such information as
            the Secretary may require.
                (3) Duration.--The Secretary shall conduct the pilot
            program for a two-year period.
                (4) Implementation.--The Secretary shall implement the
            pilot program not later than one year after the date of the
            enactment of this Act.
        (b) Requirements.--The Secretary shall evaluate chains selected to
    participate in the pilot program based on criteria selected by the
    Secretary, including where evidence suggests that one or more
    facilities of the chain are experiencing serious safety and quality of
    care problems. Such criteria may include the evaluation of a chain that
    includes one or more facilities participating in the ``Special Focus
    Facility'' program (or a successor program) or one or more facilities
    with a record of repeated serious safety and quality of care
    deficiencies.
        (c) Responsibilities of the Independent Monitor.--An independent
    monitor that enters into a contract with the Secretary to participate
    in the conduct of such program shall--
                (1) conduct periodic reviews and prepare root-cause quality
            and deficiency analyses of a chain to assess if facilities of
            the chain are in compliance with State and Federal laws and
            regulations applicable to the facilities;
                (2) undertake sustained oversight of the chain, whether
            publicly or privately held, to involve the owners of the chain
            and the principal business partners of such owners in
            facilitating compliance by facilities of the chain with State
            and Federal laws and regulations applicable to the facilities;
                (3) analyze the management structure, distribution of
            expenditures, and nurse staffing levels of facilities of the
            chain in relation to resident census, staff turnover rates, and
            tenure;
                (4) report findings and recommendations with respect to
            such reviews, analyses, and oversight to the chain and
            facilities of the chain, to the Secretary and to relevant
            States; and
                (5) publish the results of such reviews, analyses, and
            oversight.
        (d) Implementation of Recommendations.--
                (1) Receipt of finding by chain.--Not later than 10 days
            after receipt of a finding of an independent monitor under
            subsection (c)(4), a chain participating in the pilot program
            shall submit to the independent monitor a report--
                        (A) outlining corrective actions the chain will
                    take to implement the recommendations in such report;
                    or
                        (B) indicating that the chain will not implement
                    such recommendations and why it will not do so.
                (2) Receipt of report by independent monitor.--Not later
            than 10 days after the date of receipt of a report submitted by
            a chain under paragraph (1), an independent monitor shall
            finalize its recommendations and submit a report to the chain
            and facilities of the chain, the Secretary, and the State (or
            States) involved, as appropriate, containing such final
            recommendations.
        (e) Cost of Appointment.--A chain shall be responsible for a
    portion of the costs associated with the appointment of independent
    monitors under the pilot program. The chain shall pay such portion to
    the Secretary (in an amount and in accordance with procedures
    established by the Secretary).
        (f) Waiver Authority.--The Secretary may waive such requirements of
    titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et
    seq.; 1396 et seq.) as may be necessary for the purpose of carrying out
    the pilot program.
        (g) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section.
        (h) Definitions.--In this section:
                (1) Facility.--The term ``facility'' means a skilled
            nursing facility or a nursing facility.
                (2) Nursing facility.--The term ``nursing facility'' has
            the meaning given such term in section 1919(a) of the Social
            Security Act (42 U.S.C. 1396r(a)).
                (3) Secretary.--The term ``Secretary'' means the Secretary
            of Health and Human Services, acting through the Assistant
            Secretary for Planning and Evaluation.
                (4) Skilled nursing facility.--The term ``skilled nursing
            facility'' has the meaning given such term in section 1819(a)
            of the Social Security Act (42 U.S.C. 1395(a)).
        (i) Evaluation and Report.--
                (1) Evaluation.--The Inspector General of the Department of
            Health and Human Services shall evaluate the pilot program.
            Such evaluation shall--
                        (A) determine whether the independent monitor
                    program should be established on a permanent basis; and
                        (B) if the Inspector General determines that the
                    independent monitor program should be established on a
                    permanent basis, recommend appropriate procedures and
                    mechanisms for such establishment.
                (2) Report.--Not later than 180 days after the completion
            of the pilot program, the Inspector General shall submit to
            Congress and the Secretary a report containing the results of
            the evaluation conducted under paragraph (1), together with
            recommendations for such legislation and administrative action
            as the Inspector General determines appropriate.

    SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

        (a) Skilled Nursing Facilities.--
                (1) In general.--Section 1819(c) of the Social Security Act
            (42 U.S.C. 1395i-3(c)) is amended by adding at the end the
            following new paragraph:
                ``(7) Notification of facility closure.--
                        ``(A) In general.--Any individual who is the
                    administrator of a skilled nursing facility must--
                                ``(i) submit to the Secretary, the State
                            long-term care ombudsman, residents of the
                            facility, and the legal representatives of such
                            residents or other responsible parties, written
                            notification of an impending closure--
                                        ``(I) subject to subclause (II),
                                    not later than the date that is 60 days
                                    prior to the date of such closure; and
                                        ``(II) in the case of a facility
                                    where the Secretary terminates the
                                    facility's participation under this
                                    title, not later than the date that the
                                    Secretary determines appropriate;
                                ``(ii) ensure that the facility does not
                            admit any new residents on or after the date on
                            which such written notification is submitted;
                            and
                                ``(iii) include in the notice a plan for
                            the transfer and adequate relocation of the
                            residents of the facility by a specified date
                            prior to closure that has been approved by the
                            State, including assurances that the residents
                            will be transferred to the most appropriate
                            facility or other setting in terms of quality,
                            services, and location, taking into
                            consideration the needs and best interests of
                            each resident.
                        ``(B) Relocation.--
                                ``(i) In general.--The State shall ensure
                            that, before a facility closes, all residents
                            of the facility have been successfully
                            relocated to another facility or an alternative
                            home and community-based setting.
                                ``(ii) Continuation of payments until
                            residents relocated.--The Secretary may, as the
                            Secretary determines appropriate, continue to
                            make payments under this title with respect to
                            residents of a facility that has submitted a
                            notification under subparagraph (A) during the
                            period beginning on the date such notification
                            is submitted and ending on the date on which
                            the resident is successfully relocated.''.
                (2) Conforming amendments.--Section 1819(h)(4) of the
            Social Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
                        (A) in the first sentence, by striking ``the
                    Secretary shall terminate'' and inserting ``the
                    Secretary, subject to subsection (c)(7), shall
                    terminate''; and
                        (B) in the second sentence, by striking
                    ``subsection (c)(2)'' and inserting ``paragraphs (2)
                    and (7) of subsection (c)''.
        (b) Nursing Facilities.--
                (1) In general.--Section 1919(c) of the Social Security Act
            (42 U.S.C. 1396r(c)) is amended by adding at the end the
            following new paragraph:
                ``(9) Notification of facility closure.--
                        ``(A) In general.--Any individual who is an
                    administrator of a nursing facility must--
                                ``(i) submit to the Secretary, the State
                            long-term care ombudsman, residents of the
                            facility, and the legal representatives of such
                            residents or other responsible parties, written
                            notification of an impending closure--
                                        ``(I) subject to subclause (II),
                                    not later than the date that is 60 days
                                    prior to the date of such closure; and
                                        ``(II) in the case of a facility
                                    where the Secretary terminates the
                                    facility's participation under this
                                    title, not later than the date that the
                                    Secretary determines appropriate;
                                ``(ii) ensure that the facility does not
                            admit any new residents on or after the date on
                            which such written notification is submitted;
                            and
                                ``(iii) include in the notice a plan for
                            the transfer and adequate relocation of the
                            residents of the facility by a specified date
                            prior to closure that has been approved by the
                            State, including assurances that the residents
                            will be transferred to the most appropriate
                            facility or other setting in terms of quality,
                            services, and location, taking into
                            consideration the needs and best interests of
                            each resident.
                        ``(B) Relocation.--
                                ``(i) In general.--The State shall ensure
                            that, before a facility closes, all residents
                            of the facility have been successfully
                            relocated to another facility or an alternative
                            home and community-based setting.
                                ``(ii) Continuation of payments until
                            residents relocated.--The Secretary may, as the
                            Secretary determines appropriate, continue to
                            make payments under this title with respect to
                            residents of a facility that has submitted a
                            notification under subparagraph (A) during the
                            period beginning on the date such notification
                            is submitted and ending on the date on which
                            the resident is successfully relocated.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

                        PART 3--IMPROVING STAFF TRAINING

    SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

        (a) Skilled Nursing Facilities.--Section 1819(f)(2)(A)(i)(I) of the
    Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by
    inserting ``(including, in the case of initial training and, if the
    Secretary determines appropriate, in the case of ongoing training,
    dementia management training and resident abuse prevention training)''
    after ``curriculum''.
        (b) Nursing Facilities.--Section 1919(f)(2)(A)(i)(I) of the Social
    Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by inserting
    ``(including, in the case of initial training and, if the Secretary
    determines appropriate, in the case of ongoing training, dementia
    management training and resident abuse prevention training)'' after
    ``curriculum''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the date of the enactment of this Act.

    SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED FOR CERTIFIED NURSE
                  AIDES AND SUPERVISORY STAFF.

        (a) Study.--
                (1) In general.--The Secretary shall conduct a study on the
            content of training for certified nurse aides and supervisory
            staff of skilled nursing facilities and nursing facilities. The
            study shall include an analysis of the following:
                        (A) Whether the number of initial training hours
                    for certified nurse aides required under sections
                    1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) of the
                    Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(II);
                    1396r(f)(2)(A)(i)(II)) should be increased from 75 and,
                    if so, what the required number of initial training
                    hours should be, including any recommendations for the
                    content of such training (including training related to
                    dementia).
                        (B) Whether requirements for ongoing training under
                    such sections 1819(f)(2)(A)(i)(II) and
                    1919(f)(2)(A)(i)(II) should be increased from 12 hours
                    per year, including any recommendations for the content
                    of such training.
                (2) Consultation.--In conducting the analysis under
            paragraph (1)(A), the Secretary shall consult with States that,
            as of the date of the enactment of this Act, require more than
            75 hours of training for certified nurse aides.
                (3) Definitions.--In this section:
                        (A) Nursing facility.--The term ``nursing
                    facility'' has the meaning given such term in section
                    1919(a) of the Social Security Act (42 U.S.C.
                    1396r(a)).
                        (B) Secretary.--The term ``Secretary'' means the
                    Secretary of Health and Human Services, acting through
                    the Assistant Secretary for Planning and Evaluation.
                        (C) Skilled nursing facility.--The term ``skilled
                    nursing facility'' has the meaning given such term in
                    section 1819(a) of the Social Security Act (42 U.S.C.
                    1395(a)).
        (b) Report.--Not later than 2 years after the date of the enactment
    of this Act, the Secretary shall submit to Congress a report containing
    the results of the study conducted under subsection (a), together with
    recommendations for such legislation and administrative action as the
    Secretary determines appropriate.

                        Subtitle C--Quality Measurements

    SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR QUALITY
                  IMPROVEMENT.

        Title XI of the Social Security Act, as amended by section 1401(a),
    is further amended by adding at the end the following new part:

                         ``Part E--Quality Improvement

       ``establishment of national priorities for performance improvement

        ``Sec. 1191.  (a) Establishment of National Priorities by the
    Secretary.--The Secretary shall establish and periodically update, not
    less frequently than triennially, national priorities for performance
    improvement.
        ``(b) Recommendations for National Priorities.--In establishing and
    updating national priorities under subsection (a), the Secretary shall
    solicit and consider recommendations from multiple outside
    stakeholders.
        ``(c) Considerations in Setting National Priorities.--With respect
    to such priorities, the Secretary shall ensure that priority is given
    to areas in the delivery of health care services in the United States
    that--
                ``(1) contribute to a large burden of disease, including
            those that address the health care provided to patients with
            prevalent, high-cost chronic diseases;
                ``(2) have the greatest potential to decrease morbidity and
            mortality in this country, including those that are designed to
            eliminate harm to patients;
                ``(3) have the greatest potential for improving the
            performance, affordability, and patient-centeredness of health
            care, including those due to variations in care;
                ``(4) address health disparities across groups and areas;
            and
                ``(5) have the potential for rapid improvement due to
            existing evidence, standards of care or other reasons.
        ``(d) Definitions.--In this part:
                ``(1) Consensus-based entity.--The term `consensus-based
            entity' means an entity with a contract with the Secretary
            under section 1890.
                ``(2) Quality measure.--The term `quality measure' means a
            national consensus standard for measuring the performance and
            improvement of population health, or of institutional providers
            of services, physicians, and other health care practitioners in
            the delivery of health care services.
        ``(e) Funding.--
                ``(1) In general.--The Secretary shall provide for the
            transfer, from the Federal Hospital Insurance Trust Fund under
            section 1817 and the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 (in such proportion as the
            Secretary determines appropriate), of $2,000,000, for the
            activities under this section for each of the fiscal years 2010
            through 2014.
                ``(2) Authorization of appropriations.--For purposes of
            carrying out the provisions of this section, in addition to
            funds otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services $2,000,000 for each of the fiscal
            years 2010 through 2014.''.

    SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; GAO EVALUATION OF DATA
                  COLLECTION PROCESS FOR QUALITY MEASUREMENT.

        Part E of title XI of the Social Security Act, as added by section
    1441, is amended by adding at the end the following new sections:

    ``SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.

        ``(a) Agreements With Qualified Entities.--
                ``(1) In general.--The Secretary shall enter into
            agreements with qualified entities to develop quality measures
            for the delivery of health care services in the United States.
                ``(2) Form of agreements.--The Secretary may carry out
            paragraph (1) by contract, grant, or otherwise.
                ``(3) Recommendations of consensus-based entity.--In
            carrying out this section, the Secretary shall--
                        ``(A) seek public input; and
                        ``(B) take into consideration recommendations of
                    the consensus-based entity with a contract with the
                    Secretary under section 1890(a).
        ``(b) Determination of Areas Where Quality Measures Are Required.--
    Consistent with the national priorities established under this part and
    with the programs administered by the Centers for Medicare & Medicaid
    Services and in consultation with other relevant Federal agencies, the
    Secretary shall determine areas in which quality measures for assessing
    health care services in the United States are needed.
        ``(c) Development of Quality Measures.--
                ``(1) Patient-centered and population-based measures.--
            Quality measures developed under agreements under subsection
            (a) shall be designed--
                        ``(A) to assess outcomes and functional status of
                    patients;
                        ``(B) to assess the continuity and coordination of
                    care and care transitions for patients across providers
                    and health care settings, including end of life care;
                        ``(C) to assess patient experience and patient
                    engagement;
                        ``(D) to assess the safety, effectiveness, and
                    timeliness of care;
                        ``(E) to assess health disparities including those
                    associated with individual race, ethnicity, age,
                    gender, place of residence or language;
                        ``(F) to assess the efficiency and resource use in
                    the provision of care;
                        ``(G) to the extent feasible, to be collected as
                    part of health information technologies supporting
                    better delivery of health care services;
                        ``(H) to be available free of charge to users for
                    the use of such measures; and
                        ``(I) to assess delivery of health care services to
                    individuals regardless of age.
                ``(2) Availability of measures.--The Secretary shall make
            quality measures developed under this section available to the
            public.
                ``(3) Testing of proposed measures.--The Secretary may use
            amounts made available under subsection (f) to fund the testing
            of proposed quality measures by qualified entities. Testing
            funded under this paragraph shall include testing of the
            feasibility and usability of proposed measures.
                ``(4) Updating of endorsed measures.--The Secretary may use
            amounts made available under subsection (f) to fund the
            updating (and testing, if applicable) by consensus-based
            entities of quality measures that have been previously endorsed
            by such an entity as new evidence is developed, in a manner
            consistent with section 1890(b)(3).
        ``(d) Qualified Entities.--Before entering into agreements with a
    qualified entity, the Secretary shall ensure that the entity is a
    public, nonprofit or academic institution with technical expertise in
    the area of health quality measurement.
        ``(e) Application for Grant.--A grant may be made under this
    section only if an application for the grant is submitted to the
    Secretary and the application is in such form, is made in such manner,
    and contains such agreements, assurances, and information as the
    Secretary determines to be necessary to carry out this section.
        ``(f) Funding.--
                ``(1) In general.--The Secretary shall provide for the
            transfer, from the Federal Hospital Insurance Trust Fund under
            section 1817 and the Federal Supplementary Medical Insurance
            Trust Fund under section 1841 (in such proportion as the
            Secretary determines appropriate), of $25,000,000, to the
            Secretary for purposes of carrying out this section for each of
            the fiscal years 2010 through 2014.
                ``(2) Authorization of appropriations.--For purposes of
            carrying out the provisions of this section, in addition to
            funds otherwise available, out of any funds in the Treasury not
            otherwise appropriated, there are appropriated to the Secretary
            of Health and Human Services $25,000,000 for each of the fiscal
            years 2010 through 2014.

    ``SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROCESS FOR QUALITY
                  MEASUREMENT.

        ``(a) GAO Evaluations.--The Comptroller General of the United
    States shall conduct periodic evaluations of the implementation of the
    data collection processes for quality measures used by the Secretary.
        ``(b) Considerations.--In carrying out the evaluation under
    subsection (a), the Comptroller General shall determine--
                ``(1) whether the system for the collection of data for
            quality measures provides for validation of data as relevant
            and scientifically credible;
                ``(2) whether data collection efforts under the system use
            the most efficient and cost-effective means in a manner that
            minimizes administrative burden on persons required to collect
            data and that adequately protects the privacy of patients'
            personal health information and provides data security;
                ``(3) whether standards under the system provide for an
            appropriate opportunity for physicians and other clinicians and
            institutional providers of services to review and correct
            findings; and
                ``(4) the extent to which quality measures are consistent
            with section 1192(c)(1) or result in direct or indirect costs
            to users of such measures.
        ``(c) Report.--The Comptroller General shall submit reports to
    Congress and to the Secretary containing a description of the findings
    and conclusions of the results of each such evaluation.''.

    SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT INTO SELECTION OF
                  QUALITY MEASURES.

        Section 1808 of the Social Security Act (42 U.S.C. 1395b-9) is
    amended by adding at the end the following new subsection:
        ``(d) Multi-stakeholder Pre-rulemaking Input Into Selection of
    Quality Measures.--
                ``(1) List of measures.--Not later than December 1 before
            each year (beginning with 2011), the Secretary shall make
            public a list of measures being considered for selection for
            quality measurement by the Secretary in rulemaking with respect
            to payment systems under this title beginning in the payment
            year beginning in such year and for payment systems beginning
            in the calendar year following such year, as the case may be.
                ``(2) Consultation on selection of endorsed quality
            measures.--A consensus-based entity that has entered into a
            contract under section 1890 shall, as part of such contract,
            convene multi-stakeholder groups to provide recommendations on
            the selection of individual or composite quality measures, for
            use in reporting performance information to the public or for
            use in public health care programs.
                ``(3) Multi-stakeholder input.--Not later than February 1
            of each year (beginning with 2011), the consensus-based entity
            described in paragraph (2) shall transmit to the Secretary the
            recommendations of multi-stakeholder groups provided under
            paragraph (2). Such recommendations shall be included in the
            transmissions the consensus-based entity makes to the Secretary
            under the contract provided for under section 1890.
                ``(4) Requirement for transparency in process.--
                        ``(A) In general.--In convening multi-stakeholder
                    groups under paragraph (2) with respect to the
                    selection of quality measures, the consensus-based
                    entity described in such paragraph shall provide for an
                    open and transparent process for the activities
                    conducted pursuant to such convening.
                        ``(B) Selection of organizations participating in
                    multi-stakeholder groups.--The process under paragraph
                    (2) shall ensure that the selection of representatives
                    of multi-stakeholder groups includes provision for
                    public nominations for, and the opportunity for public
                    comment on, such selection.
                ``(5) Use of input.--The respective proposed rule shall
            contain a summary of the recommendations made by the multi-
            stakeholder groups under paragraph (2), as well as other
            comments received regarding the proposed measures, and the
            extent to which such proposed rule follows such recommendations
            and the rationale for not following such recommendations.
                ``(6) Multi-stakeholder groups.--For purposes of this
            subsection, the term `multi-stakeholder groups' means, with
            respect to a quality measure, a voluntary collaborative of
            organizations representing persons interested in or affected by
            the use of such quality measure, such as the following:
                        ``(A) Hospitals and other institutional providers.
                        ``(B) Physicians.
                        ``(C) Health care quality alliances.
                        ``(D) Nurses and other health care practitioners.
                        ``(E) Health plans.
                        ``(F) Patient advocates and consumer groups.
                        ``(G) Employers.
                        ``(H) Public and private purchasers of health care
                    items and services.
                        ``(I) Labor organizations.
                        ``(J) Relevant departments or agencies of the
                    United States.
                        ``(K) Biopharmaceutical companies and manufacturers
                    of medical devices.
                        ``(L) Licensing, credentialing, and accrediting
                    bodies.
                ``(7) Funding.--
                        ``(A) In general.--The Secretary shall provide for
                    the transfer, from the Federal Hospital Insurance Trust
                    Fund under section 1817 and the Federal Supplementary
                    Medical Insurance Trust Fund under section 1841 (in
                    such proportion as the Secretary determines
                    appropriate), of $1,000,000, to the Secretary for
                    purposes of carrying out this subsection for each of
                    the fiscal years 2010 through 2014.
                        ``(B) Authorization of appropriations.--For
                    purposes of carrying out the provisions of this
                    subsection, in addition to funds otherwise available,
                    out of any funds in the Treasury not otherwise
                    appropriated, there are appropriated to the Secretary
                    of Health and Human Services $1,000,000 for each of the
                    fiscal years 2010 through 2014.''.

    SEC. 1444. APPLICATION OF QUALITY MEASURES.

        (a) Inpatient Hospital Services.--Section 1886(b)(3)(B) of such Act
    (42 U.S.C. 1395ww(b)(3)(B)) is amended by adding at the end the
    following new clause:
        ``(x)(I) Subject to subclause (II), for purposes of reporting data
    on quality measures for inpatient hospital services furnished during
    fiscal year 2012 and each subsequent fiscal year, the quality measures
    specified under clause (viii) shall be measures selected by the
    Secretary from measures that have been endorsed by the entity with a
    contract with the Secretary under section 1890(a).
        ``(II) In the case of a specified area or medical topic determined
    appropriate by the Secretary for which a feasible and practical quality
    measure has not been endorsed by the entity with a contract under
    section 1890(a), the Secretary may specify a measure that is not so
    endorsed as long as due consideration is given to measures that have
    been endorsed or adopted by a consensus organization identified by the
    Secretary. The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (b) Outpatient Hospital Services.--Section 1833(t)(17) of such Act
    (42 U.S.C. 1395l(t)(17)) is amended by adding at the end the following
    new subparagraph:
                        ``(F) Use of endorsed quality measures.--The
                    provisions of clause (x) of section 1886(b)(3)(C) shall
                    apply to quality measures for covered OPD services
                    under this paragraph in the same manner as such
                    provisions apply to quality measures for inpatient
                    hospital services.''.
        (c) Physicians' Services.--Section 1848(k)(2)(C)(ii) of such Act
    (42 U.S.C. 1395w-4(k)(2)(C)(ii)) is amended by adding at the end the
    following: ``The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (d) Renal Dialysis Services.--Section 1881(h)(2)(B)(ii) of such Act
    (42 U.S.C. 1395rr(h)(2)(B)(ii)) is amended by adding at the end the
    following: ``The Secretary shall submit such a non-endorsed measure to
    the entity for consideration for endorsement. If the entity considers
    but does not endorse such a measure and if the Secretary does not
    phase-out use of such measure, the Secretary shall include the
    rationale for continued use of such a measure in rulemaking.''.
        (e) Endorsement of Standards.--Section 1890(b)(2) of the Social
    Security Act (42 U.S.C. 1395aaa(b)(2)) is amended by adding after and
    below subparagraph (B) the following:
            ```If the entity does not endorse a measure, such entity shall
            explain the reasons and provide suggestions about changes to
            such measure that might make it a potentially endorsable
            measure.'''.
        (f) Effective Date.--Except as otherwise provided, the amendments
    made by this section shall apply to quality measures applied for
    payment years beginning with 2012 or fiscal year 2012, as the case may
    be.

    SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.

        Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d))
    is amended by striking ``for each of fiscal years 2009 through 2012''
    and inserting ``for fiscal year 2009, and $12,000,000 for each of the
    fiscal years 2010 through 2012.''

               Subtitle D--Physician Payments Sunshine Provision

    SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BETWEEN MANUFACTURERS AND
                  DISTRIBUTORS OF COVERED DRUGS, DEVICES, BIOLOGICALS, OR
                  MEDICAL SUPPLIES UNDER MEDICARE, MEDICAID, OR CHIP AND
                  PHYSICIANS AND OTHER HEALTH CARE ENTITIES AND BETWEEN
                  PHYSICIANS AND OTHER HEALTH CARE ENTITIES.

        (a) In General.--Part A of title XI of the Social Security Act (42
    U.S.C. 1301 et seq.), as amended by section 1631(a), is further amended
    by inserting after section 1128G the following new section:

    ``SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS' FINANCIAL RELATIONSHIPS
                  WITH MANUFACTURERS AND DISTRIBUTORS OF COVERED DRUGS,
                  DEVICES, BIOLOGICALS, OR MEDICAL SUPPLIES UNDER MEDICARE,
                  MEDICAID, OR CHIP AND WITH ENTITIES THAT BILL FOR
                  SERVICES UNDER MEDICARE.

        ``(a) Reporting of Payments or Other Transfers of Value.--
                ``(1) In general.--Except as provided in this subsection,
            not later than March 31, 2011, and annually thereafter, each
            applicable manufacturer or distributor that provides a payment
            or other transfer of value to a covered recipient, or to an
            entity or individual at the request of or designated on behalf
            of a covered recipient, shall submit to the Secretary, in such
            electronic form as the Secretary shall require, the following
            information with respect to the preceding calendar year:
                        ``(A) With respect to the covered recipient, the
                    recipient's name, business address, physician
                    specialty, and national provider identifier.
                        ``(B) With respect to the payment or other transfer
                    of value, other than a drug sample--
                                ``(i) its value and date;
                                ``(ii) the name of the related drug,
                            device, or supply, if available; and
                                ``(iii) a description of its form,
                            indicated (as appropriate for all that apply)
                            as--
                                        ``(I) cash or a cash equivalent;
                                        ``(II) in-kind items or services;
                                        ``(III) stock, a stock option, or
                                    any other ownership interest, dividend,
                                    profit, or other return on investment;
                                    or
                                        ``(IV) any other form (as defined
                                    by the Secretary).
                        ``(C) With respect to a drug sample, the name,
                    number, date, and dosage units of the sample.
                ``(2) Aggregate reporting.--Information submitted by an
            applicable manufacturer or distributor under paragraph (1)
            shall include the aggregate amount of all payments or other
            transfers of value provided by the manufacturer or distributor
            to covered recipients (and to entities or individuals at the
            request of or designated on behalf of a covered recipient)
            during the year involved, including all payments and transfers
            of value regardless of whether such payments or transfer of
            value were individually disclosed.
                ``(3) Special rule for certain payments or other transfers
            of value.--In the case where an applicable manufacturer or
            distributor provides a payment or other transfer of value to an
            entity or individual at the request of or designated on behalf
            of a covered recipient, the manufacturer or distributor shall
            disclose that payment or other transfer of value under the name
            of the covered recipient.
                ``(4) Delayed reporting for payments made pursuant to
            product development agreements.--In the case of a payment or
            other transfer of value made to a covered recipient by an
            applicable manufacturer or distributor pursuant to a product
            development agreement for services furnished in connection with
            the development of a new drug, device, biological, or medical
            supply, the applicable manufacturer or distributor may report
            the value and recipient of such payment or other transfer of
            value in the first reporting period under this subsection in
            the next reporting deadline after the earlier of the following:
                        ``(A) The date of the approval or clearance of the
                    covered drug, device, biological, or medical supply by
                    the Food and Drug Administration.
                        ``(B) Two calendar years after the date such
                    payment or other transfer of value was made.
                ``(5) Delayed reporting for payments made pursuant to
            clinical investigations.--In the case of a payment or other
            transfer of value made to a covered recipient by an applicable
            manufacturer or distributor in connection with a clinical
            investigation regarding a new drug, device, biological, or
            medical supply, the applicable manufacturer or distributor may
            report as required under this section in the next reporting
            period under this subsection after the earlier of the
            following:
                        ``(A) The date that the clinical investigation is
                    registered on the website maintained by the National
                    Institutes of Health pursuant to section 671 of the
                    Food and Drug Administration Amendments Act of 2007.
                        ``(B) Two calendar years after the date such
                    payment or other transfer of value was made.
                ``(6) Confidentiality.--Information described in paragraph
            (4) or (5) shall be considered confidential and shall not be
            subject to disclosure under section 552 of title 5, United
            States Code, or any other similar Federal, State, or local law,
            until or after the date on which the information is made
            available to the public under such paragraph.
        ``(b) Reporting of Ownership Interest by Physicians in Hospitals
    and Other Entities That Bill Medicare.--Not later than March 31 of each
    year (beginning with 2011), each hospital or other health care entity
    (not including a Medicare Advantage organization) that bills the
    Secretary under part A or part B of title XVIII for services shall
    report on the ownership shares (other than ownership shares described
    in section 1877(c)) of each physician who, directly or indirectly, owns
    an interest in the entity. In this subsection, the term `physician'
    includes a physician's immediate family members (as defined for
    purposes of section 1877(a)).
        ``(c) Public Availability.--
                ``(1) In general.--The Secretary shall establish procedures
            to ensure that, not later than September 30, 2011, and on June
            30 of each year beginning thereafter, the information submitted
            under subsections (a) and (b), other than information regard
            drug samples, with respect to the preceding calendar year is
            made available through an Internet website that--
                        ``(A) is searchable and is in a format that is
                    clear and understandable;
                        ``(B) contains information that is presented by the
                    name of the applicable manufacturer or distributor, the
                    name of the covered recipient, the business address of
                    the covered recipient, the specialty (if applicable) of
                    the covered recipient, the value of the payment or
                    other transfer of value, the date on which the payment
                    or other transfer of value was provided to the covered
                    recipient, the form of the payment or other transfer of
                    value, indicated (as appropriate) under subsection
                    (a)(1)(B)(ii), the nature of the payment or other
                    transfer of value, indicated (as appropriate) under
                    subsection (a)(1)(B)(iii), and the name of the covered
                    drug, device, biological, or medical supply, as
                    applicable;
                        ``(C) contains information that is able to be
                    easily aggregated and downloaded;
                        ``(D) contains a description of any enforcement
                    actions taken to carry out this section, including any
                    penalties imposed under subsection (d), during the
                    preceding year;
                        ``(E) contains background information on industry-
                    physician relationships;
                        ``(F) in the case of information submitted with
                    respect to a payment or other transfer of value
                    described in subsection (a)(5), lists such information
                    separately from the other information submitted under
                    subsection (a) and designates such separately listed
                    information as funding for clinical research;
                        ``(G) contains any other information the Secretary
                    determines would be helpful to the average consumer;
                    and
                        ``(H) provides the covered recipient an opportunity
                    to submit corrections to the information made available
                    to the public with respect to the covered recipient.
                ``(2) Accuracy of reporting.--The accuracy of the
            information that is submitted under subsections (a) and (b) and
            made available under paragraph (1) shall be the responsibility
            of the applicable manufacturer or distributor of a covered
            drug, device, biological, or medical supply reporting under
            subsection (a) or hospital or other health care entity
            reporting physician ownership under subsection (b). The
            Secretary shall establish procedures to ensure that the covered
            recipient is provided with an opportunity to submit corrections
            to the manufacturer, distributor, hospital, or other entity
            reporting under subsection (a) or (b) with regard to
            information made public with respect to the covered recipient
            and, under such procedures, the corrections shall be
            transmitted to the Secretary.
                ``(3) Special rule for drug samples.--Information relating
            to drug samples provided under subsection (a) shall not be made
            available to the public by the Secretary but may be made
            available outside the Department of Health and Human Services
            by the Secretary for research or legitimate business purposes
            pursuant to data use agreements.
                ``(4) Special rule for national provider identifiers.--
            Information relating to national provider identifiers provided
            under subsection (a) shall not be made available to the public
            by the Secretary but may be made available outside the
            Department of Health and Human Services by the Secretary for
            research or legitimate business purposes pursuant to data use
            agreements.
        ``(d) Penalties for Noncompliance.--
                ``(1) Failure to report.--
                        ``(A) In general.--Subject to subparagraph (B),
                    except as provided in paragraph (2), any applicable
                    manufacturer or distributor that fails to submit
                    information required under subsection (a) in a timely
                    manner in accordance with regulations promulgated to
                    carry out such subsection, and any hospital or other
                    entity that fails to submit information required under
                    subsection (b) in a timely manner in accordance with
                    regulations promulgated to carry out such subsection
                    shall be subject to a civil money penalty of not less
                    than $1,000, but not more than $10,000, for each
                    payment or other transfer of value or ownership or
                    investment interest not reported as required under such
                    subsection. Such penalty shall be imposed and collected
                    in the same manner as civil money penalties under
                    subsection (a) of section 1128A are imposed and
                    collected under that section.
                        ``(B) Limitation.--The total amount of civil money
                    penalties imposed under subparagraph (A) with respect
                    to each annual submission of information under
                    subsection (a) by an applicable manufacturer or
                    distributor or other entity shall not exceed $150,000.
                ``(2) Knowing failure to report.--
                        ``(A) In general.--Subject to subparagraph (B), any
                    applicable manufacturer or distributor that knowingly
                    fails to submit information required under subsection
                    (a) in a timely manner in accordance with regulations
                    promulgated to carry out such subsection and any
                    hospital or other entity that fails to submit
                    information required under subsection (b) in a timely
                    manner in accordance with regulations promulgated to
                    carry out such subsection, shall be subject to a civil
                    money penalty of not less than $10,000, but not more
                    than $100,000, for each payment or other transfer of
                    value or ownership or investment interest not reported
                    as required under such subsection. Such penalty shall
                    be imposed and collected in the same manner as civil
                    money penalties under subsection (a) of section 1128A
                    are imposed and collected under that section.
                        ``(B) Limitation.--The total amount of civil money
                    penalties imposed under subparagraph (A) with respect
                    to each annual submission of information under
                    subsection (a) or (b) by an applicable manufacturer,
                    distributor, or entity shall not exceed $1,000,000, or,
                    if greater, 0.1 percentage of the total annual revenues
                    of the manufacturer, distributor, or entity.
                ``(3) Use of funds.--Funds collected by the Secretary as a
            result of the imposition of a civil money penalty under this
            subsection shall be used to carry out this section.
                ``(4) Enforcement through state attorneys general.--The
            attorney general of a State, after providing notice to the
            Secretary of an intent to proceed under this paragraph in a
            specific case and providing the Secretary with an opportunity
            to bring an action under this subsection and the Secretary
            declining such opportunity, may proceed under this subsection
            against a manufacturer or distributor in the State.
        ``(e) Annual Report to Congress.--Not later than April 1 of each
    year beginning with 2011, the Secretary shall submit to Congress a
    report that includes the following:
                ``(1) The information submitted under this section during
            the preceding year, aggregated for each applicable manufacturer
            or distributor of a covered drug, device, biological, or
            medical supply that submitted such information during such
            year.
                ``(2) A description of any enforcement actions taken to
            carry out this section, including any penalties imposed under
            subsection (d), during the preceding year.
        ``(f) Definitions.--In this section:
                ``(1) Applicable manufacturer; applicable distributor.--The
            term `applicable manufacturer' means a manufacturer of a
            covered drug, device, biological, or medical supply, and the
            term `applicable distributor' means a distributor of a covered
            drug, device, or medical supply.
                ``(2) Clinical investigation.--The term `clinical
            investigation' means any experiment involving one or more human
            subjects, or materials derived from human subjects, in which a
            drug or device is administered, dispensed, or used.
                ``(3) Covered drug, device, biological, or medical
            supply.--The term `covered' means, with respect to a drug,
            device, biological, or medical supply, such a drug, device,
            biological, or medical supply for which payment is available
            under title XVIII or a State plan under title XIX or XXI (or a
            waiver of such a plan).
                ``(4) Covered recipient.--The term `covered recipient'
            means the following:
                        ``(A) A physician.
                        ``(B) A physician group practice.
                        ``(C) Any other prescriber of a covered drug,
                    device, biological, or medical supply.
                        ``(D) A pharmacy or pharmacist.
                        ``(E) A health insurance issuer, group health plan,
                    or other entity offering a health benefits plan,
                    including any employee of such an issuer, plan, or
                    entity.
                        ``(F) A pharmacy benefit manager, including any
                    employee of such a manager.
                        ``(G) A hospital.
                        ``(H) A medical school.
                        ``(I) A sponsor of a continuing medical education
                    program.
                        ``(J) A patient advocacy or disease specific group.
                        ``(K) A organization of health care professionals.
                        ``(L) A biomedical researcher.
                        ``(M) A group purchasing organization.
                ``(5) Distributor of a covered drug, device, or medical
            supply.--The term `distributor of a covered drug, device, or
            medical supply' means any entity which is engaged in the
            marketing or distribution of a covered drug, device, or medical
            supply (or any subsidiary of or entity affiliated with such
            entity), but does not include a wholesale pharmaceutical
            distributor.
                ``(6) Employee.--The term `employee' has the meaning given
            such term in section 1877(h)(2).
                ``(7) Knowingly.--The term `knowingly' has the meaning
            given such term in section 3729(b) of title 31, United States
            Code.
                ``(8) Manufacturer of a covered drug, device, biological,
            or medical supply.--The term `manufacturer of a covered drug,
            device, biological, or medical supply' means any entity which
            is engaged in the production, preparation, propagation,
            compounding, conversion, processing, marketing, or distribution
            of a covered drug, device, biological, or medical supply (or
            any subsidiary of or entity affiliated with such entity).
                ``(9) Payment or other transfer of value.--
                        ``(A) In general.--The term `payment or other
                    transfer of value' means a transfer of anything of
                    value for or of any of the following:
                                ``(i) Gift, food, or entertainment.
                                ``(ii) Travel or trip.
                                ``(iii) Honoraria.
                                ``(iv) Research funding or grant.
                                ``(v) Education or conference funding.
                                ``(vi) Consulting fees.
                                ``(vii) Ownership or investment interest
                            and royalties or license fee.
                        ``(B) Inclusions.--Subject to subparagraph (C), the
                    term `payment or other transfer of value' includes any
                    compensation, gift, honorarium, speaking fee,
                    consulting fee, travel, services, dividend, profit
                    distribution, stock or stock option grant, or any
                    ownership or investment interest held by a physician in
                    a manufacturer (excluding a dividend or other profit
                    distribution from, or ownership or investment interest
                    in, a publicly traded security or mutual fund (as
                    described in section 1877(c))).
                        ``(C) Exclusions.--The term `payment or other
                    transfer of value' does not include the following:
                                ``(i) Any payment or other transfer of
                            value provided by an applicable manufacturer or
                            distributor to a covered recipient where the
                            amount transferred to, requested by, or
                            designated on behalf of the covered recipient
                            does not exceed $5.
                                ``(ii) The loan of a covered device for a
                            short-term trial period, not to exceed 90 days,
                            to permit evaluation of the covered device by
                            the covered recipient.
                                ``(iii) Items or services provided under a
                            contractual warranty, including the replacement
                            of a covered device, where the terms of the
                            warranty are set forth in the purchase or lease
                            agreement for the covered device.
                                ``(iv) A transfer of anything of value to a
                            covered recipient when the covered recipient is
                            a patient and not acting in the professional
                            capacity of a covered recipient.
                                ``(v) In-kind items used for the provision
                            of charity care.
                                ``(vi) A dividend or other profit
                            distribution from, or ownership or investment
                            interest in, a publicly traded security and
                            mutual fund (as described in section 1877(c)).
                                ``(vii) Compensation paid by a manufacturer
                            or distributor of a covered drug, device,
                            biological, or medical supply to a covered
                            recipient who is directly employed by and works
                            solely for such manufacturer or distributor.
                                ``(viii) Any discount or cash rebate.
                ``(10) Physician.--The term `physician' has the meaning
            given that term in section 1861(r). For purposes of this
            section, such term does not include a physician who is an
            employee of the applicable manufacturer that is required to
            submit information under subsection (a).
        ``(g) Annual Reports to States.--Not later than April 1 of each
    year beginning with 2011, the Secretary shall submit to States a report
    that includes a summary of the information submitted under subsections
    (a) and (d) during the preceding year with respect to covered
    recipients or other hospitals and entities in the State.
        ``(h) Relation to State Laws.--
                ``(1) In general.--Effective on January 1, 2011, subject to
            paragraph (2), the provisions of this section shall preempt any
            law or regulation of a State or of a political subdivision of a
            State that requires an applicable manufacturer and applicable
            distributor (as such terms are defined in subsection (f)) to
            disclose or report, in any format, the type of information
            (described in subsection (a)) regarding a payment or other
            transfer of value provided by the manufacturer to a covered
            recipient (as so defined).
                ``(2) No preemption of additional requirements.--Paragraph
            (1) shall not preempt any law or regulation of a State or of a
            political subdivision of a State that requires any of the
            following:
                        ``(A) The disclosure or reporting of information
                    not of the type required to be disclosed or reported
                    under this section.
                        ``(B) The disclosure or reporting, in any format,
                    of the type of information required to be disclosed or
                    reported under this section to a Federal, State, or
                    local governmental agency for public health
                    surveillance, investigation, or other public health
                    purposes or health oversight purposes.
                        ``(C) The discovery or admissibility of information
                    described in this section in a criminal, civil, or
                    administrative proceeding.''.
        (b) Availability of Information From the Disclosure of Financial
    Relationship Report (DFRR).--The Secretary of Health and Human Services
    shall submit to Congress a report on the full results of the Disclosure
    of Physician Financial Relationships surveys required pursuant to
    section 5006 of the Deficit Reduction Act of 2005. Such report shall be
    submitted to Congress not later than the date that is 6 months after
    the date such surveys are collected and shall be made publicly
    available on an Internet website of the Department of Health and Human
    Services.

       Subtitle E--Public Reporting on Health Care-Associated Infections

    SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND AMBULATORY
                  SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED INFECTIONS.

        (a) In General.--Title XI of the Social Security Act is amended by
    inserting after section 1138 the following section:

    ``SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND
                  AMBULATORY SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED
                  INFECTIONS.

        ``(a) Reporting Requirement.--
                ``(1) In general.--The Secretary shall provide that a
            hospital (as defined in subsection (g)) or ambulatory surgical
            center meeting the requirements of titles XVIII or XIX may
            participate in the programs established under such titles
            (pursuant to the applicable provisions of law, including
            sections 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in
            accordance with this section, the hospital or center reports
            such information on health care-associated infections that
            develop in the hospital or center (and such demographic
            information associated with such infections) as the Secretary
            specifies.
                ``(2) Reporting protocols.--Such information shall be
            reported in accordance with reporting protocols established by
            the Secretary through the Director of the Centers for Disease
            Control and Prevention (in this section referred to as the
            `CDC') and to the National Healthcare Safety Network of the CDC
            or under such another reporting system of such Centers as
            determined appropriate by the Secretary in consultation with
            such Director.
                ``(3) Coordination with hit.--The Secretary, through the
            Director of the CDC and the Office of the National Coordinator
            for Health Information Technology, shall ensure that the
            transmission of information under this subsection is
            coordinated with systems established under the HITECH Act,
            where appropriate.
                ``(4) Procedures to ensure the validity of information.--
            The Secretary shall establish procedures regarding the validity
            of the information submitted under this subsection in order to
            ensure that such information is appropriately compared across
            hospitals and centers. Such procedures shall address failures
            to report as well as errors in reporting.
                ``(5) Implementation.--Not later than 1 year after the date
            of enactment of this section, the Secretary, through the
            Director of CDC, shall promulgate regulations to carry out this
            section.
        ``(b) Public Posting of Information.--The Secretary shall promptly
    post, on the official public Internet site of the Department of Health
    and Human Services, the information reported under subsection (a). Such
    information shall be set forth in a manner that allows for the
    comparison of information on health care-associated infections--
                ``(1) among hospitals and ambulatory surgical centers; and
                ``(2) by demographic information.
        ``(c) Annual Report to Congress.--On an annual basis the Secretary
    shall submit to the Congress a report that summarizes each of the
    following:
                ``(1) The number and types of health care-associated
            infections reported under subsection (a) in hospitals and
            ambulatory surgical centers during such year.
                ``(2) Factors that contribute to the occurrence of such
            infections, including health care worker immunization rates.
                ``(3) Based on the most recent information available to the
            Secretary on the composition of the professional staff of
            hospitals and ambulatory surgical centers, the number of
            certified infection control professionals on the staff of
            hospitals and ambulatory surgical centers.
                ``(4) The total increases or decreases in health care costs
            that resulted from increases or decreases in the rates of
            occurrence of each such type of infection during such year.
                ``(5) Recommendations, in coordination with the Center for
            Quality Improvement established under section 931 of the Public
            Health Service Act, for best practices to eliminate the rates
            of occurrence of each such type of infection in hospitals and
            ambulatory surgical centers.
        ``(d) Non-preemption of State Laws.--Nothing in this section shall
    be construed as preempting or otherwise affecting any provision of
    State law relating to the disclosure of information on health care-
    associated infections or patient safety procedures for a hospital or
    ambulatory surgical center.
        ``(e) Health Care-associated Infection.--For purposes of this
    section:
                ``(1) In general.--The term `health care-associated
            infection' means an infection that develops in a patient who
            has received care in any institutional setting where health
            care is delivered and is related to receiving health care.
                ``(2) Related to receiving health care.--The term `related
            to receiving health care', with respect to an infection, means
            that the infection was not incubating or present at the time
            health care was provided.
        ``(f) Application to Critical Access Hospitals.--For purposes of
    this section, the term `hospital' includes a critical access hospital,
    as defined in section 1861(mm)(1).''.
        (b) Effective Date.--With respect to section 1138A of the Social
    Security Act (as inserted by subsection (a) of this section), the
    requirement under such section that hospitals and ambulatory surgical
    centers submit reports takes effect on such date (not later than 2
    years after the date of the enactment of this Act) as the Secretary of
    Health and Human Services shall specify. In order to meet such
    deadline, the Secretary may implement such section through guidance or
    other instructions.
        (c) GAO Report.--Not later than 18 months after the date of the
    enactment of this Act, the Comptroller General of the United States
    shall submit to Congress a report on the program established under
    section 1138A of the Social Security Act, as inserted by subsection
    (a). Such report shall include an analysis of the appropriateness of
    the types of information required for submission, compliance with
    reporting requirements, the success of the validity procedures
    established, and any conflict or overlap between the reporting required
    under such section and any other reporting systems mandated by either
    the States or the Federal Government.
        (d) Report on Additional Data.--Not later than 18 months after the
    date of the enactment of this Act, the Secretary of Health and Human
    Services shall submit to the Congress a report on the appropriateness
    of expanding the requirements under such section to include additional
    information (such as health care worker immunization rates), in order
    to improve health care quality and patient safety.

                  TITLE M--MEDICARE GRADUATE MEDICAL EDUCATION

    SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSITIONS.

        (a) In General.--Section 1886(h) of the Social Security Act (42
    U.S.C. 1395ww(h)) is amended--
                (1) in paragraph (4)(F)(i), by striking ``paragraph (7)''
            and inserting ``paragraphs (7) and (8)'';
                (2) in paragraph (4)(H)(i), by striking ``paragraph (7)''
            and inserting ``paragraphs (7) and (8)'';
                (3) in paragraph (7)(E), by inserting ``and paragraph (8)''
            after ``this paragraph''; and
                (4) by adding at the end the following new paragraph:
                ``(8) Additional redistribution of unused residency
            positions.--
                        ``(A) Reductions in limit based on unused
                    positions.--
                                ``(i) Programs subject to reduction.--If a
                            hospital's reference resident level (specified
                            in clause (ii)) is less than the otherwise
                            applicable resident limit (as defined in
                            subparagraph (C)(ii)), effective for portions
                            of cost reporting periods occurring on or after
                            July 1, 2011, the otherwise applicable resident
                            limit shall be reduced by 90 percent of the
                            difference between such otherwise applicable
                            resident limit and such reference resident
                            level.
                                ``(ii) Reference resident level.--
                                        ``(I) In general.--Except as
                                    otherwise provided in a subsequent
                                    subclause, the reference resident level
                                    specified in this clause for a hospital
                                    is the highest resident level for any
                                    of the 3 most recent cost reporting
                                    periods (ending before the date of the
                                    enactment of this paragraph) of the
                                    hospital for which a cost report has
                                    been settled (or, if not, submitted
                                    (subject to audit)), as determined by
                                    the Secretary.
                                        ``(II) Use of most recent
                                    accounting period to recognize
                                    expansion of existing programs.--If a
                                    hospital submits a timely request to
                                    increase its resident level due to an
                                    expansion, or planned expansion, of an
                                    existing residency training program
                                    that is not reflected on the most
                                    recent settled or submitted cost
                                    report, after audit and subject to the
                                    discretion of the Secretary, subject to
                                    subclause (IV), the reference resident
                                    level for such hospital is the resident
                                    level that includes the additional
                                    residents attributable to such
                                    expansion or establishment, as
                                    determined by the Secretary. The
                                    Secretary is authorized to determine an
                                    alternative reference resident level
                                    for a hospital that submitted to the
                                    Secretary a timely request, before the
                                    start of the 2009-2010 academic year,
                                    for an increase in its reference
                                    resident level due to a planned
                                    expansion.
                                        ``(III) Special provider
                                    agreement.--In the case of a hospital
                                    described in paragraph (4)(H)(v), the
                                    reference resident level specified in
                                    this clause is the limitation
                                    applicable under subclause (I) of such
                                    paragraph.
                                        ``(IV) Previous redistribution.--
                                    The reference resident level specified
                                    in this clause for a hospital shall be
                                    increased to the extent required to
                                    take into account an increase in
                                    resident positions made available to
                                    the hospital under paragraph (7)(B)
                                    that are not otherwise taken into
                                    account under a previous subclause.
                                ``(iii) Affiliation.--The provisions of
                            clause (i) shall be applied to hospitals which
                            are members of the same affiliated group (as
                            defined by the Secretary under paragraph
                            (4)(H)(ii)) and to the extent the hospitals can
                            demonstrate that they are filling any
                            additional  resident slots allocated to other
                            hospitals through an affiliation agreement, the
                            Secretary shall adjust the determination of
                            available slots accordingly, or which the
                            Secretary otherwise has permitted the resident
                            positions (under section 402 of the Social
                            Security Amendments of 1967) to be aggregated
                            for purposes of applying the resident position
                            limitations under this subsection.
                        ``(B) Redistribution.--
                                ``(i) In general.--The Secretary shall
                            increase the otherwise applicable resident
                            limit for each qualifying hospital that submits
                            an application under this subparagraph by such
                            number as the Secretary may approve for
                            portions of cost reporting periods occurring on
                            or after July 1, 2011. The estimated aggregate
                            number of increases in the otherwise applicable
                            resident limit under this subparagraph may not
                            exceed the Secretary's estimate of the
                            aggregate reduction in such limits attributable
                            to subparagraph (A).
                                ``(ii) Requirements for qualifying
                            hospitals.--A hospital is not a qualifying
                            hospital for purposes of this paragraph unless
                            the following requirements are met:
                                        ``(I) Maintenance of primary care
                                    resident level.--The hospital maintains
                                    the number of primary care residents at
                                    a level that is not less than the base
                                    level of primary care residents
                                    increased by the number of additional
                                    primary care resident positions
                                    provided to the hospital under this
                                    subparagraph. For purposes of this
                                    subparagraph, the `base level of
                                    primary care residents' for a hospital
                                    is the level of such residents as of a
                                    base period (specified by the
                                    Secretary), determined without regard
                                    to whether such positions were in
                                    excess of the otherwise applicable
                                    resident limit for such period but
                                    taking into account the application of
                                    subclauses (II) and (III) of
                                    subparagraph (A)(ii).
                                        ``(II) Dedicated assignment of
                                    additional resident positions to
                                    primary care.--The hospital assigns all
                                    such additional resident positions for
                                    primary care residents.
                                        ``(III) Accreditation.--The
                                    hospital's residency programs in
                                    primary care are fully accredited or,
                                    in the case of a residency training
                                    program not in operation as of the base
                                    year, the hospital is actively applying
                                    for such accreditation for the program
                                    for such additional resident positions
                                    (as determined by the Secretary).
                                ``(iii) Considerations in redistribution.--
                            In determining for which qualifying hospitals
                            the increase in the otherwise applicable
                            resident limit is provided under this
                            subparagraph, the Secretary shall take into
                            account the demonstrated likelihood of the
                            hospital filling the positions within the first
                            3 cost reporting periods beginning on or after
                            July 1, 2011, made available under this
                            subparagraph, as determined by the Secretary.
                                ``(iv) Priority for certain hospitals.--In
                            determining for which qualifying hospitals the
                            increase in the otherwise applicable resident
                            limit is provided under this subparagraph, the
                            Secretary shall distribute the increase to
                            qualifying hospitals based on the following
                            criteria:
                                        ``(I) The Secretary shall give
                                    preference to hospitals that had a
                                    reduction in resident training
                                    positions under subparagraph (A).
                                        ``(II) The Secretary shall give
                                    preference to hospitals with 3-year
                                    primary care residency training
                                    programs, such as family practice and
                                    general internal medicine.
                                        ``(III) The Secretary shall give
                                    preference to hospitals insofar as they
                                    have in effect formal arrangements (as
                                    determined by the Secretary) that place
                                    greater emphasis upon training in
                                    Federally qualified health centers,
                                    rural health clinics, and other
                                    nonprovider settings, and to hospitals
                                    that receive additional payments under
                                    subsection (d)(5)(F) and emphasize
                                    training in an outpatient department.
                                        ``(IV) The Secretary shall give
                                    preference to hospitals with a number
                                    of positions (as of July 1, 2009) in
                                    excess of the otherwise applicable
                                    resident limit for such period.
                                        ``(V) The Secretary shall give
                                    preference to hospitals that place
                                    greater emphasis upon training in a
                                    health professional shortage area
                                    (designated under section 332 of the
                                    Public Health Service Act) or a health
                                    professional needs area (designated
                                    under section 2211 of such Act).
                                        ``(VI) The Secretary shall give
                                    preference to hospitals in States that
                                    have low resident-to-population ratios
                                    (including a greater preference for
                                    those States with lower resident-to-
                                    population ratios).
                                ``(v) Limitation.--In no case shall more
                            than 20 full-time equivalent additional
                            residency positions be made available under
                            this subparagraph with respect to any hospital.
                                ``(vi) Application of per resident amounts
                            for primary care.--With respect to additional
                            residency positions in a hospital attributable
                            to the increase provided under this
                            subparagraph, the approved FTE resident amounts
                            are deemed to be equal to the hospital per
                            resident amounts for primary care and
                            nonprimary care computed under paragraph (2)(D)
                            for that hospital.
                                ``(vi) Distribution.--The Secretary shall
                            distribute the increase in resident training
                            positions to qualifying hospitals under this
                            subparagraph not later than July 1, 2011.
                        ``(C) Resident level and limit defined.--In this
                    paragraph:
                                ``(i) The term `resident level' has the
                            meaning given such term in paragraph (7)(C)(i).
                                ``(ii) The term `otherwise applicable
                            resident limit' means, with respect to a
                            hospital, the limit otherwise applicable under
                            subparagraphs (F)(i) and (H) of paragraph (4)
                            on the resident level for the hospital
                            determined without regard to this paragraph but
                            taking into account paragraph (7)(A).
                        ``(D) Maintenance of primary care resident level.--
                    In carrying out this paragraph, the Secretary shall
                    require hospitals that receive additional resident
                    positions under subparagraph (B)--
                                ``(i) to maintain records, and periodically
                            report to the Secretary, on the number of
                            primary care residents in its residency
                            training programs; and
                                ``(ii) as a condition of payment for a cost
                            reporting period under this subsection for such
                            positions, to maintain the level of such
                            positions at not less than the sum of--
                                        ``(I) the base level of primary
                                    care resident positions (as determined
                                    under subparagraph (B)(ii)(I)) before
                                    receiving such additional positions;
                                    and
                                        ``(II) the number of such
                                    additional positions.''.
        (b) IME.--
                (1) In general.--Section 1886(d)(5)(B)(v) of the Social
            Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second
            sentence, is amended--
                        (A) by striking ``subsection (h)(7)'' and inserting
                    ``subsections (h)(7) and (h)(8)''; and
                        (B) by striking ``it applies'' and inserting ``they
                    apply''.
                (2) Conforming provision.--Section 1886(d)(5)(B) of the
            Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by
            adding at the end the following clause:
        ``(x) For discharges occurring on or after July 1, 2011, insofar as
    an additional payment amount under this subparagraph is attributable to
    resident positions distributed to a hospital under subsection
    (h)(8)(B), the indirect teaching adjustment factor shall be computed in
    the same manner as provided under clause (ii) with respect to such
    resident positions.''.
        (c) Conforming Amendment.--Section 422(b)(2) of the Medicare
    Prescription Drug, Improvement, and Modernization Act of 2003 (Public
    Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that
    follows and inserting ``paragraphs (7) and (8) of subsection (h) of
    section 1886 of the Social Security Act''.

    SEC. 1502. INCREASING TRAINING IN NONPROVIDER SETTINGS.

        (a) Direct GME.--Section 1886(h)(4)(E) of the Social Security Act
    (42 U.S.C. 1395ww(h)) is amended--
                (1) by designating the first sentence as a clause (i) with
            the heading ``In general'' and appropriate indentation;
                (2) by striking ``shall be counted and that all the time''
            and inserting ``shall be counted and that--
                                        ``(I) effective for cost reporting
                                    periods beginning before July 1, 2009,
                                    all the time'';
                (3) in subclause (I), as inserted by paragraph (1), by
            striking the period at the end and inserting ``; and''; and
                        (A) by inserting after subclause (I), as so
                    inserted, the following:
                                        ``(II) effective for cost reporting
                                    periods beginning on or after July 1,
                                    2009, all the time so spent by a
                                    resident shall be counted towards the
                                    determination of full-time equivalency,
                                    without regard to the setting in which
                                    the activities are performed, if the
                                    hospital incurs the costs of the
                                    stipends and fringe benefits of the
                                    resident during the time the resident
                                    spends in that setting.
                            Any hospital claiming under this subparagraph
                            for time spent in a nonprovider setting shall
                            maintain and make available to the Secretary
                            records regarding the amount of such time and
                            such amount in comparison with amounts of such
                            time in such base year as the Secretary shall
                            specify.''.
        (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42
    U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
                (1) by striking ``(iv) Effective for discharges occurring
            on or after October 1, 1997'' and inserting ``(iv)(I) Effective
            for discharges occurring on or after October 1, 1997, and
            before July 1, 2009''; and
                (2) by inserting after subclause (I), as inserted by
            paragraph (1), the following new subclause:
                ``(II) Effective for discharges occurring on or after July
            1, 2009, all the time spent by an intern or resident in patient
            care activities at an entity in a nonprovider setting shall be
            counted towards the determination of full-time equivalency if
            the hospital incurs the costs of the stipends and fringe
            benefits of the intern or resident during the time the intern
            or resident spends in that setting.''.
        (c) OIG Study on Impact on Training.--The Inspector General of the
    Department of Health and Human Services shall analyze the data
    collected by the Secretary of Health and Human Services from the
    records made available to the Secretary under section 1886(h)(4)(E) of
    the Social Security Act, as amended by subsection (a), in order to
    assess the extent to which there is an increase in time spent by
    medical residents in training in nonprovider settings as a result of
    the amendments made by this section. Not later than 4 years after the
    date of the enactment of this Act, the Inspector General shall submit a
    report to Congress on such analysis and assessment.
        (d) Demonstration Project for Approved Teaching Health Centers.--
                (1) In general.--The Secretary of Health and Human Services
            shall conduct a demonstration project under which an approved
            teaching health center (as defined in paragraph (3)) would be
            eligible for payment under subsections (h) and (k) of section
            1886 of the Social Security Act (42 U.S.C. 1395ww) of amounts
            for its own direct costs of graduate medical education
            activities for primary care residents, as well as for the
            direct costs of graduate medical education activities of its
            contracting hospital for such residents, in a manner similar to
            the manner in which such payments would be made to a hospital
            if the hospital were to operate such a program.
                (2) Conditions.--Under the demonstration project--
                        (A) an approved teaching health center shall
                    contract with an accredited teaching hospital to carry
                    out the inpatient responsibilities of the primary care
                    residency program of the hospital involved and is
                    responsible for payment to the hospital for the
                    hospital's costs of the salary and fringe benefits for
                    residents in the program;
                        (B) the number of primary care residents of the
                    center shall not count against the contracting
                    hospital's resident limit; and
                        (C) the contracting hospital shall agree not to
                    diminish the number of residents in its primary care
                    residency training program.
                (3) Approved teaching health center defined.--In this
            subsection, the term ``approved teaching health center'' means
            a nonprovider setting, such as a Federally qualified health
            center or rural health clinic (as defined in section 1861(aa)
            of the Social Security Act), that develops and operates an
            accredited primary care residency program for which funding
            would be available if it were operated by a hospital.

    SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY
                  ACTIVITIES AND OTHER ACTIVITIES.

        (a) Direct GME.--Section 1886(h) of the Social Security Act (42
    U.S.C. 1395ww(h)) is amended--
                (1) in paragraph (4)(E), as amended by section 1502(a)--
                        (A) in clause (i), by striking ``Such rules'' and
                    inserting ``Subject to clause (ii), such rules''; and
                        (B) by adding at the end the following new clause:
                                ``(ii) Treatment of certain nonprovider and
                            didactic activities.--Such rules shall provide
                            that all time spent by an intern or resident in
                            an approved medical residency training program
                            in a nonprovider setting that is primarily
                            engaged in furnishing patient care (as defined
                            in paragraph (5)(K)) in nonpatient care
                            activities, such as didactic conferences and
                            seminars, but not including research not
                            associated with the treatment or diagnosis of a
                            particular patient, as such time and activities
                            are defined by the Secretary, shall be counted
                            toward the determination of full-time
                            equivalency.'';
                (2) in paragraph (4), by adding at the end the following
            new subparagraph:
                        ``(I) In determining the hospital's number of full-
                    time equivalent residents for purposes of this
                    subsection, all the time that is spent by an intern or
                    resident in an approved medical residency training
                    program on vacation, sick leave, or other approved
                    leave, as such time is defined by the Secretary, and
                    that does not prolong the total time the resident is
                    participating in the approved program beyond the normal
                    duration of the program shall be counted toward the
                    determination of full-time equivalency.''; and
                (3) in paragraph (5), by adding at the end the following
            new subparagraph:
                        ``(K) Nonprovider setting that is primarily engaged
                    in furnishing patient care.--The term `nonprovider
                    setting that is primarily engaged in furnishing patient
                    care' means a nonprovider setting in which the primary
                    activity is the care and treatment of patients, as
                    defined by the Secretary.''.
        (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42
    U.S.C. 1395ww(d)(5)(B)), as amended by section 1501(b), is amended by
    adding at the end the following new clause:
        ``(xi)(I) The provisions of subparagraph (I) of subsection (h)(4)
    shall apply under this subparagraph in the same manner as they apply
    under such subsection.
        ``(II) In determining the hospital's number of full-time equivalent
    residents for purposes of this subparagraph, all the time spent by an
    intern or resident in an approved medical residency training program in
    nonpatient care activities, such as didactic conferences and seminars,
    as such time and activities are defined by the Secretary, that occurs
    in the hospital shall be counted toward the determination of full-time
    equivalency if the hospital--
                ``(aa) is recognized as a subsection (d) hospital;
                ``(bb) is recognized as a subsection (d) Puerto Rico
            hospital;
                ``(cc) is reimbursed under a reimbursement system
            authorized under section 1814(b)(3); or
                ``(dd) is a provider-based hospital outpatient department.
        ``(III) In determining the hospital's number of full-time
    equivalent residents for purposes of this subparagraph, all the time
    spent by an intern or resident in an approved medical residency
    training program in research activities that are not associated with
    the treatment or diagnosis of a particular patient, as such time and
    activities are defined by the Secretary, shall not be counted toward
    the determination of full-time equivalency.''.
        (c) Effective Dates; Application.--
                (1) In general.--Except as otherwise provided, the
            Secretary of Health and Human Services shall implement the
            amendments made by this section in a manner so as to apply to
            cost reporting periods beginning on or after January 1, 1983.
                (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social
            Security Act, as added by subsection (a)(1)(B), shall apply to
            cost reporting periods beginning on or after July 1, 2008.
                (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social
            Security Act, as added by subsection (b), shall apply to cost
            reporting periods beginning on or after October 1, 2001. Such
            section, as so added, shall not give rise to any inference on
            how the law in effect prior to such date should be interpreted.
                (4) Application.--The amendments made by this section shall
            not be applied in a manner that requires reopening of any
            settled hospital cost reports as to which there is not a
            jurisdictionally proper appeal pending as of the date of the
            enactment of this Act on the issue of payment for indirect
            costs of medical education under section 1886(d)(5)(B) of the
            Social Security Act or for direct graduate medical education
            costs under section 1886(h) of such Act.

    SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED
                  HOSPITALS.

        (a) Direct GME.--Section 1886(h)(4)(H) of the Social Security Act
    (42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the
    following new clause:
                                ``(vi) Redistribution of residency slots
                            after a hospital closes.--
                                        ``(I) In general.--The Secretary
                                    shall, by regulation, establish a
                                    process consistent with subclauses (II)
                                    and (III) under which, in the case
                                    where a hospital (other than a hospital
                                    described in clause (v)) with an
                                    approved medical residency program in a
                                    State closes on or after the date that
                                    is 2 years before the date of the
                                    enactment of this clause, the Secretary
                                    shall increase the otherwise applicable
                                    resident limit under this paragraph for
                                    other hospitals in the State in
                                    accordance with this clause.
                                        ``(II) Process for hospitals in
                                    certain areas.--In determining for
                                    which hospitals the increase in the
                                    otherwise applicable resident limit
                                    described in subclause (I) is provided,
                                    the Secretary shall establish a process
                                    to provide for such increase to one or
                                    more hospitals located in the State.
                                    Such process shall take into
                                    consideration the recommendations
                                    submitted to the Secretary by the
                                    senior health official (as designated
                                    by the chief executive officer of such
                                    State) if such recommendations are
                                    submitted not later than 180 days after
                                    the date of the hospital closure
                                    involved (or, in the case of a hospital
                                    that closed after the date that is 2
                                    years before the date of the enactment
                                    of this clause, 180 days after such
                                    date of enactment).
                                        ``(III) Limitation.--The estimated
                                    aggregate number of increases in the
                                    otherwise applicable resident limits
                                    for hospitals under this clause shall
                                    be equal to the estimated number of
                                    resident positions in the approved
                                    medical residency programs that closed
                                    on or after the date described in
                                    subclause (I).''.
        (b) No Effect on Temporary FTE Cap Adjustments.--The amendments
    made by this section shall not effect any temporary adjustment to a
    hospital's FTE cap under section 413.79(h) of title 42, Code of Federal
    Regulations (as in effect on the date of enactment of this Act) and
    shall not affect the application of section 1886(h)(4)(H)(v) of the
    Social Security Act.
        (c) Conforming Amendments.--
                (1) Section 422(b)(2) of the Medicare Prescription Drug,
            Improvement, and Modernization Act of 2003 (Public Law 108-
            173), as amended by section 1501(c), is amended by striking
            ``(7) and'' and inserting ``(4)(H)(vi), (7), and''.
                (2) Section 1886(h)(7)(E) of the Social Security Act (42
            U.S.C. 1395ww(h)(7)(E)) is amended by inserting ``or under
            paragraph (4)(H)(vi)'' after ``under this paragraph''.

    SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED MEDICAL RESIDENCY
                  TRAINING.

        (a) Specification of Goals for Approved Medical Residency Training
    Programs.--Section 1886(h)(1) of the Social Security Act (42 U.S.C.
    1395ww(h)(1)) is amended--
                (1) by designating the matter beginning with
            ``Notwithstanding'' as a subparagraph (A) with the heading ``In
            general.--'' and with appropriate indentation; and
                (2) by adding at the end the following new paragraph:
                        ``(B) Goals and accountability for approved medical
                    residency training programs.--The goals of medical
                    residency training programs are to foster a physician
                    workforce so that physicians are trained to be able to
                    do the following:
                                ``(i) Work effectively in various health
                            care delivery settings, such as nonprovider
                            settings.
                                ``(ii) Coordinate patient care within and
                            across settings relevant to their specialties.
                                ``(iii) Understand the relevant cost and
                            value of various diagnostic and treatment
                            options.
                                ``(iv) Work in inter-professional teams and
                            multi-disciplinary team-based models in
                            provider and nonprovider settings to enhance
                            safety and improve quality of patient care.
                                ``(v) Be knowledgeable in methods of
                            identifying systematic errors in health care
                            delivery and in implementing systematic
                            solutions in case of such errors, including
                            experience and participation in continuous
                            quality improvement projects to improve health
                            outcomes of the population the physicians
                            serve.
                                ``(vi) Be meaningful EHR users (as
                            determined under section 1848(o)(2)) in the
                            delivery of care and in improving the quality
                            of the health of the community and the
                            individuals that the hospital serves.''
        (b) GAO Study on Evaluation of Training Programs.--
                (1) In general.--The Comptroller General of the United
            States shall conduct a study to evaluate the extent to which
            medical residency training programs--
                        (A) are meeting the goals described in section
                    1886(h)(1)(B) of the Social Security Act, as added by
                    subsection (a), in a range of residency programs,
                    including primary care and other specialties; and
                        (B) have the appropriate faculty expertise to teach
                    the topics required to achieve such goals.
                (2) Report.--Not later than 18 months after the date of the
            enactment of this Act, the Comptroller General shall submit to
            Congress a report on such study and shall include in such
            report recommendations as to how medical residency training
            programs could be further encouraged to meet such goals through
            means such as--
                        (A) development of curriculum requirements; and
                        (B) assessment of the accreditation processes of
                    the Accreditation Council for Graduate Medical
                    Education and the American Osteopathic Association and
                    effectiveness of those processes in accrediting medical
                    residency programs that meet the goals referred to in
                    paragraph (1)(A).

                           TITLE N--PROGRAM INTEGRITY

         Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse

    SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO FIGHT FRAUD AND ABUSE.

        (a) In General.--Section 1817(k) of the Social Security Act (42
    U.S.C. 1395i(k)) is amended--
                (1) by adding at the end the following new paragraph:
                ``(7) Additional funding.--In addition to the funds
            otherwise appropriated to the Account from the Trust Fund under
            paragraphs (3) and (4) and for purposes described in paragraphs
            (3)(C) and (4)(A), there are hereby appropriated an additional
            $100,000,000 to such Account from such Trust Fund for each
            fiscal year beginning with 2011. The funds appropriated under
            this paragraph shall be allocated in the same proportion as the
            total funding appropriated with respect to paragraphs (3)(A)
            and (4)(A) was allocated with respect to fiscal year 2010, and
            shall be available without further appropriation until
            expended.''.
                (2) in paragraph (4)(A)--
                        (A) by inserting ``for activities described in
                    paragraph (3)(C) and'' after ``necessary''; and
                        (B) by inserting ``until expended'' after
                    ``appropriation''.
        (b) Flexibility in Pursuing Fraud and Abuse.--Section 1893(a) of
    the Social Security Act (42 U.S.C. 1395ddd(a)) is amended by inserting
    ``, or otherwise,'' after ``entities''.

               Subtitle B--Enhanced Penalties for Fraud and Abuse

    SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS ON PROVIDER OR
                  SUPPLIER ENROLLMENT APPLICATIONS.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)) is amended--
                (1) in paragraph (1)(D), by striking all that follows ``in
            which the person was excluded'' and inserting ``under Federal
            law from the Federal health care program under which the claim
            was made, or'';
                (2) by striking ``or'' at the end of paragraph (6);
                (3) in paragraph (7), by inserting at the end ``or'';
                (4) by inserting after paragraph (7) the following new
            paragraph:
                ``(8) knowingly makes or causes to be made any false
            statement, omission, or misrepresentation of a material fact in
            any application, agreement, bid, or contract to participate or
            enroll as a provider of services or supplier under a Federal
            health care program, including managed care organizations under
            title XIX, Medicare Advantage organizations under part C of
            title XVIII, prescription drug plan sponsors under part D of
            title XVIII, and entities that apply to participate as
            providers of services or suppliers in such managed care
            organizations and such plans;'';
                (5) in the matter following paragraph (8), as inserted by
            paragraph (4), by striking ``or in cases under paragraph (7),
            $50,000 for each such act)'' and inserting ``in cases under
            paragraph (7), $50,000 for each such act, or in cases under
            paragraph (8), $50,000 for each false statement, omission, or
            misrepresentation of a material fact)''; and
                (6) in the second sentence, by striking ``for a lawful
            purpose)'' and inserting ``for a lawful purpose, or in cases
            under paragraph (8), an assessment of not more than 3 times the
            amount claimed as the result of the false statement, omission,
            or misrepresentation of material fact claimed by a provider of
            services or supplier whose application to participate contained
            such false statement, omission, or misrepresentation)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to acts committed on or after January 1, 2010.

    SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF FALSE STATEMENTS
                  MATERIAL TO A FALSE CLAIM.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by section 1611, is further amended--
                (1) in paragraph (7), by striking ``or'' at the end;
                (2) in paragraph (8), by inserting ``or'' at the end; and
                (3) by inserting after paragraph (8), the following new
            paragraph:
                ``(9) knowingly makes, uses, or causes to be made or used,
            a false record or statement material to a false or fraudulent
            claim for payment for items and services furnished under a
            Federal health care program;''; and
                (4) in the matter following paragraph (9), as inserted by
            paragraph (3)--
                        (A) by striking ``or in cases under paragraph (8)''
                    and inserting ``in cases under paragraph (8)''; and
                        (B) by striking ``a material fact)'' and inserting
                    ``a material fact, in cases under paragraph (9),
                    $50,000 for each false record or statement)''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to acts committed on or after January 1, 2010.

    SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPECTIONS.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by sections 1611 and 1612, is further
    amended--
                (1) in paragraph (8), by striking ``or'' at the end;
                (2) in paragraph (9), by inserting ``or'' at the end;
                (3) by inserting after paragraph (9) the following new
            paragraph:
                ``(10) fails to grant timely access, upon reasonable
            request (as defined by the Secretary in regulations), to the
            Inspector General of the Department of Health and Human
            Services, for the purpose of audits, investigations,
            evaluations, or other statutory functions of the Inspector
            General of the Department of Health and Human Services;''; and
                (4) in the matter following paragraph (10), as inserted by
            paragraph (3)--
                        (A) by striking ``or'' after ``$50,000 for each
                    such act,''; and
                        (B) by inserting ``, or in cases under paragraph
                    (10), $15,000 for each day of the failure described in
                    such paragraph'' after ``false record or statement''.
        (b) Ensuring Timely Inspections Relating to Contracts With MA
    Organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 1395w-
    27(d)(2)) is amended--
                (1) in subparagraph (A), by inserting ``timely'' before
            ``inspect''; and
                (2) in subparagraph (B), by inserting ``timely'' before
            ``audit and inspect''.
        (c) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.

        (a) Medicare.--Part A of title XVIII of the Social Security Act is
    amended by inserting after section 1819 the following new section:

    ``SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE CARE.

        ``(a) In General.--If the Secretary determines on the basis of a
    survey or otherwise, that a hospice program that is certified for
    participation under this title has demonstrated a substandard quality
    of care and failed to meet such other requirements as the Secretary may
    find necessary in the interest of the health and safety of the
    individuals who are provided care and services by the agency or
    organization involved and determines--
                ``(1) that the deficiencies involved immediately jeopardize
            the health and safety of the individuals to whom the program
            furnishes items and services, the Secretary shall take
            immediate action to remove the jeopardy and correct the
            deficiencies through the remedy specified in subsection
            (b)(2)(A)(iii) or terminate the certification of the program,
            and may provide, in addition, for 1 or more of the other
            remedies described in subsection (b)(2)(A); or
                ``(2) that the deficiencies involved do not immediately
            jeopardize the health and safety of the individuals to whom the
            program furnishes items and services, the Secretary may--
                        ``(A) impose intermediate sanctions developed
                    pursuant to subsection (b), in lieu of terminating the
                    certification of the program; and
                        ``(B) if, after such a period of intermediate
                    sanctions, the program is still not in compliance with
                    such requirements, the Secretary shall terminate the
                    certification of the program.
            If the Secretary determines that a hospice program that is
            certified for participation under this title is in compliance
            with such requirements but, as of a previous period, was not in
            compliance with such requirements, the Secretary may provide
            for a civil money penalty under subsection (b)(2)(A)(i) for the
            days in which it finds that the program was not in compliance
            with such requirements.
        ``(b) Intermediate Sanctions.--
                ``(1) Development and implementation.--The Secretary shall
            develop and implement, by not later than July 1, 2012--
                        ``(A) a range of intermediate sanctions to apply to
                    hospice programs under the conditions described in
                    subsection (a), and
                        ``(B) appropriate procedures for appealing
                    determinations relating to the imposition of such
                    sanctions.
                ``(2) Specified sanctions.--
                        ``(A) In general.--The intermediate sanctions
                    developed under paragraph (1) may include--
                                ``(i) civil money penalties in an amount
                            not to exceed $10,000 for each day of
                            noncompliance or, in the case of a per instance
                            penalty applied by the Secretary, not to exceed
                            $25,000,
                                ``(ii) denial of all or part of the
                            payments to which a hospice program would
                            otherwise be entitled under this title with
                            respect to items and services furnished by a
                            hospice program on or after the date on which
                            the Secretary determines that intermediate
                            sanctions should be imposed pursuant to
                            subsection (a)(2),
                                ``(iii) the appointment of temporary
                            management to oversee the operation of the
                            hospice program and to protect and assure the
                            health and safety of the individuals under the
                            care of the program while improvements are
                            made,
                                ``(iv) corrective action plans, and
                                ``(v) in-service training for staff.
                    The provisions of section 1128A (other than subsections
                    (a) and (b)) shall apply to a civil money penalty under
                    clause (i) in the same manner as such provisions apply
                    to a penalty or proceeding under section 1128A(a). The
                    temporary management under clause (iii) shall not be
                    terminated until the Secretary has determined that the
                    program has the management capability to ensure
                    continued compliance with all requirements referred to
                    in that clause.
                        ``(B) Clarification.--The sanctions specified in
                    subparagraph (A) are in addition to sanctions otherwise
                    available under State or Federal law and shall not be
                    construed as limiting other remedies, including any
                    remedy available to an individual at common law.
                        ``(C) Commencement of payment.--A denial of payment
                    under subparagraph (A)(ii) shall terminate when the
                    Secretary determines that the hospice program no longer
                    demonstrates a substandard quality of care and meets
                    such other requirements as the Secretary may find
                    necessary in the interest of the health and safety of
                    the individuals who are provided care and services by
                    the agency or organization involved.
                ``(3) Secretarial authority.--The Secretary shall develop
            and implement, by not later than July 1, 2011, specific
            procedures with respect to the conditions under which each of
            the intermediate sanctions developed under paragraph (1) is to
            be applied, including the amount of any fines and the severity
            of each of these sanctions. Such procedures shall be designed
            so as to minimize the time between identification of
            deficiencies and imposition of these sanctions and shall
            provide for the imposition of incrementally more severe fines
            for repeated or uncorrected deficiencies.''.
        (b) Application to Medicaid.--Section 1905(o) of the Social
    Security Act (42 U.S.C. 1396d(o)) is amended by adding at the end the
    following new paragraph:
        ``(4) The provisions of section 1819A shall apply to a hospice
    program providing hospice care under this title in the same manner as
    such provisions apply to a hospice program providing hospice care under
    title XVIII.''.
        (c) Application to CHIP.--Title XXI of the Social Security Act is
    amended by adding at the end the following new section:

    ``SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE.

        ``The provisions of section 1819A shall apply to a hospice program
    providing hospice care under this title in the same manner such
    provisions apply to a hospice program providing hospice care under
    title XVIII.''.

    SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EXCLUDED FROM PROGRAM
                  PARTICIPATION.

        (a) In General.--Section 1128A(a) of the Social Security Act (42
    U.S.C. 1320a-7a(a)), as amended by the previous sections, is further
    amended--
                (1) by striking ``or'' at the end of paragraph (9);
                (2) by inserting ``or'' at the end of paragraph (10);
                (3) by inserting after paragraph (10) the following new
            paragraph:
                ``(11) orders or prescribes an item or service, including
            without limitation home health care, diagnostic and clinical
            lab tests, prescription drugs, durable medical equipment,
            ambulance services, physical or occupational therapy, or any
            other item or service, during a period when the person has been
            excluded from participation in a Federal health care program,
            and the person knows or should know that a claim for such item
            or service will be presented to such a program;''; and
                (4) in the matter following paragraph (11), as inserted by
            paragraph (2), by striking ``$15,000 for each day of the
            failure described in such paragraph'' and inserting ``$15,000
            for each day of the failure described in such paragraph, or in
            cases under paragraph (11), $50,000 for each order or
            prescription for an item or service by an excluded
            individual''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF FALSE INFORMATION BY
                  MEDICARE ADVANTAGE AND PART D PLANS.

        (a) In General.--Section 1857(g)(2)(A) of the Social Security Act
    (42 U.S.C. 1395w-27(g)(2)(A)) is amended by inserting ``except with
    respect to a determination under subparagraph (E), an assessment of not
    more than 3 times the amount claimed by such plan or plan sponsor based
    upon the misrepresentation or falsified information involved,'' after
    ``for each such determination,''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVANTAGE AND PART D
                  MARKETING VIOLATIONS.

        (a) In General.--Section 1857(g)(1) of the Social Security Act (42
    U.S.C. 1395w-27(g)(1)), as amended by section 1221(b), is amended--
                (1) in subparagraph (G), by striking ``or'' at the end;
                (2) by inserting after subparagraph (H) the following new
            subparagraphs:
                        ``(I) except as provided under subparagraph (C) or
                    (D) of section 1860D-1(b)(1), enrolls an individual in
                    any plan under this part without the prior consent of
                    the individual or the designee of the individual;
                        ``(J) transfers an individual enrolled under this
                    part from one plan to another without the prior consent
                    of the individual or the designee of the individual or
                    solely for the purpose of earning a commission;
                        ``(K) fails to comply with marketing restrictions
                    described in subsections (h) and (j) of section 1851 or
                    applicable implementing regulations or guidance; or
                        ``(L) employs or contracts with any individual or
                    entity who engages in the conduct described in
                    subparagraphs (A) through (K) of this paragraph;''; and
                (3) by adding at the end the following new sentence: ``The
            Secretary may provide, in addition to any other remedies
            authorized by law, for any of the remedies described in
            paragraph (2), if the Secretary determines that any employee or
            agent of such organization, or any provider or supplier who
            contracts with such organization, has engaged in any conduct
            described in subparagraphs (A) through (L) of this paragraph.''
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF PROGRAM AUDITS.

        (a) In General.--Section 1128(b)(2) of the Social Security Act (42
    U.S.C. 1320a-7(b)(2)) is amended--
                (1) in the heading, by inserting ``or audit'' after
            ``investigation''; and
                (2) by striking ``investigation into'' and all that follows
            through the period and inserting ``investigation or audit
            related to--''
                                ``(i) any offense described in paragraph
                            (1) or in subsection (a); or
                                ``(ii) the use of funds received, directly
                            or indirectly, from any Federal health care
                            program (as defined in section 1128B(f)).''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to violations committed on or after January 1, 2010.

    SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM
                  PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS.

        (a) In General.--Section 1128(c) of the Social Security Act, as
    previously amended by this subdivision, is further amended--
                (1) in the heading, by striking ``and Period'' and
            inserting ``, Period, and Effect''; and
                (2) by adding at the end the following new paragraph:
                ``(4)(A) For purposes of this Act, subject to subparagraph
            (C), the effect of exclusion is that no payment may be made by
            any Federal health care program (as defined in section
            1128B(f)) with respect to any item or service furnished--
                        ``(i) by an excluded individual or entity; or
                        ``(ii) at the medical direction or on the
                    prescription of a physician or other authorized
                    individual when the person submitting a claim for such
                    item or service knew or had reason to know of the
                    exclusion of such individual.
                ``(B) For purposes of this section and sections 1128A and
            1128B, subject to subparagraph (C), an item or service has been
            furnished by an individual or entity if the individual or
            entity directly or indirectly provided, ordered, manufactured,
            distributed, prescribed, or otherwise supplied the item or
            service regardless of how the item or service was paid for by a
            Federal health care program or to whom such payment was made.
                ``(C)(i) Payment may be made under a Federal health care
            program for emergency items or services (not including items or
            services furnished in an emergency room of a hospital)
            furnished by an excluded individual or entity, or at the
            medical direction or on the prescription of an excluded
            physician or other authorized individual during the period of
            such individual's exclusion.
                ``(ii) In the case that an individual eligible for benefits
            under title XVIII or XIX submits a claim for payment for items
            or services furnished by an excluded individual or entity, and
            such individual eligible for such benefits did not know or have
            reason to know that such excluded individual or entity was so
            excluded, then, notwithstanding such exclusion, payment shall
            be made for such items or services. In such case the Secretary
            shall notify such individual eligible for such benefits of the
            exclusion of the individual or entity furnishing the items or
            services. Payment shall not be made for items or services
            furnished by an excluded individual or entity to an individual
            eligible for such benefits after a reasonable time (as
            determined by the Secretary in regulations) after the Secretary
            has notified the individual eligible for such benefits of the
            exclusion of the individual or entity furnishing the items or
            services.
                ``(iii) In the case that a claim for payment for items or
            services furnished by an excluded individual or entity is
            submitted by an individual or entity other than an individual
            eligible for benefits under title XVIII or XIX or the excluded
            individual or entity, and the Secretary determines that the
            individual or entity that submitted the claim took reasonable
            steps to learn of the exclusion and reasonably relied upon
            inaccurate or misleading information from the relevant Federal
            health care program or its contractor, the Secretary may waive
            repayment of the amount paid in violation of the exclusion to
            the individual or entity that submitted the claim for the items
            or services furnished by the excluded individual or entity. If
            a Federal health care program contractor provided inaccurate or
            misleading information that resulted in the waiver of an
            overpayment under this clause, the Secretary shall take
            appropriate action to recover the improperly paid amount from
            the contractor.''.

             Subtitle C--Enhanced Program and Provider Protections

    SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

        (a) In General.--Title XI of the Social Security Act (42 U.S.C.
    1301 et seq.) is amended by inserting after section 1128F the following
    new section:

    ``SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PROTECTIONS IN THE
                  MEDICARE, MEDICAID, AND CHIP PROGRAMS.

        ``(a) Certain Authorized Screening, Enhanced Oversight Periods, and
    Enrollment Moratoria.--
                ``(1) In general.--For periods beginning after January 1,
            2011, in the case that the Secretary determines there is a
            significant risk of fraudulent activity (as determined by the
            Secretary based on relevant complaints, reports, referrals by
            law enforcement or other sources, data analysis, trending
            information, or claims submissions by providers of services and
            suppliers) with respect to a category of provider of services
            or supplier of items or services, including a category within a
            geographic area, under title XVIII, XIX, or XXI, the Secretary
            may impose any of the following requirements with respect to a
            provider of services or a supplier (whether such provider or
            supplier is initially enrolling in the program or is renewing
            such enrollment):
                        ``(A) Screening under paragraph (2).
                        ``(B) Enhanced oversight periods under paragraph
                    (3).
                        ``(C) Enrollment moratoria under paragraph (4).
            In applying this subsection for purposes of title XIX and XXI
            the Secretary may require a State to carry out the provisions
            of this subsection as a requirement of the State plan under
            title XIX or the child health plan under title XXI. Actions
            taken and determinations made under this subsection shall not
            be subject to review by a judicial tribunal.
                ``(2) Screening.--For purposes of paragraph (1), the
            Secretary shall establish procedures under which screening is
            conducted with respect to providers of services and suppliers
            described in such paragraph. Such screening may include--
                        ``(A) licensing board checks;
                        ``(B) screening against the list of individuals and
                    entities excluded from the program under title XVIII,
                    XIX, or XXI;
                        ``(C) the excluded provider list system;
                        ``(D) background checks; and
                        ``(E) unannounced pre-enrollment or other site
                    visits.
                ``(3) Enhanced oversight period.--For purposes of paragraph
            (1), the Secretary shall establish procedures to provide for a
            period of not less than 30 days and not more than 365 days
            during which providers of services and suppliers described in
            such paragraph, as the Secretary determines appropriate, would
            be subject to enhanced oversight, such as required or
            unannounced (or required and unannounced) site visits or
            inspections, prepayment review, enhanced review of claims, and
            such other actions as specified by the Secretary, under the
            programs under titles XVIII, XIX, and XXI. Under such
            procedures, the Secretary may extend such period for more than
            365 days if the Secretary determines that after the initial
            period such additional period of oversight is necessary.
                ``(4) Moratorium on enrollment of providers and
            suppliers.--For purposes of paragraph (1), the Secretary, based
            upon a finding of a risk of serious ongoing fraud within a
            program under title XVIII, XIX, or XXI, may impose a moratorium
            on the enrollment of providers of services and suppliers within
            a category of providers of services and suppliers (including a
            category within a specific geographic area) under such title.
            Such a moratorium may only be imposed if the Secretary makes a
            determination that the moratorium would not adversely impact
            access of individuals to care under such program.
                ``(5) Clarification.--Nothing in this subsection shall be
            interpreted to preclude or limit the ability of a State to
            engage in provider screening or enhanced provider oversight
            activities beyond those required by the Secretary.''.
        (b) Conforming Amendments.--
                (1) Medicaid.--Section 1902(a) of the Social Security Act
            (42 U.S.C. 42 U.S.C. 1396a(a)) is amended--
                        (A) in paragraph (23), by inserting before the
                    semicolon at the end the following: ``or by a person to
                    whom or entity to which a moratorium under section
                    1128G(a)(4) is applied during the period of such
                    moratorium'';
                        (B) in paragraph (72); by striking at the end
                    ``and'';
                        (C) in paragraph (73), by striking the period at
                    the end and inserting ``and''; and
                        (D) by adding after paragraph (73) the following
                    new paragraph:
                ``(74) provide that the State will enforce any
            determination made by the Secretary under subsection (a) of
            section 1128G (relating to a significant risk of fraudulent
            activity with respect to a category of provider or supplier
            described in such subsection (a) through use of the appropriate
            procedures described in such subsection (a)), and that the
            State will carry out any activities as required by the
            Secretary for purposes of such subsection (a).''.
                (2) CHIP.--Section 2102 of such Act (42 U.S.C. 1397bb) is
            amended by adding at the end the following new subsection:
        ``(d) Program Integrity.--A State child health plan shall include a
    description of the procedures to be used by the State--
                ``(1) to enforce any determination made by the Secretary
            under subsection (a) of section 1128G (relating to a
            significant risk of fraudulent activity with respect to a
            category of provider or supplier described in such subsection
            through use of the appropriate procedures described in such
            subsection); and
                ``(2) to carry out any activities as required by the
            Secretary for purposes of such subsection.''.
                (3) Medicare.--Section 1866(j) of such Act (42 U.S.C.
            1395cc(j)) is amended by adding at the end the following new
            paragraph:
                ``(3) Program integrity.--The provisions of section
            1128G(a) apply to enrollments and renewals of enrollments of
            providers of services and suppliers under this title.''.

    SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP PROGRAM DISCLOSURE
                  REQUIREMENTS RELATING TO PREVIOUS AFFILIATIONS.

        (a) In General.--Section 1128G of the Social Security Act, as
    inserted by section 1631, is amended by adding at the end the following
    new subsection:
        ``(b) Enhanced Program Disclosure Requirements.--
                ``(1) Disclosure.--A provider of services or supplier who
            submits on or after July 1, 2011, an application for enrollment
            and renewing enrollment in a program under title XVIII, XIX, or
            XXI shall disclose (in a form and manner determined by the
            Secretary) any current affiliation or affiliation within the
            previous 10-year period with a provider of services or supplier
            that has uncollected debt or with a person or entity that has
            been suspended or excluded under such program, subject to a
            payment suspension, or has had its billing privileges revoked.
                ``(2) Enhanced safeguards.--If the Secretary determines
            that such previous affiliation of such provider or supplier
            poses a risk of fraud, waste, or abuse, the Secretary may apply
            such enhanced safeguards as the Secretary determines necessary
            to reduce such risk associated with such provider or supplier
            enrolling or participating in the program under title XVIII,
            XIX, or XXI. Such safeguards may include enhanced oversight,
            such as enhanced screening of claims, required or unannounced
            (or required and unannounced) site visits or inspections,
            additional information reporting requirements, and conditioning
            such enrollment on the provision of a surety bond.
                ``(3) Authority to deny participation.--If the Secretary
            determines that there has been at least one such affiliation
            and that such affiliation or affiliations, as applicable, of
            such provider or supplier poses a serious risk of fraud, waste,
            or abuse, the Secretary may deny the application of such
            provider or supplier.''.
        (b) Conforming Amendments.--
                (1) Medicaid.--Paragraph (74) of section 1902(a) of such
            Act (42 U.S.C. 1396a(a)), as added by section 1631(b)(1), is
            amended--
                        (A) by inserting ``or subsection (b) of such
                    section (relating to disclosure requirements)'' before
                    ``, and that the State''; and
                        (B) by inserting before the period the following:
                    ``and apply any enhanced safeguards, with respect to a
                    provider or supplier described in such subsection (b),
                    as the Secretary determines necessary under such
                    subsection (b)''.
                (2) CHIP.--Subsection (d) of section 2102 of such Act (42
            U.S.C. 1397bb), as added by section 1631(b)(2), is amended--
                        (A) in paragraph (1), by striking at the end
                    ``and'';
                        (B) in paragraph (2) by striking the period at the
                    end and inserting ``; and'' and
                        (C) by adding at the end the following new
                    paragraph:
                ``(3) to enforce any determination made by the Secretary
            under subsection (b) of section 1128G (relating to disclosure
            requirements) and to apply any enhanced safeguards, with
            respect to a provider or supplier described in such subsection,
            as the Secretary determines necessary under such subsection.''.

    SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER FOR CERTAIN
                  EVALUATION AND MANAGEMENT SERVICES.

        Section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as
    amended by section 4101 of the HITECH Act (Public Law 111-5), is
    amended by adding at the end the following new subsection:
        ``(p) Payment Modifier for Certain Evaluation and Management
    Services.--The Secretary shall establish a payment modifier under the
    fee schedule under this section for evaluation and management services
    (as specified in section 1842(b)(16)(B)(ii)) that result in the
    ordering of additional services (such as lab tests), the prescription
    of drugs, the furnishing or ordering of durable medical equipment in
    order to enable better monitoring of claims for payment for such
    additional services under this title, or the ordering, furnishing, or
    prescribing of other items and services determined by the Secretary to
    pose a high risk of waste, fraud, and abuse. The Secretary may require
    providers of services or suppliers to report such modifier in claims
    submitted for payment.''.

    SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICARE INTEGRITY
                  PROGRAM.

        (a) In General.--Section 1893(c) of the Social Security Act (42
    U.S.C. 1395ddd(c)) is amended--
                (1) in paragraph (3), by striking at the end ``and'';
                (2) by redesignating paragraph (4) as paragraph (5); and
                (3) by inserting after paragraph (3) the following new
            paragraph:
                ``(4) for the contract year beginning in 2011 and each
            subsequent contract year, the entity provides assurances to the
            satisfaction of the Secretary that the entity will conduct
            periodic evaluations of the effectiveness of the activities
            carried out by such entity under the Program and will submit to
            the Secretary an annual report on such activities; and''.
        (b) Reference to Medicaid Integrity Program.--For a similar
    provision with respect to the Medicaid Integrity Program, see section
    1752.

    SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE
                  WASTE, FRAUD, AND ABUSE.

        (a) In General.--Section 1874 of the Social Security Act (42 U.S.C.
    42 U.S.C. 1395kk) is amended by adding at the end the following new
    subsection:
        ``(d) Compliance Programs for Providers of Services and
    Suppliers.--
                ``(1) In general.--The Secretary may disenroll a provider
            of services or a supplier (other than a physician or a skilled
            nursing facility) under this title (or may impose any civil
            monetary penalty or other intermediate sanction under paragraph
            (4)) if such provider of services or supplier fails to, subject
            to paragraph (5), establish a compliance program that contains
            the core elements established under paragraph (2).
                ``(2) Establishment of core elements.--The Secretary, in
            consultation with the Inspector General of the Department of
            Health and Human Services, shall establish core elements for a
            compliance program under paragraph (1). Such elements may
            include written policies, procedures, and standards of conduct,
            a designated compliance officer and a compliance committee;
            effective training and education pertaining to fraud, waste,
            and abuse for the organization's employees and contractors; a
            confidential or anonymous mechanism, such as a hotline, to
            receive compliance questions and reports of fraud, waste, or
            abuse; disciplinary guidelines for enforcement of standards;
            internal monitoring and auditing procedures, including
            monitoring and auditing of contractors; procedures for ensuring
            prompt responses to detected offenses and development of
            corrective action initiatives, including responses to potential
            offenses; and procedures to return all identified overpayments
            to the programs under this title, title XIX, and title XXI.
                ``(3) Timeline for implementation.--The Secretary shall
            determine a timeline for the establishment of the core elements
            under paragraph (2) and the date on which a provider of
            services and suppliers (other than physicians) shall be
            required to have established such a program for purposes of
            this subsection.
                ``(4) CMS enforcement authority.--The Administrator for the
            Centers of Medicare & Medicaid Services shall have the
            authority to determine whether a provider of services or
            supplier described in subparagraph (3) has met the requirement
            of this subsection and to impose a civil monetary penalty not
            to exceed $50,000 for each violation. The Secretary may also
            impose other intermediate sanctions, including corrective
            action plans and additional monitoring in the case of a
            violation of this subsection.
                ``(5) Pilot program.--The Secretary may conduct a pilot
            program on the application of this subsection with respect to a
            category of providers of services or suppliers (other than
            physicians) that the Secretary determines to be a category
            which is at high risk for waste, fraud, and abuse before
            implementing the requirements of this subsection to all
            providers of services and suppliers described in paragraph
            (3).''.
        (b) Reference to Similar Medicaid Provision.--For a similar
    provision with respect to the Medicaid program under title XIX of the
    Social Security Act, see section 1753.

    SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO
                  NOT MORE THAN 12 MONTHS.

        (a) Purpose.--In general, the 36-month period currently allowed for
    claims filing under parts A, B, C, and, D of title XVIII of the Social
    Security Act presents opportunities for fraud schemes in which
    processing patterns of the Centers for Medicare & Medicaid Services can
    be observed and exploited. Narrowing the window for claims processing
    will not overburden providers and will reduce fraud and abuse.
        (b) Reducing Maximum Period for Submission.--
                (1) Part a.--Section 1814(a) of the Social Security Act (42
            U.S.C. 1395f(a)) is amended--
                        (A) in paragraph (1), by striking ``period of 3
                    calendar years'' and all that follows and inserting
                    ``period of 1 calendar year from which such services
                    are furnished; and''; and
                        (B) by adding at the end the following new
                    sentence: ``In applying paragraph (1), the Secretary
                    may specify exceptions to the 1 calendar year period
                    specified in such paragraph.''.
                (2) Part b.--Section 1835(a) of such Act (42 U.S.C.
            1395n(a)) is amended--
                        (A) in paragraph (1), by striking ``period of 3
                    calendar years'' and all that follows and inserting
                    ``period of 1 calendar year from which such services
                    are furnished; and''; and
                        (B) by adding at the end the following new
                    sentence: ``In applying paragraph (1), the Secretary
                    may specify exceptions to the 1 calendar year period
                    specified in such paragraph.''.
                (3) Parts c and d.--Section 1857(d) of such Act is amended
            by adding at the end the following new paragraph:
                ``(7) Period for submission of claims.--The contract shall
            require an MA organization or PDP sponsor to require any
            provider of services under contract with, in partnership with,
            or affiliated with such organization or sponsor to ensure that,
            with respect to items and services furnished by such provider
            to an enrollee of such organization, written request, signed by
            such enrollee, except in cases in which the Secretary finds it
            impracticable for the enrollee to do so, is filed for payment
            for such items and services in such form, in such manner, and
            by such person or persons as the Secretary may by regulation
            prescribe, no later than the close of the 1 calendar year
            period after such items and services are furnished. In applying
            the previous sentence, the Secretary may specify exceptions to
            the 1 calendar year period specified.''.
        (c) Effective Date.--The amendments made by subsection (b) shall be
    effective for items and services furnished on or after January 1, 2011.

    SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL EQUIPMENT OR HOME
                  HEALTH SERVICES REQUIRED TO BE MEDICARE ENROLLED
                  PHYSICIANS OR ELIGIBLE PROFESSIONALS.

        (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42
    U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and
    inserting ``physician enrolled under section 1866(j) or an eligible
    professional under section 1848(k)(3)(B)''.
        (b) Home Health Services.--
                (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C.
            1395(a)(2)) is amended in the matter preceding subparagraph (A)
            by inserting ``in the case of services described in
            subparagraph (C), a physician enrolled under section 1866(j) or
            an eligible professional under section 1848(k)(3)(B),'' before
            ``or, in the case of services''.
                (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C.
            1395n(a)(2)) is amended in the matter preceding subparagraph
            (A) by inserting ``, or in the case of services described in
            subparagraph (A), a physician enrolled under section 1866(j) or
            an eligible professional under section 1848(k)(3)(B),'' after
            ``a physician''.
        (c) Discretion To Expand Application.--The Secretary may extend the
    requirement applied by the amendments made by subsections (a) and (b)
    to durable medical equipment and home health services (relating to
    requiring certifications and written orders to be made by enrolled
    physicians and health professions) to other categories of items or
    services under this title, including covered part D drugs as defined in
    section 1860D-2(e), if the Secretary determines that such application
    would help to reduce the risk of waste, fraud, and abuse with respect
    to such other categories under title XVIII of the Social Security Act.
        (d) Effective Date.--The amendments made by this section shall
    apply to written orders and certifications made on or after July 1,
    2010.

    SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON
                  REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

        (a) Physicians and Other Suppliers.--Section 1842(h) of the Social
    Security Act, as amended by section 1635, is further amended by adding
    at the end the following new paragraph:
        ``(10) The Secretary may disenroll, for a period of not more than
    one year for each act, a physician or supplier under section 1866(j) if
    such physician or supplier fails to maintain and, upon request of the
    Secretary, provide access to documentation relating to written orders
    or requests for payment for durable medical equipment, certifications
    for home health services, or referrals for other items or services
    written or ordered by such physician or supplier under this title, as
    specified by the Secretary.''.
        (b) Providers of Services.--Section 1866(a)(1) of such Act (42
    U.S.C. 1395cc), as amended by section 1635, is further amended--
                (1) in subparagraph (V), by striking at the end ``and'';
                (2) in subparagraph (W), by striking the period at the end
            and adding ``; and''; and
                (3) by adding at the end the following new subparagraph:
                        ``(X) maintain and, upon request of the Secretary,
                    provide access to documentation relating to written
                    orders or requests for payment for durable medical
                    equipment, certifications for home health services, or
                    referrals for other items or services written or
                    ordered by the provider under this title, as specified
                    by the Secretary.''.
        (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the
    Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting
    ``, ordering, referring for furnishing, or certifying the need for''
    after ``furnishing''.
        (d) Effective Date.--The amendments made by this section shall
    apply to orders, certifications, and referrals made on or after January
    1, 2010.

    SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE
                  PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH
                  SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

        (a) Condition of Payment for Home Health Services.--
                (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                        (A) by striking ``and such services'' and inserting
                    ``such services''; and
                        (B) by inserting after ``care of a physician'' the
                    following: ``, and, in the case of a certification or
                    recertification made by a physician after January 1,
                    2010, prior to making such certification the physician
                    must document that the physician has had a face-to-face
                    encounter (including through use of telehealth and
                    other than with respect to encounters that are incident
                    to services involved) with the individual during the 6-
                    month period preceding such certification, or other
                    reasonable timeframe as determined by the Secretary''.
                (2) Part b.--Section 1835(a)(2)(A) of the Social Security
            Act is amended--
                        (A) by striking ``and'' before ``(iii)''; and
                        (B) by inserting after ``care of a physician'' the
                    following: ``, and (iv) in the case of a certification
                    or recertification after January 1, 2010, prior to
                    making such certification the physician must document
                    that the physician has had a face-to-face encounter
                    (including through use of telehealth and other than
                    with respect to encounters that are incident to
                    services involved) with the individual during the 6-
                    month period preceding such certification or
                    recertification, or other reasonable timeframe as
                    determined by the Secretary''.
        (b) Condition of Payment for Durable Medical Equipment.--Section
    1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B))
    is amended by adding at the end the following: ``and shall require that
    such an order be written pursuant to the physician documenting that the
    physician has had a face-to-face encounter (including through use of
    telehealth and other than with respect to encounters that are incident
    to services involved) with the individual involved during the 6-month
    period preceding such written order, or other reasonable timeframe as
    determined by the Secretary''.
        (c) Application to Other Areas Under Medicare.--The Secretary may
    apply the face-to-face encounter requirement described in the
    amendments made by subsections (a) and (b) to other items and services
    for which payment is provided under title XVIII of the Social Security
    Act based upon a finding that such an decision would reduce the risk of
    waste, fraud, or abuse.
        (d) Application to Medicaid and CHIP.--The requirements pursuant to
    the amendments made by subsections (a) and (b) shall apply in the case
    of physicians making certifications for home health services under
    title XIX or XXI of the Social Security Act, in the same manner and to
    the same extent as such requirements apply in the case of physicians
    making such certifications under title XVIII of such Act.

    SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AUTHORITY TO PROGRAM
                  EXCLUSION INVESTIGATIONS.

        (a) In General.--Section 1128(f) of the Social Security Act (42
    U.S.C. 1320a-7(f)) is amended by adding at the end the following new
    paragraph:
        ``(4) The provisions of subsections (d) and (e) of section 205
    shall apply with respect to this section to the same extent as they are
    applicable with respect to title II. The Secretary may delegate the
    authority granted by section 205(d) (as made applicable to this
    section) to the Inspector General of the Department of Health and Human
    Services or the Administrator of the Centers for Medicare & Medicaid
    Services for purposes of any investigation under this section.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to investigations beginning on or after January 1, 2010.

    SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND MEDICAID OVERPAYMENTS.

        Section 1128G of the Social Security Act, as inserted by section
    1631 and amended by section 1632, is further amended by adding at the
    end the following new subsection:
        ``(c) Reports on and Repayment of Overpayments Identified Through
    Internal Audits and Reviews.--
                ``(1) Reporting and returning overpayments.--If a person
            knows of an overpayment, the person must--
                        ``(A) report and return the overpayment to the
                    Secretary, the State, an intermediary, a carrier, or a
                    contractor, as appropriate, at the correct address, and
                        ``(B) notify the Secretary, the State,
                    intermediary, carrier, or contractor to whom the
                    overpayment was returned in writing of the reason for
                    the overpayment.
                ``(2) Timing.--An overpayment must be reported and returned
            under paragraph (1)(A) by not later than the date that is 60
            days after the date the person knows of the overpayment.
            Any known overpayment retained later than the applicable date
            specified in this paragraph creates an obligation as defined in
            section 3729(b)(3) of title 31 of the United States Code.
                ``(3) Clarification.--Repayment of any overpayments (or
            refunding by withholding of future payments) by a provider of
            services or supplier does not otherwise limit the provider or
            supplier's potential liability for administrative obligations
            such as applicable interests, fines, and specialties or civil
            or criminal sanctions involving the same claim if it is
            determined later that the reason for the overpayment was
            related to fraud by the provider or supplier or the employees
            or agents of such provider or supplier.
                ``(4) Definitions.--In this subsection:
                        ``(A) Knows.--The term `knows' has the meaning
                    given the terms `knowing' and `knowingly' in section
                    3729(b) of title 31 of the United States Code.
                        ``(B) Overpayment.--The term ``overpayment'' means
                    any finally determined funds that a person receives or
                    retains under title XVIII, XIX, or XXI to which the
                    person, after applicable reconciliation, is not
                    entitled under such title.
                        ``(C) Person.--The term `person' means a provider
                    of services, supplier, Medicaid managed care
                    organization (as defined in section 1903(m)(1)(A)),
                    Medicare Advantage organization (as defined in section
                    1859(a)(1)), or PDP sponsor (as defined in section
                    1860D-41(a)(13)), but excluding a beneficiary.''.

    SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIVERS FOR OIG EXCLUSIONS
                  TO BENEFICIARIES OF ANY FEDERAL HEALTH CARE PROGRAM.

        Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
    7(c)(3)(B)) is amended by striking ``individuals entitled to benefits
    under part A of title XVIII or enrolled under part B of such title, or
    both'' and inserting ``beneficiaries (as defined in section
    1128A(i)(5)) of that program''.

    SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL DIALYSIS FACILITIES.

        Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is
    amended by adding at the end the following new paragraph:
        ``(15) For purposes of evaluating or auditing payments made to
    renal dialysis facilities for items and services under this section
    under paragraph (1), each such renal dialysis facility, upon the
    request of the Secretary, shall provide to the Secretary access to
    information relating to any ownership or compensation arrangement
    between such facility and the medical director of such facility or
    between such facility and any physician.''.

    SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES
                  REQUIRED TO REGISTER UNDER MEDICARE.

        (a) Medicare.--Section 1866(j)(1) of the Social Security Act (42
    U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new
    subparagraph:
                        ``(D) Billing agents and clearinghouses required to
                    be register under medicare.--Any agent, clearinghouse,
                    or other alternate payee that submits claims on behalf
                    of a health care provider must be registered with the
                    Secretary in a form and manner specified by the
                    Secretary.''.
        (b) Medicaid.--For a similar provision with respect to the Medicaid
    program under title XIX of the Social Security Act, see section 1759.
        (c) Effective Date.--The amendment made by subsection (a) shall
    apply to claims submitted on or after January 1, 2012.

    SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO FALSE CLAIMS ACT
                  AMENDMENTS.

        Section 1128A of the Social Security Act, as amended by sections
    1611, 1612, 1613, and 1615, is further amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), by striking ``to an officer,
                    employee, or agent of the United States, or of any
                    department or agency thereof, or of any State agency
                    (as defined in subsection (i)(1))'';
                        (B) in paragraph (4)--
                                (i) by striking ``participating in a
                            program under title XVIII or a State health
                            care program'' and inserting ``participating in
                            a Federal health care program (as defined in
                            section 1128B(f))''; and
                                (ii) in subparagraph (A), by striking
                            ``title XVIII or a State health care program''
                            and inserting ``a Federal health care program
                            (as defined in section 1128B(f))'';
                        (C) by striking ``or'' at the end of paragraph
                    (10);
                        (D) by inserting after paragraph (11) the following
                    new paragraphs:
                ``(12) conspires to commit a violation of this section; or
                ``(13) knowingly makes, uses, or causes to be made or used,
            a false record or statement material to an obligation to pay or
            transmit money or property to a Federal health care program, or
            knowingly conceals or knowingly and improperly avoids or
            decreases an obligation to pay or transmit money or property to
            a Federal health care program;''; and
                        (E) in the matter following paragraph (13), as
                    inserted by subparagraph (D), by striking ``or in cases
                    under paragraph (11), $50,000 for each such violation''
                    and inserting ``in cases under paragraph (11), $50,000
                    for each such violation, in cases under paragraph (12),
                    $50,000 for any violation described in this section
                    committed in furtherance of the conspiracy involved; or
                    in cases under paragraph (13), $50,000 for each false
                    record or statement, or concealment, avoidance, or
                    decrease''; and
                        (F) in the second sentence, by striking ``such
                    false statement or misrepresentation)'' and inserting
                    ``such false statement or misrepresentation, in cases
                    under paragraph (12), an assessment of not more than 3
                    times the total amount that would otherwise apply for
                    any violation described in this section committed in
                    furtherance of the conspiracy involved, or in cases
                    under paragraph (13), an assessment of not more than 3
                    times the total amount of the obligation to which the
                    false record or statement was material or that was
                    avoided or decreased)''.
                (2) in subsection (c)(1), by striking ``six years'' and
            inserting ``10 years''; and
                (3) in subsection (i)--
                        (A) by amending paragraph (2) to read as follows:
                ``(2) The term ``claim'' means any application, request, or
            demand, whether under contract, or otherwise, for money or
            property for items and services under a Federal health care
            program (as defined in section 1128B(f)), whether or not the
            United States or a State agency has title to the money or
            property, that--
                        ``(A) is presented or caused to be presented to an
                    officer, employee, or agent of the United States, or of
                    any department or agency thereof, or of any State
                    agency (as defined in subsection (i)(1)); or
                        ``(B) is made to a contractor, grantee, or other
                    recipient if the money or property is to be spent or
                    used on the Federal health care program's behalf or to
                    advance a Federal health care program interest, and if
                    the Federal health care program--
                                ``(i) provides or has provided any portion
                            of the money or property requested or demanded;
                            or
                                ``(ii) will reimburse such contractor,
                            grantee, or other recipient for any portion of
                            the money or property which is requested or
                            demanded.'';
                        (B) by amending paragraph (3) to read as follows:
                ``(3) The term `item or service' means, without limitation,
            any medical, social, management, administrative, or other item
            or service used in connection with or directly or indirectly
            related to a Federal health care program.'';
                        (C) in paragraph (6)--
                                (i) in subparagraph (C), by striking at the
                            end ``or'';
                                (ii) in the first subparagraph (D), by
                            striking at the end the period and inserting
                            ``; or''; and
                                (iii) by redesignating the second
                            subparagraph (D) as a subparagraph (E);
                        (D) by amending paragraph (7) to read as follows:
                ``(7) The terms `knowing', `knowingly', and `should know'
            mean that a person, with respect to information--
                        ``(A) has actual knowledge of the information;
                        ``(B) acts in deliberate ignorance of the truth or
                    falsity of the information; or
                        ``(C) acts in reckless disregard of the truth or
                    falsity of the information;
            and require no proof of specific intent to defraud.''; and
                        (E) by adding at the end the following new
                    paragraphs:
                ``(8) The term `obligation' means an established duty,
            whether or not fixed, arising from an express or implied
            contractual, grantor-grantee, or licensor-licensee
            relationship, from a fee-based or similar relationship, from
            statute or regulation, or from the retention of any
            overpayment.
                ``(9) The term `material' means having a natural tendency
            to influence, or be capable of influencing, the payment or
            receipt of money or property.''.

     Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and
                                     Abuse

    SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDENTIFY FRAUD, WASTE,
                  AND ABUSE.

        Section 1128G of the Social Security Act, as added by section 1631
    and amended by sections 1632 and 1641, is further amended by adding at
    the end the following new subsection;
        ``(d) Access to Information Necessary To Identify Fraud, Waste, and
    Abuse.--For purposes of law enforcement activity, and to the extent
    consistent with applicable disclosure, privacy, and security laws,
    including the Health Insurance Portability and Accountability Act of
    1996 and the Privacy Act of 1974, and subject to any information
    systems security requirements enacted by law or otherwise required by
    the Secretary, the Attorney General shall have access, facilitation by
    the Inspector General of the Department of Health and Human Services,
    to claims and payment data relating to titles XVIII and XIX, in
    consultation with the Centers for Medicare & Medicaid Services or the
    owner of such data.''.

    SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY
                  AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER
                  DATA BANK.

        (a) In General.--To eliminate duplication between the Healthcare
    Integrity and Protection Data Bank (HIPDB) established under section
    1128E of the Social Security Act and the National Practitioner Data
    Bank (NPBD) established under the Health Care Quality Improvement Act
    of 1986, section 1128E of the Social Security Act (42 U.S.C. 1320a-7e)
    is amended--
                (1) in subsection (a), by striking ``Not later than'' and
            inserting ``Subject to subsection (h), not later than'';
                (2) in the first sentence of subsection (d)(2), by striking
            ``(other than with respect to requests by Federal agencies)'';
            and
                (3) by adding at the end the following new subsection:
        ``(h) Sunset of the Healthcare Integrity and Protection Data Bank;
    Transition Process.--Effective upon the enactment of this subsection,
    the Secretary shall implement a process to eliminate duplication
    between the Healthcare Integrity and Protection Data Bank (in this
    subsection referred to as the `HIPDB' established pursuant to
    subsection (a) and the National Practitioner Data Bank (in this
    subsection referred to as the `NPDB') as implemented under the Health
    Care Quality Improvement Act of 1986 and section 1921 of this Act,
    including systems testing necessary to ensure that information formerly
    collected in the HIPDB will be accessible through the NPDB, and other
    activities necessary to eliminate duplication between the two data
    banks. Upon the completion of such process, notwithstanding any other
    provision of law, the Secretary shall cease the operation of the HIPDB
    and shall collect information required to be reported under the
    preceding provisions of this section in the NPDB. Except as otherwise
    provided in this subsection, the provisions of subsections (a) through
    (g) shall continue to apply with respect to the reporting of (or
    failure to report), access to, and other treatment of the information
    specified in this section.''.
        (b) Elimination of the Responsibility of the HHS Office of the
    Inspector General.--Section 1128C(a)(1) of the Social Security Act (42
    U.S.C. 1320a-7c(a)(1)) is amended--
                (1) in subparagraph (C), by adding at the end ``and'';
                (2) in subparagraph (D), by striking at the end ``, and''
            and inserting a period; and
                (3) by striking subparagraph (E).
        (c) Special Provision for Access to the National Practitioner Data
    Bank by the Department of Veterans Affairs.--
                (1) In general.--Notwithstanding any other provision of
            law, during the one year period that begins on the effective
            date specified in subsection (e)(1), the information described
            in paragraph (2) shall be available from the National
            Practitioner Data Bank (described in section 1921 of the Social
            Security Act) to the Secretary of Veterans Affairs without
            charge.
                (2) Information described.--For purposes of paragraph (1),
            the information described in this paragraph is the information
            that would, but for the amendments made by this section, have
            been available to the Secretary of Veterans Affairs from the
            Healthcare Integrity and Protection Data Bank.
        (d) Funding.--Notwithstanding any provisions of this Act, sections
    1128E(d)(2) and 1817(k)(3) of the Social Security Act, or any other
    provision of law, there shall be available for carrying out the
    transition process under section 1128E(h) of the Social Security Act
    over the period required to complete such process, and for operation of
    the National Practitioner Data Bank until such process is completed,
    without fiscal year limitation--
                (1) any fees collected pursuant to section 1128E(d)(2) of
            such Act; and
                (2) such additional amounts as necessary, from
            appropriations available to the Secretary and to the Office of
            the Inspector General of the Department of Health and Human
            Services under clauses (i) and (ii), respectively, of section
            1817(k)(3)(A) of such Act, for costs of such activities during
            the first 12 months following the date of the enactment of this
            Act.
        (e) Effective Date.--The amendments made--
                (1) by subsection (a)(2) shall take effect on the first day
            after the Secretary of Health and Human Services certifies that
            the process implemented pursuant to section 1128E(h) of the
            Social Security Act (as added by subsection (a)(3)) is
            complete; and
                (2) by subsection (b) shall take effect on the earlier of
            the date specified in paragraph (1) or the first day of the
            second succeeding fiscal year after the fiscal year during
            which this Act is enacted.

    SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECURITY STANDARDS.

        The provisions of sections 262(a) and 264 of the Health Insurance
    Portability and Accountability Act of 1996 (and standards promulgated
    pursuant to such sections) and the Privacy Act of 1974 shall apply with
    respect to the provisions of this subtitle and amendments made by this
    subtitle.

                           TITLE O--MEDICAID AND CHIP

                     Subtitle A--Medicaid and Health Reform

    SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME BELOW 133\1/3\
                  PERCENT OF THE FEDERAL POVERTY LEVEL.

        (a) Eligibility for Non-traditional Individuals With Income Below
    133 Percent of the Federal Poverty Level.--
                (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i) is amended--
                        (A) by striking ``or'' at the end of subclause
                    (VI);
                        (B) by adding ``or'' at the end of subclause (VII);
                    and
                        (C) by adding at the end the following new
                    subclause:
                                        ``(VIII) who are under 65 years of
                                    age, who are not described in a
                                    previous subclause of this clause, and
                                    who are in families whose income
                                    (determined using methodologies and
                                    procedures specified by the Secretary
                                    in consultation with the Health Choices
                                    Commissioner) does not exceed 133\1/3\
                                    percent of the income official poverty
                                    line (as defined by the Office of
                                    Management and Budget, and revised
                                    annually in accordance with section
                                    673(2) of the Omnibus Budget
                                    Reconciliation Act of 1981) applicable
                                    to a family of the size involved;''.
                (2) 100% fmap for non-traditional medicaid eligible
            individuals.--Section 1905 of such Act (42 U.S.C. 1396d) is
            amended--
                        (A) in the third sentence of subsection (b) by
                    inserting before the period at the end the following:
                    ``and with respect to amounts described in subsection
                    (y)''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(y) Additional Expenditures Subject to 100% FMAP.--For purposes
    of section 1905(b), the amounts described in this subsection are the
    following:
                ``(1) Amounts expended for medical assistance for
            individuals described in subclause (VIII) of section
            1902(a)(10)(A)(i).''.
                (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (VIII)
            of section 1902(a)(10)(A)(i) of the Social Security Act, as
            added by paragraph (1) of, and an increased FMAP under the
            amendment made by paragraph (2) for, an individual who has been
            provided medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
                (4) Conforming amendment.--Section 1903(f)(4) of the Social
            Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting
            ``1902(a)(10)(A)(i)(VIII),'' after ``1902(a)(10)(A)(i)(VII),''.
        (b) Eligibility for Traditional Medicaid Eligible Individuals With
    Income Not Exceeding 133\1/3\ Percent of the Federal Poverty Level.--
                (1) In general.--Section 1902(a)(10)(A)(i) of the Social
            Security Act (42 U.S.C. 1396b(a)(10)(A)(i)), as amended by
            subsection (a), is amended--
                        (A) by striking ``or'' at the end of subclause
                    (VII);
                        (B) by adding ``or'' at the end of subclause
                    (VIII); and
                        (C) by adding at the end the following new
                    subclause:
                                        ``(IX) who are under 65 years of
                                    age, who would be eligible for medical
                                    assistance under the State plan under
                                    one of subclauses (I) through (VII)
                                    (based on the income standards,
                                    methodologies, and procedures in effect
                                    as of June 16, 2009) but for income and
                                    who are in families whose income does
                                    not exceed 133\1/3\ percent of the
                                    income official poverty line (as
                                    defined by the Office of Management and
                                    Budget, and revised annually in
                                    accordance with section 673(2) of the
                                    Omnibus Budget Reconciliation Act of
                                    1981) applicable to a family of the
                                    size involved;''.
                (2) 100% fmap for certain traditional medicaid eligible
            individuals.--Section 1905(y) of such Act (42 U.S.C. 1396d(b)),
            as added by subsection (a)(2)(B), is amended by inserting ``or
            (IX)'' after ``(VIII)''.
                (3) Construction.--Nothing in this subsection shall be
            construed as not providing for coverage under subclause (IX) of
            section 1902(a)(10)(A)(i) of the Social Security Act, as added
            by paragraph (1) of, and an increased FMAP under the amendment
            made by paragraph (2) for, an individual who has been provided
            medical assistance under title XIX of the Act under a
            demonstration waiver approved under section 1115 of such Act or
            with State funds.
                (4) Conforming amendment.--Section 1903(f)(4) of the Social
            Security Act (42 U.S.C. 1396b(f)(4)), as amended by subsection
            (a)(4), is amended by inserting ``1902(a)(10)(A)(i)(IX),''
            after ``1902(a)(10)(A)(i)(VIII),''.
        (c) 100% Matching Rate for Temporary Coverage of Certain
    Newborns.--Section 1905(y) of such Act, as added by subsection
    (a)(2)(B), is amended--
                (1) in paragraph (1), by inserting before the period at the
            end the following: ``, and who is not provided medical
            assistance under section 1943(b)(2) of this title or section
            205(d)(1)(B) of the America's Affordable Health Choices Act of
            2009''; and
                (2) by adding at the end the following:
                ``(2) Amounts expended for medical assistance for children
            described in section 203(d)(1)(A) of the America's Affordable
            Health Choices Act of 2009 during the time period specified in
            such section.''.
        (d) Network Adequacy.--Section 1932(a)(2) of the Social Security
    Act (42 U.S.C. 1396u-2(a)(2)) is amended by adding at the end the
    following new subparagraph:
                        ``(D) Enrollment of non-traditional medicaid
                    eligibles.--A State may not require under paragraph (1)
                    the enrollment in a managed care entity of an
                    individual described in section 1902(a)(10)(A)(i)(VIII)
                    unless the State demonstrates, to the satisfaction of
                    the Secretary, that the entity, through its provider
                    network and other arrangements, has the capacity to
                    meet the health, mental health, and substance abuse
                    needs of such individuals.''.
        (e) Effective Date.--The amendments made by this section shall take
    effect on the first day of Y1, and shall apply with respect to items
    and services furnished on or after such date.

    SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CERTAIN MEDICAID ELIGIBLE
                  INDIVIDUALS.

        (a) In General.--Title XIX of the Social Security Act is amended by
    adding at the end the following new section:

        ``requirements and special rules for certain medicaid eligible
                                  individuals

        ``Sec. 1943.  (a) Coordination With NHI Exchange Through Memorandum
    of Understanding.--
                ``(1) In general.--The State shall enter into a Medicaid
            memorandum of understanding described in section 204(e)(4) of
            the America's Affordable Health Choices Act of 2009 with the
            Health Choices Commissioner, acting in consultation with the
            Secretary, with respect to coordinating the implementation of
            the provisions of subdivision A of such Act with the State plan
            under this title in order to ensure the enrollment of Medicaid
            eligible individuals in acceptable coverage. Nothing in this
            section shall be construed as permitting such memorandum to
            modify or vitiate any requirement of a State plan under this
            title.
                ``(2) Enrollment of exchange-referred individuals.--
                        ``(A) Non-traditional individuals.--Pursuant to
                    such memorandum the State shall accept without further
                    determination the enrollment under this title of an
                    individual determined by the Commissioner to be a non-
                    traditional Medicaid eligible individual. The State
                    shall not do any redeterminations of eligibility for
                    such individuals unless the periodicity of such
                    redeterminations is consistent with the periodicity for
                    redeterminations by the Commissioner of eligibility for
                    affordability credits under subtitle C of title II of
                    subdivision A of the America's Affordable Health
                    Choices Act of 2009, as specified under such
                    memorandum.
                        ``(B) Traditional individuals.--
                                ``(i) Regular enrollment option.--Pursuant
                            to such memorandum, insofar as the memorandum
                            has selected the option described in section
                            205(e)(3)(A) of the America's Affordable Health
                            Choices Act of 2009, the State shall accept
                            without further determination the enrollment
                            under this title of an individual determined by
                            the Commissioner to be a traditional Medicaid
                            eligible individual. The State may do
                            redeterminations of eligibility of such
                            individual consistent with such section and the
                            memorandum.
                                ``(ii) Presumptive eligibility option.--
                            Pursuant to such memorandum, insofar as the
                            memorandum has selected the option described in
                            section 205(e)(3)(B) of the America's
                            Affordable Health Choices Act of 2009, the
                            State shall provide for making medical
                            assistance available during the presumptive
                            eligibility period and shall, upon application
                            of the individual for medical assistance under
                            this title, promptly make a determination (and
                            subsequent redeterminations) of eligibility in
                            the same manner as if the individual had
                            applied directly to the State for such
                            assistance except that the State shall use the
                            income-related information used by the
                            Commissioner and provided to the State under
                            the memorandum in making the presumptive
                            eligibility determination to the maximum extent
                            feasible.
                ``(3) Determinations of eligibility for affordability
            credits.--If the Commissioner determines that a State Medicaid
            agency has the capacity to make determinations of eligibility
            for affordability credits under subtitle C of title II of
            subdivision A of the America's Affordable Health Choices Act of
            2009, under such memorandum--
                        ``(A) the State Medicaid agency shall conduct such
                    determinations for any Exchange-eligible individual who
                    requests such a determination;
                        ``(B) in the case that a State Medicaid agency
                    determines that an Exchange-eligible individual is not
                    eligible for affordability credits, the agency shall
                    forward the information on the basis of which such
                    determination was made to the Commissioner; and
                        ``(C) the Commissioner shall reimburse the State
                    Medicaid agency for the costs of conducting such
                    determinations.
        ``(b) Treatment of Certain Newborns.--
                ``(1) In general.--In the case of a child who is deemed
            under section 205(d)(1) of the America's Affordable Health
            Choices Act of 2009 to be a non-traditional Medicaid eligible
            individual and enrolled under this title pursuant to such
            section, the State shall provide for a determination, by not
            later than the end of the period referred to in subparagraph
            (A) of such section, of the child's eligibility for medical
            assistance under this title.
                ``(2) Extended treatment as traditional medicaid eligible
            individual.--In accordance with subparagraph (B) of section
            205(d)(1) of the America's Affordable Health Choices Act of
            2009, in the case of a child described in subparagraph (A) of
            such section who at the end of the period referred to in such
            subparagraph is not otherwise covered under acceptable
            coverage, the child shall be deemed (until such time as the
            child obtains such coverage or the State otherwise makes a
            determination of the child's eligibility for medical assistance
            under its plan under this title pursuant to paragraph (1)) to
            be a traditional Medicaid eligible individual described in
            section 1902(l)(1)(B).
        ``(c) Definitions .--In this section:
                ``(1) Medicaid eligible individuals.--In this section, the
            terms `Medicaid eligible individual', `traditional Medicaid
            eligible individual', and `non-traditional Medicaid eligible
            individual' have the meanings given such terms in section
            205(e)(5) of the America's Affordable Health Choices Act of
            2009.
                ``(2) Memorandum.--The term `memorandum' means a Medicaid
            memorandum of understanding under section 205(e)(4) of the
            America's Affordable Health Choices Act of 2009.
                ``(3) Y1.--The term `Y1' has the meaning given such term in
            section 100(c) of the America's Affordable Health Choices Act
            of 2009.''.
        (b) Conforming Amendments to Error Rate.--
                (1) Section 1903(u)(1)(D) of the Social Security Act (42
            U.S.C. 1396b(u)(1)(D)) is amended by adding at the end the
            following new clause:
        ``(vi) In determining the amount of erroneous excess payments,
    there shall not be included any erroneous payments made that are
    attributable to an error in an eligibility determination under subtitle
    C of title II of subdivision A of the America's Affordable Health
    Choices Act of 2009.''.
                (2) Section 2105(c)(11) of such Act (42 U.S.C.
            1397ee(c)(11)) is amended by adding at the end the following
            new sentence: ``Clause (vi) of section 1903(u)(1)(D) shall
            apply with respect to the application of such requirements
            under this title and title XIX.''.

    SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.

        (a) CHIP Maintenance of Effort.--Section 1902 of the Social
    Security Act (42 U.S.C. 1396a) is amended--
                (1) in subsection (a), as amended by section
            1631(b)(1)(D)--
                        (A) by striking ``and'' at the end of paragraph
                    (72);
                        (B) by striking the period at the end of paragraph
                    (73) and inserting ``; and''; and
                        (C) by inserting after paragraph (74) the following
                    new paragraph:
                ``(75) provide for maintenance of effort under the State
            child health plan under title XXI in accordance with subsection
            (gg).''; and
                (2) by adding at the end the following new subsection:
        ``(gg) CHIP Maintenance of Effort Requirement.--
                ``(1) In general.--Subject to paragraph (2), as a condition
            of its State plan under this title under subsection (a)(75) and
            receipt of any Federal financial assistance under section
            1903(a) for calendar quarters beginning after the date of the
            enactment of this subsection and before CHIP MOE termination
            date specified in paragraph (3), a State shall not have in
            effect eligibility standards, methodologies, or procedures
            under its State child health plan under title XXI (including
            any waiver under such title or under section 1115 that is
            permitted to continue effect) that are more restrictive than
            the eligibility standards, methodologies, or procedures,
            respectively, under such plan (or waiver) as in effect on June
            16, 2009.
                ``(2) Limitation.--Paragraph (1) shall not be construed as
            preventing a State from imposing a limitation described in
            section 2110(b)(5)(C)(i)(II) for a fiscal year in order to
            limit expenditures under its State child health plan under
            title XXI to those for which Federal financial participation is
            available under section 2105 for the fiscal year.
                ``(3) CHIP moe termination date.--In paragraph (1), the
            `CHIP MOE termination date' for a State is the date that is the
            first day of Y1 (as defined in section 100(c) of the America's
            Affordable Health Choices Act of 2009) or, if later, the first
            day after such date that both of the following determinations
            have been made:
                        ``(A) The Health Choices Commissioner has
                    determined that the Health Insurance Exchange has the
                    capacity to support the participation of CHIP enrollees
                    who are Exchange-eligible individuals (as defined in
                    section 202(b) of the America's Affordable Health
                    Choices Act of 2009),
                        ``(B) The Secretary has determined that such
                    Exchange, the State, and employers have procedures in
                    effect to ensure the timely transition without
                    interruption of coverage of CHIP enrollees from
                    assistance under title XXI to acceptable coverage (as
                    defined for purposes of such Act).
            In this paragraph, the term `CHIP enrollee' means a targeted
            low-income child or (if the State has elected the option under
            section 2112, a targeted low-income pregnant woman) who is or
            otherwise would be (but for acceptable coverage) eligible for
            child health assistance or pregnancy-related assistance,
            respectively, under the State child health plan referred to in
            paragraph (1).''.
        (b) Medicaid Maintenance of Effort; Simplifying and Coordinating
    Eligibility Rules Between Exchange and Medicaid.--
                (1) In general.--Section 1903 of such Act (42 U.S.C. 1396b)
            is amended by adding at the end the following new subsection:
        ``(aa) Maintenance of Medicaid Effort; Simplifying and Coordinating
    Eligibility Rules Between Health Insurance Exchange and Medicaid.--
                ``(1) Maintenance of effort.--A State is not eligible for
            payment under subsection (a) for a calendar quarter beginning
            after the date of the enactment of this subsection if
            eligibility standards, methodologies, or procedures under its
            plan under this title (including any waiver under this title or
            under section 1115 that is permitted to continue effect) that
            are more restrictive than the eligibility standards,
            methodologies, or procedures, respectively, under such plan (or
            waiver) as in effect on June 16, 2009. The Secretary shall
            extend such a waiver (including the availability of Federal
            financial participation under such waiver) for such period as
            may be required for a State to meet the requirement of the
            previous sentence.
                ``(2) Removal of asset test for certain eligibility
            categories.--
                        ``(A) In general.--A State is not eligible for
                    payment under subsection (a) for a calendar quarter
                    beginning on or after the first day of Y1 (as defined
                    in section 100(c) of the America's Affordable Health
                    Choices Act of 2009), if the State applies any asset or
                    resource test in determining (or redetermining)
                    eligibility of any individual on or after such first
                    day under any of the following:
                                ``(i) Subclause (I), (III), (IV), or (VI)
                            of section 1902(a)(10)(A)(i).
                                ``(ii) Subclause (II), (IX), (XIV) or
                            (XVII) of section 1902(a)(10)(A)(ii).
                                ``(iii) Section 1931(b).
                        ``(B) Overriding contrary provisions; references.--
                    The provisions of this title that prevent the waiver of
                    an asset or resource test described in subparagraph (A)
                    are hereby waived.
                        ``(C) References.--Any reference to a provision
                    described in a provision in subparagraph (A) shall be
                    deemed to be a reference to such provision as modified
                    through the application of subparagraphs (A) and
                    (B).''.
                (2) Conforming amendments.--(A) Section 1902(a)(10)(A) of
            such Act (42 U.S.C. 1396a(a)(10)(A)) is amended, in the matter
            before clause (i), by inserting ``subject to section
            1903(aa)(2),'' after ``(A)''.
                (B) Section 1931(b)(2) of such Act (42 U.S.C. 1396u-
            1(b)(1)) is amended by inserting ``subject to section
            1903(aa)(2)'' after ``and (3)''.
        (c) Standards for Benchmark Packages.--Section 1937(b) of such Act
    (42 U.S.C. 1396u-7(b)) is amended--
                (1) in paragraph (1), by inserting ``subject to paragraph
            (5)''; and
                (2) by adding at the end the following new paragraph:
                ``(5) Minimum standards.--Effective January 1, 2013, any
            benchmark benefit package (or benchmark equivalent coverage
            under paragraph (2)) must meet the minimum benefits and cost-
            sharing standards of a basic plan offered through the Health
            Insurance Exchange.''.

    SEC. 1704. REDUCTION IN MEDICAID DSH.

        (a) Report.--
                (1) In general.--Not later than January 1, 2016, the
            Secretary of Health and Human Services (in this title referred
            to as the ``Secretary'') shall submit to Congress a report
            concerning the extent to which, based upon the impact of the
            health care reforms carried out under subdivision A in reducing
            the number of uninsured individuals, there is a continued role
            for Medicaid DSH. In preparing the report, the Secretary shall
            consult with community-based health care networks serving low-
            income beneficiaries.
                (2) Matters to be included.--The report shall include the
            following:
                        (A) Recommendations.--Recommendations regarding--
                                (i) the appropriate targeting of Medicaid
                            DSH within States; and
                                (ii) the distribution of Medicaid DSH among
                            the States.
                        (B) Specification of dsh health reform
                    methodology.--The DSH Health Reform methodology
                    described in paragraph (2) of subsection (b) for
                    purposes of implementing the requirements of such
                    subsection.
                (3) Coordination with medicare dsh report.--The Secretary
            shall coordinate the report under this subsection with the
            report on Medicare DSH under section 1112.
                (4) Medicaid dsh.--In this section, the term ``Medicaid
            DSH'' means adjustments in payments under section 1923 of the
            Social Security Act for inpatient hospital services furnished
            by disproportionate share hospitals.
        (b) Medicaid DSH Reductions.--
                (1) In general.--The Secretary shall reduce Medicaid DSH so
            as to reduce total Federal payments to all States for such
            purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000
            in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.
                (2) DSH health reform methodology.--The Secretary shall
            carry out paragraph (1) through use of a DSH Health Reform
            methodology issued by the Secretary that imposes the largest
            percentage reductions on the States that--
                        (A) have the lowest percentages of uninsured
                    individuals (determined on the basis of audited
                    hospital cost reports) during the most recent year for
                    which such data are available; or
                        (B) do not target their DSH payments on--
                                (i) hospitals with high volumes of Medicaid
                            inpatients (as defined in section 1923(b)(1)(A)
                            of the Social Security Act (42 U.S.C. 1396r-
                            4(b)(1)(A)); and
                                (ii) hospitals that have high levels of
                            uncompensated care (excluding bad debt).
                (3) DSH allotment publications.--
                        (A) In general.--Not later than the publication
                    deadline specified in subparagraph (B), the Secretary
                    shall publish in the Federal Register a notice
                    specifying the DSH allotment to each State under
                    1923(f) of the Social Security Act for the respective
                    fiscal year specified in such subparagraph, consistent
                    with the application of the DSH Health Reform
                    methodology described in paragraph (2).
                        (B) Publication deadline.--The publication deadline
                    specified in this subparagraph is--
                                (i) January 1, 2016, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2017;
                                (ii) January 1, 2017, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2018; and
                                (iii) January 1, 2018, with respect to DSH
                            allotments described in subparagraph (A) for
                            fiscal year 2019.
        (c) Conforming Amendments.--
                (1) Section 1923(f) of the Social Security Act (42 U.S.C.
            1396r-4(f)) is amended--
                        (A) by redesignating paragraph (7) as paragraph
                    (8); and
                        (B) by inserting after paragraph (6) the following
                    new paragraph:
                ``(7) Special rule for fiscal years 2017, 2018, and 2019.--
                        ``(A) Fiscal year 2017.--Notwithstanding paragraph
                    (2), the total DSH allotments for all States for--
                                ``(i) fiscal year 2017, shall be the total
                            DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $1,500,000,000;
                                ``(ii) fiscal year 2018, shall be the total
                            DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $2,500,000,000; and
                                ``(iii) fiscal year 2019, shall be the
                            total DSH allotments that would otherwise be
                            determined under this subsection for such
                            fiscal year decreased by $6,000,000,000.''.
                (2) Section 1923(b)(4) of such Act (42 U.S.C. 1396r-
            4(b)(4)) is amended by adding before the period the following:
            ``or to affect the authority of the Secretary to issue and
            implement the DSH Health Reform methodology under section
            1704(b)(2) of the America's Health Choices Act of 2009''.
        (d) Disproportionate Share Hospitals (DSH) and Essential Access
    Hospital (EAH) Non-Discrimination.--
                (1) In general.--Section 1923(d) of the Social Security Act
            (42 U.S.C. 1396r-4) is amended by adding at the end the
            following new paragraph:
                ``(4) No hospital may be defined or deemed as a
            disproportionate share hospital, or as an essential access
            hospital (for purposes of subsection (f)(6)(A)(iv), under a
            State plan under this title or subsection (b) of this section
            (including any waiver under section 1115) unless the hospital--
                        ``(A) provides services to beneficiaries under this
                    title without discrimination on the ground of race,
                    color, national origin, creed, source of payment,
                    status as a beneficiary under this title, or any other
                    ground unrelated to such beneficiary's need for the
                    services or the availability of the needed services in
                    the hospital; and
                        ``(B) makes arrangements for, and accepts,
                    reimbursement under this title for services provided to
                    eligible beneficiaries under this title.''.
                (2) Effective date.--The amendment made by subsection (a)
            shall be apply to expenditures made on or after July 1, 2010.

    SEC. 1705. EXPANDED OUTSTATIONING.

        (a) In General.--Section 1902(a)(55) of the Social Security Act (42
    U.S.C. 1396a(a)(55)) is amended by striking ``under subsection
    (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or
    (a)(10)(A)(ii)(IX)'' and inserting ``(including receipt and processing
    of applications of individuals for affordability credits under subtitle
    C of title II of subdivision A of the America's Affordable Health
    Choices Act of 2009 pursuant to a Medicaid memorandum of understanding
    under section 1943(a)(1))''.
        (b) Effective Date.--
                (1) Except as provided in paragraph (2), the amendment made
            by subsection (a) shall apply to services furnished on or after
            July 1, 2010, without regard to whether or not final
            regulations to carry out such amendment have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirement imposed
            by the amendment made by this section, the State plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

                             Subtitle B--Prevention

    SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERVICES.

        (a) Coverage.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by section 1701(a)(2)(B), is amended--
                (1) in subsection (a)(4)--
                        (A) by striking ``and'' before ``(C)''; and
                        (B) by inserting before the semicolon at the end
                    the following: ``and (D) preventive services described
                    in subsection (z)''; and
                (2) by adding at the end the following new subsection:
        ``(z) Preventive Services.--The preventive services described in
    this subsection are services not otherwise described in subsection (a)
    or (r) that the Secretary determines are--
                ``(1)(A) recommended with a grade of A or B by the Task
            Force for Clinical Preventive Services; or
                ``(B) vaccines recommended for use as appropriate by the
            Director of the Centers for Disease Control and Prevention; and
                ``(2) appropriate for individuals entitled to medical
            assistance under this title.''.
        (b) Conforming Amendment.--Section 1928 of such Act (42 U.S.C.
    1396s) is amended--
                (1) in subsection (c)(2)(B)(i), by striking ``the advisory
            committee referred to in subsection (e)'' and inserting ``the
            Director of the Centers for Disease Control and Prevention'';
                (2) in subsection (e), by striking ``Advisory Committee''
            and all that follows and inserting ``Director of the Centers
            for Disease Control and Prevention.''; and
                (3) by striking subsection (g).
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after July 1, 2010, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirements imposed
            by the amendments made by this section, the State plan shall
            not be regarded as failing to comply with the requirements of
            such title solely on the basis of its failure to meet these
            additional requirements before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1712. TOBACCO CESSATION.

        (a) Dropping Tobacco Cessation Exclusion From Covered Outpatient
    Drugs.--Section 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
    8(d)(2)) is amended--
                (1) by striking subparagraph (E);
                (2) in subparagraph (G), by inserting before the period at
            the end the following: ``, except agents approved by the Food
            and Drug Administration for purposes of promoting, and when
            used to promote, tobacco cessation''; and
                (3) by redesignating subparagraphs (F) through (K) as
            subparagraphs (E) through (J), respectively.
        (b) Effective Date.--The amendments made by this section shall
    apply to drugs and services furnished on or after January 1, 2010.

    SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITATION SERVICES.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by sections 1701(a)(2) and 1711(a), is amended--
                (1) in subsection (a)--
                        (A) in paragraph (27), by striking ``and'' at the
                    end;
                        (B) by redesignating paragraph (28) as paragraph
                    (29); and
                        (C) by inserting after paragraph (27) the following
                    new paragraph:
                ``(28) nurse home visitation services (as defined in
            subsection (aa)); and''; and
                (2) by adding at the end the following new subsection:
        ``(aa) The term `nurse home visitation services' means home visits
    by trained nurses to families with a first-time pregnant woman, or a
    child (under 2 years of age), who is eligible for medical assistance
    under this title, but only, to the extent determined by the Secretary
    based upon evidence, that such services are effective in one or more of
    the following:
                ``(1) Improving maternal or child health and pregnancy
            outcomes or increasing birth intervals between pregnancies.
                ``(2) Reducing the incidence of child abuse, neglect, and
            injury, improving family stability (including reduction in the
            incidence of intimate partner violence), or reducing maternal
            and child involvement in the criminal justice system.
                ``(3) Increasing economic self-sufficiency, employment
            advancement, school-readiness, and educational achievement, or
            reducing dependence on public assistance.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2010.
        (c) Construction.--Nothing in the amendments made by this section
    shall be construed as affecting the ability of a State under title XIX
    or XXI of the Social Security Act to provide nurse home visitation
    services as part of another class of items and services falling within
    the definition of medical assistance or child health assistance under
    the respective title, or as an administrative expenditure for which
    payment is made under section 1903(a) or 2105(a) of such Act,
    respectively, on or after the date of the enactment of this Act.

    SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

        (a) Coverage as Optional Categorically Needy Group.--
                (1) In general.--Section 1902(a)(10)(A)(ii) of the Social
            Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                        (A) in subclause (XVIII), by striking ``or'' at the
                    end;
                        (B) in subclause (XIX), by adding ``or'' at the
                    end; and
                        (C) by adding at the end the following new
                    subclause:
                ``(XX) who are described in subsection (hh) (relating to
            individuals who meet certain income standards);''.
                (2) Group described.--Section 1902 of such Act (42 U.S.C.
            1396a), as amended by section 1703, is amended by adding at the
            end the following new subsection:
        ``(hh)(1) Individuals described in this subsection are
    individuals--
                        ``(A) whose income does not exceed an income
                    eligibility level established by the State that does
                    not exceed the highest income eligibility level
                    established under the State plan under this title (or
                    under its State child health plan under title XXI) for
                    pregnant women; and
                        ``(B) who are not pregnant.
                ``(2) At the option of a State, individuals described in
            this subsection may include individuals who, had individuals
            applied on or before January 1, 2007, would have been made
            eligible pursuant to the standards and processes imposed by
            that State for benefits described in clause (XV) of the matter
            following subparagraph (G) of section subsection (a)(10)
            pursuant to a waiver granted under section 1115.
                ``(3) At the option of a State, for purposes of subsection
            (a)(17)(B), in determining eligibility for services under this
            subsection, the State may consider only the income of the
            applicant or recipient.''.
                (3) Limitation on benefits.--Section 1902(a)(10) of such
            Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following
            subparagraph (G)--
                        (A) by striking ``and (XIV)'' and inserting
                    ``(XIV)''; and
                        (B) by inserting ``, and (XV) the medical
                    assistance made available to an individual described in
                    subsection (hh) shall be limited to family planning
                    services and supplies described in section
                    1905(a)(4)(C) including medical diagnosis and treatment
                    services that are provided pursuant to a family
                    planning service in a family planning setting'' after
                    ``cervical cancer''.
                (4) Conforming amendments.--Section 1905(a) of such Act (42
            U.S.C. 1396d(a)), as amended by section 1731(c), is amended in
            the matter preceding paragraph (1)--
                        (A) in clause (xiii), by striking ``or'' at the
                    end;
                        (B) in clause (xiv), by adding ``or'' at the end;
                    and
                        (C) by inserting after clause (xiv) the following:
                                ``(xv) individuals described in section
                            1902(hh),''.
        (b) Presumptive Eligibility.--
                (1) In general.--Title XIX of the Social Security Act (42
            U.S.C. 1396 et seq.) is amended by inserting after section
            1920B the following:

             ``presumptive eligibility for family planning services

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

                               Subtitle C--Access

    SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS.

        (a) In General.--
                (1) Fee-for-service payments.--Section 1902(a)(13) of the
            Social Security Act (42 U.S.C. 1396b(a)(13)) is amended--
                        (A) by striking ``and'' at the end of subparagraph
                    (A);
                        (B) by adding ``and'' at the end of subparagraph
                    (B); and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(C) payment for primary care services (as defined
                    in section 1848(j)(5)(A), but applied without regard to
                    clause (ii) thereof) furnished by physicians (or for
                    services furnished by other health care professionals
                    that would be primary care services under such section
                    if furnished by a physician) at a rate not less than 80
                    percent of the payment rate applicable to such services
                    and physicians or professionals (as the case may be)
                    under part B of title XVIII for services furnished in
                    2010, 90 percent of such rate for services and
                    physicians (or professionals) furnished in 2011, and
                    100 percent of such payment rate for services and
                    physicians (or professionals) furnished in 2012 or a
                    subsequent year;''.
                (2) Under medicaid managed care plans.--Section 1923(f) of
            such Act (42 U.S.C. 1396u-2(f)) is amended--
                        (A) in the heading, by adding at the end the
                    following: ``; Adequacy of Payment for Primary Care
                    Services''; and
                        (B) by inserting before the period at the end the
                    following: ``and, in the case of primary care services
                    described in section 1902(a)(13)(C), consistent with
                    the minimum payment rates specified in such section
                    (regardless of the manner in which such payments are
                    made, including in the form of capitation or partial
                    capitation)''.
        (b) Increase in Payment Using 100% FMAP.--Section 1905(y), as added
    by section 1701(a)(2)(B) and as amended by section 1701(c)(2), is
    amended by adding at the end the following:
                ``(3)(A) The portion of the amounts expended for medical
            assistance for services described in section 1902(a)(13)(C)
            furnished on or after January 1, 2010, that is attributable to
            the amount by which the minimum payment rate required under
            such section (or, by application, section 1932(f)) exceeds the
            payment rate applicable to such services under the State plan
            as of June 16, 2009.
                ``(B) Subparagraphs (A) shall not be construed as
            preventing the payment of Federal financial participation based
            on the Federal medical assistance percentage for amounts in
            excess of those specified under such subparagraphs.''.
        (c) Effective Date.--The amendments made by this section shall
    apply to services furnished on or after January 1, 2010.

    SEC. 1722. MEDICAL HOME PILOT PROGRAM.

        (a) In General.--The Secretary of Health and Human Services shall
    establish under this section a medical home pilot program under which a
    State may apply to the Secretary for approval of a medical home pilot
    project described in subsection (b) (in this section referred to as a
    ``pilot project'') for the application of the medical home concept
    under title XIX of the Social Security Act. The pilot program shall
    operate for a period of up to 5 years.
        (b) Pilot Project Described.--
                (1) In general.--A pilot project is a project that applies
            one or more of the medical home models described in section
            1866E(a)(3) of the Social Security Act (as inserted by section
            1302(a)) or such other model as the Secretary may approve, to
            high need beneficiaries (including medically fragile children
            and high-risk pregnant women) who are eligible for medical
            assistance under title XIX of the Social Security Act. The
            Secretary shall provide for appropriate coordination of the
            pilot program under this section with the medical home pilot
            program under section 1866E of such Act.
                (2) Limitation.--A pilot project shall be for a duration of
            not more than 5 years.
        (c) Additional Incentives.--In the case of a pilot project, the
    Secretary may--
                (1) waive the requirements of section 1902(a)(1) of the
            Social Security Act (relating to statewideness) and section
            1902(a)(10)(B) of such Act (relating to comparability); and
                (2) increase to up to 90 percent (for the first 2 years of
            the pilot program) or 75 percent (for the next 3 years) the
            matching percentage for administrative expenditures (such as
            those for community care workers).
        (d) Medically Fragile Children.--In the case of a model involving
    medically fragile children, the model shall ensure that the patient-
    centered medical home services received by each child, in addition to
    fulfilling the requirements under 1866E(b)(1) of the Social Security
    Act, provide for continuous involvement and education of the parent or
    caregiver and for assistance to the child in obtaining necessary
    transitional care if a child's enrollment ceases for any reason.
        (e) Evaluation; Report.--
                (1) Evaluation.--The Secretary, using the criteria
            described in section 1866E(g)(1) of the Social Security Act (as
            inserted by section 1123), shall conduct an evaluation of the
            pilot program under this section.
                (2) Report.--Not later than 60 days after the date of
            completion of the evaluation under paragraph (1), the Secretary
            shall submit to Congress and make available to the public a
            report on the findings of the evaluation under such paragraph.
        (f) Funding.--The additional Federal financial participation
    resulting from the implementation of the pilot program under this
    section may not exceed in the aggregate $1,235,000,000 over the 5-year
    period of the program.

    SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.

        (a) In General.--Section 1903(a)(2)(E) of the Social Security Act
    (42 U.S.C. 1396b(a)(2)), as added by section 201(b)(2)(A) of the
    Children's Health Insurance Program Reauthorization Act of 2009 (Public
    Law 111-3), is amended by inserting ``and other individuals'' after
    ``children of families''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to payment for translation or interpretation services furnished
    on or after January 1, 2010.

    SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by section 1713(a), is amended--
                (1) in subsection (a)--
                        (A) by redesignating paragraph (29) as paragraph
                    (30);
                        (B) in paragraph (28), by striking at the end
                    ``and''; and
                        (C) by inserting after paragraph (28) the following
                    new paragraph:
                ``(29) freestanding birth center services (as defined in
            subsection (l)(3)(A)) and other ambulatory services that are
            offered by a freestanding birth center (as defined in
            subsection (l)(3)(B)) and that are otherwise included in the
            plan; and''; and
                (2) in subsection (l), by adding at the end the following
            new paragraph:
        ``(3)(A) The term `freestanding birth center services' means
    services furnished to an individual at a freestanding birth center (as
    defined in subparagraph (B)), including by a licensed birth attendant
    (as defined in subparagraph (C)) at such center.
        ``(B) The term `freestanding birth center' means a health
    facility--
                ``(i) that is not a hospital; and
                ``(ii) where childbirth is planned to occur away from the
            pregnant woman's residence.
        ``(C) The term `licensed birth attendant' means an individual who
    is licensed or registered by the State involved to provide health care
    at childbirth and who provides such care within the scope of practice
    under which the individual is legally authorized to perform such care
    under State law (or the State regulatory mechanism provided by State
    law), regardless of whether the individual is under the supervision of,
    or associated with, a physician or other health care provider. Nothing
    in this subparagraph shall be construed as changing State law
    requirements applicable to a licensed birth attendant.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to items and services furnished on or after the date of the
    enactment of this Act.

    SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER THE VACCINES FOR
                  CHILDREN PROGRAM.

        Section 1928(b)(2)(A)(iii)(I) of the Social Security Act (42 U.S.C.
    1396s(b)(2)(A)(iii)(I)) is amended--
                (1) by striking ``or a rural health clinic'' and inserting
            ``, a rural health clinic''; and
                (2) by inserting ``or a public health clinic,'' after
            ```1905(l)(1)),''.

                              Subtitle D--Coverage

    SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-INCOME HIV-INFECTED
                  INDIVIDUALS.

        (a) In General.--Section 1902 of the Social Security Act (42 U.S.C.
    1396a), as amended by section 1714(a)(1), is amended--
                (1) in subsection (a)(10)(A)(ii)--
                        (A) by striking ``or'' at the end of subclause
                    (XIX);
                        (B) by adding ``or'' at the end of subclause (XX);
                    and
                        (C) by adding at the end the following:
                ``(XXI) who are described in subsection (ii) (relating to
            HIV-infected individuals);''; and
                (2) by adding at the end, as amended by sections 1703 and
            1714(a), the following:
        ``(ii) individuals described in this subsection are individuals not
    described in subsection (a)(10)(A)(i)--
                ``(1) who have HIV infection;
                ``(2) whose income (as determined under the State plan
            under this title with respect to disabled individuals) does not
            exceed the maximum amount of income a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan; and
                ``(3) whose resources (as determined under the State plan
            under this title with respect to disabled individuals) do not
            exceed the maximum amount of resources a disabled individual
            described in subsection (a)(10)(A)(i) may have and obtain
            medical assistance under the plan.''.
        (b) Enhanced Match.--The first sentence of section 1905(b) of such
    Act (42 U.S.C. 1396d(b)) is amended by striking ``section
    1902(a)(10)(A)(ii)(XVIII)'' and inserting ``subclause (XVIII) or (XX)
    of section 1902(a)(10)(A)(ii)''.
        (c) Conforming Amendments.--Section 1905(a) of such Act (42 U.S.C.
    1396d(a)) is amended, in the matter preceding paragraph (1)--
                (1) by striking ``or'' at the end of clause (xii);
                (2) by adding ``or'' at the end of clause (xiii); and
                (3) by inserting after clause (xiii) the following:
                                ``(xiv) individuals described in section
                            1902(ii),''.
        (d) Exemption From Funding Limitation for Territories.--Section
    1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is amended by
    adding at the end the following:
                ``(5) Disregarding medical assistance for optional low-
            income hiv-infected individuals.--The limitations under
            subsection (f) and the previous provisions of this subsection
            shall not apply to amounts expended for medical assistance for
            individuals described in section 1902(ii) who are only eligible
            for such assistance on the basis of section
            1902(a)(10)(A)(ii)(XX).''.
        (e) Effective Date; Sunset.--The amendments made by this section
    shall apply to expenditures for calendar quarters beginning on or after
    the date of the enactment of this Act, and before January 1, 2013,
    without regard to whether or not final regulations to carry out such
    amendments have been promulgated by such date.

    SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSISTANCE (TMA).

        Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42
    U.S.C. 1396a(e)(1)(B), 1396r-6(f)), as amended by section 5004(a)(1) of
    the American Recovery and Reinvestment Act of 2009 (Public Law 111-5),
    are each amended by striking ``December 31, 2010'' and inserting
    ``December 31, 2012''.

    SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COVERAGE UNDER CERTAIN
                  CHIP PROGRAMS.

        (a) In General.--Section 2102(b) of the Social Security Act (42
    U.S.C. 1397bb(b)) is amended by adding at the end the following new
    paragraph:
                ``(6) Requirement for 12-month continuous eligibility.--In
            the case of a State child health plan that provides child
            health assistance under this title through a means other than
            described in section 2101(a)(2), the plan shall provide for
            implementation under this title of the 12-month continuous
            eligibility option described in section 1902(e)(12) for
            targeted low-income children whose family income is below 200
            percent of the poverty line.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    apply to determinations (and redeterminations) of eligibility made on
    or after January 1, 2010.

                             Subtitle E--Financing

    SEC. 1741. PAYMENTS TO PHARMACISTS.

        (a) Pharmacy Reimbursement Limits.--
                (1) In general.--Section 1927(e) of the Social Security Act
            (42 U.S.C. 1396r-8(e)) is amended--
                        (A) by striking paragraph (5) and inserting the
                    following:
                ``(5) Use of amp in upper payment limits.--The Secretary
            shall calculate the Federal upper reimbursement limit
            established under paragraph (4) as 130 percent of the weighted
            average (determined on the basis of manufacturer utilization)
            of monthly average manufacturer prices.''.
                (2) Definition of amp.--Section 1927(k)(1)(B) of such Act
            (42 U.S.C. 1396r-8(k)(1)(B)) is amended--
                        (B) in the heading, by striking ``extended to
                    wholesalers'' and inserting ``and other payments''; and
                        (C) by striking ``regard to'' and all that follows
                    through the period and inserting the following:
                    ``regard to--
                                ``(i) customary prompt pay discounts
                            extended to wholesalers;
                                ``(ii) bona fide service fees paid by
                            manufacturers;
                                ``(iii) reimbursement by manufacturers for
                            recalled, damaged, expired, or otherwise
                            unsalable returned goods, including
                            reimbursement for the cost of the goods and any
                            reimbursement of costs associated with return
                            goods handling and processing, reverse
                            logistics, and drug destruction;
                                ``(iv) sales directly to, or rebates,
                            discounts, or other price concessions provided
                            to, pharmacy benefit managers, managed care
                            organizations, health maintenance
                            organizations, insurers, mail order pharmacies
                            that are not open to all members of the public,
                            or long term care providers, provided that
                            these rebates, discounts, or price concessions
                            are not passed through to retail pharmacies;
                                ``(v) sales directly to, or rebates,
                            discounts, or other price concessions provided
                            to, hospitals, clinics, and physicians, unless
                            the drug is an inhalation, infusion, or
                            injectable drug, or unless the Secretary
                            determines, as allowed for in Agency
                            administrative procedures, that it is necessary
                            to include such sales, rebates, discounts, and
                            price concessions in order to obtain an
                            accurate AMP for the drug. Such a determination
                            shall not be subject to judicial review; or
                                ``(vi) rebates, discounts, and other price
                            concessions required to be provided under
                            agreements under subsections (f) and (g) of
                            section 1860D-2(f).''.
                (3) Manufacturer reporting requirements.--Section
            1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                        (A) in subparagraph (A), by adding at the end the
                    following new clause:
                                ``(iv) not later than 30 days after the
                            last day of each month of a rebate period under
                            the agreement, on the manufacturer's total
                            number of units that are used to calculate the
                            monthly average manufacturer price for each
                            covered outpatient drug.''.
                (4) Authority to promulgate regulation.--The Secretary of
            Health and Human Services may promulgate regulations to clarify
            the requirements for upper payment limits and for the
            determination of the average manufacturer price in an expedited
            manner. Such regulations may become effective on an interim
            final basis, pending opportunity for public comment.
                (5) Pharmacy reimbursements through december 31, 2010.--The
            specific upper limit under section 447.332 of title 42, Code of
            Federal Regulations (as in effect on December 31, 2006)
            applicable to payments made by a State for multiple source
            drugs under a State Medicaid plan shall continue to apply
            through December 31, 2010, for purposes of the availability of
            Federal financial participation for such payments.
        (b) Disclosure of Price Information to the Public.--Section
    1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                (1) in subparagraph (A)--
                        (A) in clause (i), in the matter preceding
                    subclause (I), by inserting ``month of a'' after
                    ``each''; and
                        (B) in the last sentence, by striking ``and
                    shall,'' and all that follows through the period; and
                (2) in subparagraph (D)(v), by inserting ``weighted''
            before ``average manufacturer prices''.

    SEC. 1742. PRESCRIPTION DRUG REBATES.

        (a) Additional Rebate for New Formulations of Existing Drugs.--
                (1) In general.--Section 1927(c)(2) of the Social Security
            Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end
            the following new subparagraph:
                        ``(C) Treatment of new formulations.--In the case
                    of a drug that is a line extension of a single source
                    drug or an innovator multiple source drug that is an
                    oral solid dosage form, the rebate obligation with
                    respect to such drug under this section shall be the
                    amount computed under this section for such new drug
                    or, if greater, the product of--
                                ``(i) the average manufacturer price of the
                            line extension of a single source drug or an
                            innovator multiple source drug that is an oral
                            solid dosage form;
                                ``(ii) the highest additional rebate
                            (calculated as a percentage of average
                            manufacturer price) under this section for any
                            strength of the original single source drug or
                            innovator multiple source drug; and
                                ``(iii) the total number of units of each
                            dosage form and strength of the line extension
                            product paid for under the State plan in the
                            rebate period (as reported by the State).
                    In this subparagraph, the term `line extension' means,
                    with respect to a drug, an extended release formulation
                    of the drug.''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply to drugs dispensed after December 31, 2009.
        (b) Increase Minimum Rebate Percentage for Single Source Drugs.--
    Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r-
    8(c)(1)(B)(i)) is amended--
                (1) in subclause (IV), by striking ``and'' at the end;
                (2) in subclause (V)--
                        (A) by inserting ``and before January 1, 2010''
                    after ``December 31, 1995,''; and
                        (B) by striking the period at the end and inserting
                    ``; and''; and
                (3) by adding at the end the following new subclause:
                                        ``(VI) after December 31, 2009, is
                                    22.1 percent.''.

    SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF
                  MEDICAID MANAGED CARE ORGANIZATIONS.

        (a) In General.--Section 1903(m)(2)(A) of the Social Security Act
    (42 U.S.C. 1396b(m)(2)(A)) is amended--
                (1) in clause (xi), by striking ``and'' at the end;
                (2) in clause (xii), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(xiii) such contract provides that the entity shall
            report to the State such information, on such timely and
            periodic basis as specified by the Secretary, as the State may
            require in order to include, in the information submitted by
            the State to a manufacturer under section 1927(b)(2)(A),
            information on covered outpatient drugs dispensed to
            individuals eligible for medical assistance who are enrolled
            with the entity and for which the entity is responsible for
            coverage of such drugs under this subsection.''.
        (b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C.
    1396r-8) is amended----
                (1) in the first sentence of subsection (b)(1)(A), by
            inserting before the period at the end the following: ``,
            including such drugs dispensed to individuals enrolled with a
            medicaid managed care organization if the organization is
            responsible for coverage of such drugs'';
                (2) in subsection (b)(2), by adding at the end the
            following new subparagraph:
                        ``(C) Reporting on mmco drugs.--On a quarterly
                    basis, each State shall report to the Secretary the
                    total amount of rebates in dollars received from
                    pharmacy manufacturers for drugs provided to
                    individuals enrolled with Medicaid managed care
                    organizations that contract under section 1903(m).'';
                    and
                (3) in subsection (j)--
                        (A) in the heading by striking ``Exemption'' and
                    inserting ``Special Rules''; and
                        (B) in paragraph (1), by striking ``not''.
        (c) Effective Date.--The amendments made by this section take
    effect on July 1, 2010, and shall apply to drugs dispensed on or after
    such date, without regard to whether or not final regulations to carry
    out such amendments have been promulgated by such date.

    SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDUCATION.

        (a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
    1396d), as amended by sections 1701(a)(2), 1711(a), and 1713(a), is
    amended by adding at the end the following new subsection:
        ``(bb) Payment for Graduate Medical Education.--
                ``(1) In general.--The term `medical assistance' includes
            payment for costs of graduate medical education consistent with
            this subsection, whether provided in or outside of a hospital.
                ``(2) Submission of information.--For purposes of paragraph
            (1) and section 1902(a)(13)(A)(v), payment for such costs is
            not consistent with this subsection unless--
                        ``(A) the State submits to the Secretary, in a
                    timely manner and on an annual basis specified by the
                    Secretary, information on total payments for graduate
                    medical education and how such payments are being used
                    for graduate medical education, including--
                                ``(i) the institutions and programs
                            eligible for receiving the funding;
                                ``(ii) the manner in which such payments
                            are calculated;
                                ``(iii) the types and fields of education
                            being supported;
                                ``(iv) the workforce or other goals to
                            which the funding is being applied;
                                ``(v) State progress in meeting such goals;
                            and
                                ``(vi) such other information as the
                            Secretary determines will assist in carrying
                            out paragraphs (3) and (4); and
                        ``(B) such expenditures are made consistent with
                    such goals and requirements as are established under
                    paragraph (4).
                ``(3) Review of information.--The Secretary shall make the
            information submitted under paragraph (2) available to the
            Advisory Committee on Health Workforce Evaluation and
            Assessment (established under section 2261 of the Public Health
            Service Act). The Secretary and the Advisory Committee shall
            independently review the information submitted under paragraph
            (2), taking into account State and local workforce needs.
                ``(4) Specification of goals and requirements.--The
            Secretary shall specify by rule, initially published by not
            later than December 31, 2011--
                        ``(A) program goals for the use of funds described
                    in paragraph (1), taking into account recommendations
                    of the such Advisory Committee and the goals for
                    approved medical residency training programs described
                    in section 1886(h)(1)(B); and
                        ``(B) requirements for use of such funds consistent
                    with such goals.
            Such rule may be effective on an interim basis pending revision
            after an opportunity for public comment.''.
        (b) Conforming Amendment.--Section 1902(a)(13)(A) of such Act (42
    U.S.C. 1396a(a)(13)(A)) is amended--
                (1) by striking ``and'' at the end of clause (iii);
                (2) by striking ``; and'' and inserting ``, and''; and
                (3) by adding at the end the following new clause:
                                ``(v) in the case of hospitals and at the
                            option of a State, such rates may include, to
                            the extent consistent with section 1905(bb),
                            payment for graduate medical education; and''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the date of the enactment of this Act. Nothing in this
    section shall be construed as affecting payments made before such date
    under a State plan under title XIX of the Social Security Act for
    graduate medical education.

                      Subtitle F--Waste, Fraud, and Abuse

    SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS.

        (a) Medicaid Non-Payment for Certain Health Care-Acquired
    Conditions.--Section 1903(i) of the Social Security Act (42 U.S.C.
    1396b(i)) is amended--
                (1) by striking ``or'' at the end of paragraph (23);
                (2) by striking the period at the end of paragraph (24) and
            inserting ``; or''; and
                (3) by inserting after paragraph (24) the following new
            paragraph:
                ``(25) with respect to amounts expended for services
            related to the presence of a condition that could be identified
            by a secondary diagnostic code described in section
            1886(d)(4)(D)(iv) and for any health care acquired condition
            determined as a non-covered service under title XVIII.''.
        (b) Application to CHIP.--Section 2107(e)(1)(G) of such Act (42
    U.S.C. 1397gg(e)(1)(G)) is amended by striking ``and (17)'' and
    inserting ``(17), and (25)''.
        (c) Permission To Include Additional Health Care-Acquired
    Conditions.--Nothing in this section shall prevent a State from
    including additional health care-acquired conditions for non-payment in
    its Medicaid program under title XIX of the Social Security Act.
        (d) Effective Date.--The amendments made by this section shall
    apply to discharges occurring on or after January 1, 2010.

    SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICAID INTEGRITY
                  PROGRAM.

        Section 1936(c)(2)) of the Social Security Act (42 U.S.C. 1396u-
    7(c)(2)) is amended--
                (1) by redesignating subparagraph (D) as subparagraph (E);
            and
                (2) by inserting after subparagraph (C) the following new
            subparagraph:
                        ``(D) For the contract year beginning in 2011 and
                    each subsequent contract year, the entity provides
                    assurances to the satisfaction of the Secretary that
                    the entity will conduct periodic evaluations of the
                    effectiveness of the activities carried out by such
                    entity under the Program and will submit to the
                    Secretary an annual report on such activities.''.

    SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE
                  WASTE, FRAUD, AND ABUSE.

        Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as
    amended by sections 1631(b)(1) and 1703, is further amended--
                (1) in paragraph (74), by striking at the end ``and'';
                (2) in paragraph (75), by striking at the end the period
            and inserting ``; and''; and
                (3) by inserting after paragraph (75) the following new
            paragraph:
                ``(76) provide that any provider or supplier (other than a
            physician or nursing facility) providing services under such
            plan shall, subject to paragraph (5) of section 1874(d),
            establish a compliance program described in paragraph (1) of
            such section in accordance with such section.''.

    SEC. 1754. OVERPAYMENTS.

        (a) In General.--Section 1903(d)(2)(C) of the Social Security Act
    (42 U.S.C. 1396b(d)(2)(C)) is amended by inserting ``(or 1 year in the
    case of overpayments due to fraud)'' after ``60 days''.
        (b) Effective Date.--In the case overpayments discovered on or
    after the date of the enactment of this Act.

    SEC. 1755. MANAGED CARE ORGANIZATIONS.

        (a) Minimum Medical Loss Ratio.--
                (1) Medicaid.--Section 1903(m)(2)(A) of the Social Security
            Act (42 U.S.C. 1396b(m)(2)(A)), as amended by section
            1743(a)(3), is amended--
                        (A) by striking ``and'' at the end of clause (xii);
                        (B) by striking the period at the end of clause
                    (xiii) and inserting ``; and''; and
                        (C) by adding at the end the following new clause:
                ``(xiv) such contract has a medical loss ratio, as
            determined in accordance with a methodology specified by the
            Secretary that is a percentage (not less than 85 percent) as
            specified by the Secretary.''.
                (2) CHIP.--Section 2107(e)(1) of such Act (42 U.S.C.
            1397gg(e)(1)) is amended--
                        (A) by redesignating subparagraphs (H) through (L)
                    as subparagraphs (I) through (M); and
                        (B) by inserting after subparagraph (G) the
                    following new subparagraph:
                        ``(H) Section 1903(m)(2)(A)(xiv) (relating to
                    application of minimum loss ratios), with respect to
                    comparable contracts under this title.''.
                (3) Effective date.--The amendments made by this subsection
            shall apply to contracts entered into or renewed on or after
            July 1, 2010.
        (b) Patient Encounter Data.--
                (1) In general.--Section 1903(m)(2)(A)(xi) of the Social
            Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by
            inserting ``and for the provision of such data to the State at
            a frequency and level of detail to be specified by the
            Secretary'' after ``patients''.
                (2) Effective date.--The amendment made by paragraph (1)
            shall apply with respect to contract years beginning on or
            after January 1, 2010.

    SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID AND
                  CHIP IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN OR
                  CHILD HEALTH PLAN.

        (a) State Plan Requirement.--Section 1902(a)(39) of the Social
    Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting
    after ``1128A,'' the following: ``terminate the participation of any
    individual or entity in such program if (subject to such exceptions are
    permitted with respect to exclusion under sections 1128(b)(3)(C) and
    1128(d)(3)(B)) participation of such individual or entity is terminated
    under title XVIII, any other State plan under this title, or any child
    health plan under title XXI,''.
        (b) Application to CHIP.--Section 2107(e)(1)(A) of such Act (42
    U.S.C. 1397gg(e)(1)(A)) is amended by inserting before the period at
    the end the following: ``and section 1902(a)(39) (relating to exclusion
    and termination of participation)''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after January 1, 2011, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act or a child health
            plan under title XXI of such Act which the Secretary of Health
            and Human Services determines requires State legislation (other
            than legislation appropriating funds) in order for the plan to
            meet the additional requirement imposed by the amendments made
            by this section, the State plan or child health plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATION RELATING TO
                  CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

        (a) State Plan Requirement.--Section 1902(a) of the Social Security
    Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703, and
    1753, is further amended--
                (1) in paragraph (75), by striking at the end ``and'';
                (2) in paragraph (76), by striking at the end the period
            and inserting ``; and''; and
                (3) by inserting after paragraph (76) the following new
            paragraph:
                ``(77) provide that the State agency described in paragraph
            (9) exclude, with respect to a period, any individual or entity
            from participation in the program under the State plan if such
            individual or entity owns, controls, or manages an entity that
            (or if such entity is owned, controlled, or managed by an
            individual or entity that)--
                        ``(A) has unpaid overpayments under this title
                    during such period determined by the Secretary or the
                    State agency to be delinquent;
                        ``(B) is suspended or excluded from participation
                    under or whose participation is terminated under this
                    title during such period; or
                        ``(C) is affiliated with an individual or entity
                    that has been suspended or excluded from participation
                    under this title or whose participation is terminated
                    under this title during such period.''.
        (b) Child Health Plan Requirement.--Section 2107(e)(1)(A) of such
    Act (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is
    amended by striking ``section 1902(a)(39)'' and inserting ``sections
    1902(a)(39) and 1902(a)(77)''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to services furnished on or
            after January 1, 2011, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act or a child health
            plan under title XXI of such Act which the Secretary of Health
            and Human Services determines requires State legislation (other
            than legislation appropriating funds) in order for the plan to
            meet the additional requirement imposed by the amendments made
            by this section, the State plan or child health plan shall not
            be regarded as failing to comply with the requirements of such
            title solely on the basis of its failure to meet this
            additional requirement before the first day of the first
            calendar quarter beginning after the close of the first regular
            session of the State legislature that begins after the date of
            the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER
                  MMIS TO DETECT FRAUD AND ABUSE.

        Section 1903(r)(1)(F) of the Social Security Act (42 U.S.C.
    1396b(r)(1)(F)) is amended by inserting after ``necessary'' the
    following: ``and including, for data submitted to the Secretary on or
    after July 1, 2010, data elements from the automated data system that
    the Secretary determines to be necessary for detection of waste, fraud,
    and abuse''.

    SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES
                  REQUIRED TO REGISTER UNDER MEDICAID.

        (a) In General.--Section 1902(a) of the Social Security Act (42
    U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703, 1753,
    and 1757, is further amended--
                (1) in paragraph (76); by striking at the end ``and'';
                (2) in paragraph (77), by striking the period at the end
            and inserting ``and''; and
                (3) by inserting after paragraph (77) the following new
            paragraph:
                ``(78) provide that any agent, clearinghouse, or other
            alternate payee that submits claims on behalf of a health care
            provider must register with the State and the Secretary in a
            form and manner specified by the Secretary under section
            1866(j)(1)(D).''.
        (b) Denial of Payment.--Section 1903(i) of such Act (42 U.S.C.
    1396b(i)), as amended by section 1753, is amended--
                (1) by striking ``or'' at the end of paragraph (24);
                (2) by striking the period at the end of paragraph (25) and
            inserting ``; or''; and
                (3) by inserting after paragraph (25) the following new
            paragraph:
                ``(26) with respect to any amount paid to a billing agent,
            clearinghouse, or other alternate payee that is not registered
            with the State and the Secretary as required under section
            1902(a)(78).''.
        (c) Effective Date.--
                (1) Except as provided in paragraph (2), the amendments
            made by this section shall apply to claims submitted on or
            after January 1, 2012, without regard to whether or not final
            regulations to carry out such amendments have been promulgated
            by such date.
                (2) In the case of a State plan for medical assistance
            under title XIX of the Social Security Act which the Secretary
            of Health and Human Services determines requires State
            legislation (other than legislation appropriating funds) in
            order for the plan to meet the additional requirement imposed
            by the amendments made by this section, the State plan or child
            health plan shall not be regarded as failing to comply with the
            requirements of such title solely on the basis of its failure
            to meet this additional requirement before the first day of the
            first calendar quarter beginning after the close of the first
            regular session of the State legislature that begins after the
            date of the enactment of this Act. For purposes of the previous
            sentence, in the case of a State that has a 2-year legislative
            session, each year of such session shall be deemed to be a
            separate regular session of the State legislature.

    SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RELATED MISCONDUCT.

        (a) In General.--Section 1903(i) of the Social Security Act (42
    U.S.C. 1396b(i)), as previously amended is amended--
                (1) by striking ``or'' at the end of paragraph (25);
                (2) by striking the period at the end of paragraph (26) and
            inserting a semicolon; and
                (3) by inserting after paragraph (26) the following new
            paragraphs:
                ``(27) with respect to any amount expended--
                        ``(A) on litigation in which a court imposes
                    sanctions on the State, its employees, or its counsel
                    for litigation-related misconduct; or
                        ``(B) to reimburse (or otherwise compensate) a
                    managed care entity for payment of legal expenses
                    associated with any action in which a court imposes
                    sanctions on the managed care entity for litigation-
                    related misconduct.''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    apply to amounts expended on or after January 1, 2010.

                  Subtitle G--Puerto Rico and the Territories

    SEC. 1771. PUERTO RICO AND TERRITORIES.

        (a) Increase in Cap.--
                (1) In general.--Section 1108(g) of the Social Security Act
            (42 U.S.C. 1308(g)) is amended--
                        (A) in paragraph (4) by striking ``and (3)'' and by
                    inserting ``(3), (6), and (7)''; and
                        (B) by inserting after paragraph (5), as added by
                    section 1731(d), the following new paragraph:
                ``(6) Fiscal years 2011 through 2019.--The amounts
            otherwise determined under this subsection for Puerto Rico, the
            Virgin Islands, Guam, the Northern Mariana Islands, and
            American Samoa for fiscal year 2011 and each succeeding fiscal
            year through fiscal year 2019 shall be increased by the
            percentage specified under section 1771(c) of the America's
            Affordable Health Choices Act of 2009 for purposes of this
            paragraph of the amounts otherwise determined under this
            section (without regard to this paragraph).
                ``(7) Fiscal year 2020 and subsequent fiscal years.--The
            amounts otherwise determined under this subsection for Puerto
            Rico, the Virgin Islands, Guam, the Northern Mariana Islands,
            and American Samoa for fiscal year 2020 and each succeeding
            fiscal year shall be the amount provided in paragraph (6) or
            this paragraph for the preceding fiscal year for the respective
            territory increased by the percentage increase referred to in
            paragraph (1)(B), rounded to the nearest $10,000 (or $100,000
            in the case of Puerto Rico).''.
                (2) Coordination with arra.--Section 5001(d) of the
            American Recovery and Reinvestment Act of 2009 shall not apply
            during any period for which section 1108(g)(6) of the Social
            Security Act, as added by paragraph (1), applies.
        (b) Increase in FMAP.--
                (1) In general.--Section 1905(b)(2) of the Social Security
            Act (42 U.S.C. 1396d(b)(2)) is amended by striking ``50 per
            centum'' and inserting ``for fiscal years 2011 through 2019,
            the percentage specified under section 1771(c) of the America's
            Affordable Health Choices Act of 2009 for purposes of this
            clause for such fiscal year and for subsequent fiscal years the
            percentage so specified for fiscal year 2019''.
                (2) Effective date.--The amendment made by subsection (a)
            shall apply to items and services furnished on or after October
            1, 2010.
        (c) Specification of Percentages.--The Secretary of Health and
    Human Services shall specify, before January 1, 2011, the percentages
    to be applied under section 1108(g)(6) of the Social Security Act, as
    added by subsection (a)(1), and under section 1905(b)(2) of such Act,
    as amended by subsection (b)(1), in a manner so that for the period
    beginning with 2011 and ending with 2019 the total estimated additional
    Federal expenditures resulting from the application of such percentages
    will be equal to $10,350,000,000.

                           Subtitle H--Miscellaneous

    SEC. 1781. TECHNICAL CORRECTIONS.

        (a) Technical Correction to Section 1144 of the Social Security
    Act.--The first sentence of section 1144(c)(3) of the Social Security
    Act (42 U.S.C. 1320b--14(c)(3)) is amended--
                (1) by striking ``transmittal''; and
                (2) by inserting before the period the following: ``as
            specified in section 1935(a)(4)''.
        (b) Clarifying Amendment to Section 1935 of the Social Security
    Act.--Section 1935(a)(4) of the Social Security Act (42 U.S.C. 1396u--
    5(a)(4)), as amended by section 113(b) of Public Law 110-275, is
    amended--
                (1) by striking the second sentence;
                (2) by redesignating the first sentence as a subparagraph
            (A) with appropriate indentation and with the following
            heading: ``In general'';
                (3) by adding at the end the following subparagraphs:
                        ``(B) Furnishing medical assistance with reasonable
                    promptness.--For the purpose of a State's obligation
                    under section 1902(a)(8) to furnish medical assistance
                    with reasonable promptness, the date of the electronic
                    transmission of low-income subsidy program data, as
                    described in section 1144(c), from the Commissioner of
                    Social Security to the State Medicaid Agency, shall
                    constitute the date of filing of such application for
                    benefits under the Medicare Savings Program.
                        ``(C) Determining availability of medical
                    assistance.--For the purpose of determining when
                    medical assistance will be made available, the State
                    shall consider the date of the individual's application
                    for the low income subsidy program to constitute the
                    date of filing for benefits under the Medicare Savings
                    Program.''.
        (c) Effective Date Relating to Medicaid Agency Consideration of
    Low-income Subsidy Application and Data Transmittal.--The amendments
    made by subsections (a) and (b) shall be effective as if included in
    the enactment of section 113(b) of Public Law 110-275.
        (d) Technical Correction to Section 605 of CHIPRA.--Section 605 of
    the Children's Health Insurance Program Reauthorization Act of 2009
    (Public Law 111-3) is amended by striking ``legal residents'' and
    inserting ``lawfully residing in the United States''.
        (e) Technical Correction to Section 1905 of the Social Security
    Act.--Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a))
    is amended by inserting ``or the care and services themselves, or
    both'' before ``(if provided in or after''.
        (f) Clarifying Amendment to Section 1115 of the Social Security
    Act.--Section 1115(a) of the Social Security Act (42 U.S.C. 1315(a)) is
    amended by adding at the end the following: ``If an experimental,
    pilot, or demonstration project that relates to title XIX is approved
    pursuant to any part of this subsection, such project shall be treated
    as part of the State plan, all medical assistance provided on behalf of
    any individuals affected by such project shall be medical assistance
    provided under the State plan, and all provisions of this Act not
    explicitly waived in approving such project shall remain fully
    applicable to all individuals receiving benefits under the State
    plan.''.

    SEC. 1782. EXTENSION OF QI PROGRAM.

        (a) In General.--Section 1902(a)(10)(E)(iv) of the Social Security
    Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is amended--
                (1) by striking ``sections 1933 and'' and by inserting
            ``section''; and
                (2) by striking ``December 2010'' and inserting ``December
            2012''.
        (b) Elimination of Funding Limitation.--
                (1) In general.--Section 1933 of such Act (42 U.S.C. 1396u-
            3) is amended--
                        (A) in subsection (a), by striking ``who are
                    selected to receive such assistance under subsection
                    (b)'';
                        (B) by striking subsections (b), (c), (e), and (g);
                        (C) in subsection (d), by striking ``furnished in a
                    State'' and all that follows and inserting ``the
                    Federal medical assistance percentage shall be equal to
                    100 percent.''; and
                        (D) by redesignating subsections (d) and (f) as
                    subsections (b) and (c), respectively.
                (2) Conforming amendment.--Section 1905(b) of such Act (42
            U.S.C. 1396d(b)) is amended by striking ``1933(d)'' and
            inserting ``1933(b)''.
                (3) Effective date.--The amendments made by paragraph (1)
            shall take effect on January 1, 2011.

                      TITLE P--REVENUE-RELATED PROVISIONS

    SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION OF INDIVIDUALS
                  LIKELY TO BE INELIGIBLE FOR THE LOW-INCOME ASSISTANCE
                  UNDER THE MEDICARE PRESCRIPTION DRUG PROGRAM TO ASSIST
                  SOCIAL SECURITY ADMINISTRATION'S OUTREACH TO ELIGIBLE
                  INDIVIDUALS.

        (a) In General.--Paragraph (19) of section 6103(l) of the Internal
    Revenue Code of 1986 is amended to read as follows:
                ``(19) Disclosures to facilitate identification of
            individuals likely to be ineligible for low-income subsidies
            under medicare prescription drug program to assist social
            security administration's outreach to eligible individuals.--
                        ``(A) In general.--Upon written request from the
                    Commissioner of Social Security, the following return
                    information (including such information disclosed to
                    the Social Security Administration under paragraph (1)
                    or (5)) shall be disclosed to officers and employees of
                    the Social Security Administration, with respect to any
                    taxpayer identified by the Commissioner of Social
                    Security--
                                ``(i) return information for the applicable
                            year from returns with respect to wages (as
                            defined in section 3121(a) or 3401(a)) and
                            payments of retirement income (as described in
                            paragraph (1) of this subsection),
                                ``(ii) unearned income information and
                            income information of the taxpayer from
                            partnerships, trusts, estates, and subchapter S
                            corporations for the applicable year,
                                ``(iii) if the individual filed an income
                            tax return for the applicable year, the filing
                            status, number of dependents, income from
                            farming, and income from self-employment, on
                            such return,
                                ``(iv) if the individual is a married
                            individual filing a separate return for the
                            applicable year, the social security number (if
                            reasonably available) of the spouse on such
                            return,
                                ``(v) if the individual files a joint
                            return for the applicable year, the social
                            security number, unearned income information,
                            and income information from partnerships,
                            trusts, estates, and subchapter S corporations
                            of the individual's spouse on such return, and
                                ``(vi) such other return information
                            relating to the individual (or the individual's
                            spouse in the case of a joint return) as is
                            prescribed by the Secretary by regulation as
                            might indicate that the individual is likely to
                            be ineligible for a low-income prescription
                            drug subsidy under section 1860D-14 of the
                            Social Security Act.
                        ``(B) Applicable year.--For the purposes of this
                    paragraph, the term `applicable year' means the most
                    recent taxable year for which information is available
                    in the Internal Revenue Service's taxpayer information
                    records.
                        ``(C) Restriction on individuals for whom
                    disclosure may be requested.--The Commissioner of
                    Social Security shall request information under this
                    paragraph only with respect to--
                                ``(i) individuals the Social Security
                            Administration has identified, using all other
                            reasonably available information, as likely to
                            be eligible for a low-income prescription drug
                            subsidy under section 1860D-14 of the Social
                            Security Act and who have not applied for such
                            subsidy, and
                                ``(ii) any individual the Social Security
                            Administration has identified as a spouse of an
                            individual described in clause (i).
                        ``(D) Restriction on use of disclosed
                    information.--Return information disclosed under this
                    paragraph may be used only by officers and employees of
                    the Social Security Administration solely for purposes
                    of identifying individuals likely to be ineligible for
                    a low-income prescription drug subsidy under section
                    1860D-14 of the Social Security Act for use in outreach
                    efforts under section 1144 of the Social Security
                    Act.''.
        (b) Safeguards.--Paragraph (4) of section 6103(p) of such Code is
    amended--
                (1) by striking ``(l)(19)'' each place it appears, and
                (2) by striking ``or (17)'' each place it appears and
            inserting ``(17), or (19)''.
        (c) Conforming Amendment.--Paragraph (3) of section 6103(a) of such
    Code is amended by striking ``(19),''.
        (d) Effective Date.--The amendments made by this section shall
    apply to disclosures made after the date which is 12 months after the
    date of the enactment of this Act.

    SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND; FINANCING FOR
                  TRUST FUND.

        (a) Establishment of Trust Fund.--
                (1) In general.--Subchapter A of chapter 98 of the Internal
            Revenue Code of 1986 (relating to trust fund code) is amended
            by adding at the end the following new section:

    ``SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND.

        ``(a) Creation of Trust Fund.--There is established in the Treasury
    of the United States a trust fund to be known as the `Health Care
    Comparative Effectiveness Research Trust Fund' (hereinafter in this
    section referred to as the `CERTF'), consisting of such amounts as may
    be appropriated or credited to such Trust Fund as provided in this
    section and section 9602(b).
        ``(b) Transfers to Fund.--There are hereby appropriated to the
    Trust Fund the following:
                ``(1) For fiscal year 2010, $90,000,000.
                ``(2) For fiscal year 2011, $100,000,000.
                ``(3) For fiscal year 2012, $110,000,000.
                ``(4) For each fiscal year beginning with fiscal year
            2013--
                        ``(A) an amount equivalent to the net revenues
                    received in the Treasury from the fees imposed under
                    subchapter B of chapter 34 (relating to fees on health
                    insurance and self-insured plans) for such fiscal year;
                    and
                        ``(B) subject to subsection (c)(2), amounts
                    determined by the Secretary of Health and Human
                    Services to be equivalent to the fair share per capita
                    amount computed under subsection (c)(1) for the fiscal
                    year multiplied by the average number of individuals
                    entitled to benefits under part A, or enrolled under
                    part B, of title XVIII of the Social Security Act
                    during such fiscal year.
    The amounts appropriated under paragraphs (1), (2), (3), and (4)(B)
    shall be transferred from the Federal Hospital Insurance Trust Fund and
    from the Federal Supplementary Medical Insurance Trust Fund
    (established under section 1841 of such Act), and from the Medicare
    Prescription Drug Account within such Trust Fund, in proportion (as
    estimated by the Secretary) to the total expenditures during such
    fiscal year that are made under title XVIII of such Act from the
    respective trust fund or account.
        ``(c) Fair Share Per Capita Amount.--
                ``(1) Computation.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    fair share per capita amount under this paragraph for a
                    fiscal year (beginning with fiscal year 2013) is an
                    amount computed by the Secretary of Health and Human
                    Services for such fiscal year that, when applied under
                    this section and subchapter B of chapter 34 of the
                    Internal Revenue Code of 1986, will result in revenues
                    to the CERTF of $375,000,000 for the fiscal year.
                        ``(B) Alternative computation.--
                                ``(i) In general.--If the Secretary is
                            unable to compute the fair share per capita
                            amount under subparagraph (A) for a fiscal
                            year, the fair share per capita amount under
                            this paragraph for the fiscal year shall be the
                            default amount determined under clause (ii) for
                            the fiscal year.
                                ``(ii) Default amount.--The default amount
                            under this clause for--
                                        ``(I) fiscal year 2013 is equal to
                                    $2; or
                                        ``(II) a subsequent year is equal
                                    to the default amount under this clause
                                    for the preceding fiscal year increased
                                    by the annual percentage increase in
                                    the medical care component of the
                                    consumer price index (United States
                                    city average) for the 12-month period
                                    ending with April of the preceding
                                    fiscal year.
                            Any amount determined under subclause (II)
                            shall be rounded to the nearest penny.
                ``(2) Limitation on medicare funding.--In no case shall the
            amount transferred under subsection (b)(4)(B) for any fiscal
            year exceed $90,000,000.
        ``(d) Expenditures From Fund.--
                ``(1) In general.--Subject to paragraph (2), amounts in the
            CERTF are available, without the need for further
            appropriations and without fiscal year limitation, to the
            Secretary of Health and Human Services for carrying out section
            1181 of the Social Security Act.
                ``(2) Allocation for commission.--Not less than the
            following amounts in the CERTF for a fiscal year shall be
            available to carry out the activities of the Comparative
            Effectiveness Research Commission established under section
            1181(b) of the Social Security Act for such fiscal year:
                        ``(A) For fiscal year 2010, $7,000,000.
                        ``(B) For fiscal year 2011, $9,000,000.
                        ``(C) For each fiscal year beginning with 2012,
                    $10,000,000.
            Nothing in this paragraph shall be construed as preventing
            additional amounts in the CERTF from being made available to
            the Comparative Effectiveness Research Commission for such
            activities.
        ``(e) Net Revenues.--For purposes of this section, the term `net
    revenues' means the amount estimated by the Secretary based on the
    excess of--
                ``(1) the fees received in the Treasury under subchapter B
            of chapter 34, over
                ``(2) the decrease in the tax imposed by chapter 1
            resulting from the fees imposed by such subchapter.''.
                (2) Clerical amendment.--The table of sections for such
            subchapter A is amended by adding at the end thereof the
            following new item:

    ``Sec. 9511. Health Care Comparative Effectiveness Research Trust
                                Fund.''.
        (b) Financing for Fund From Fees on Insured and Self-Insured Health
    Plans.--
                (1) General rule.--Chapter 34 of the Internal Revenue Code
            of 1986 is amended by adding at the end the following new
            subchapter:

             ``Subchapter B--Insured and Self-Insured Health Plans

    ``Sec. 4375. Health insurance.
    ``Sec. 4376. Self-insured health plans.
    ``Sec. 4377. Definitions and special rules.

    ``SEC. 4375. HEALTH INSURANCE.

        ``(a) Imposition of Fee.--There is hereby imposed on each specified
    health insurance policy for each policy year a fee equal to the fair
    share per capita amount determined under section 9511(c)(1) multiplied
    by the average number of lives covered under the policy.
        ``(b) Liability for Fee.--The fee imposed by subsection (a) shall
    be paid by the issuer of the policy.
        ``(c) Specified Health Insurance Policy.--For purposes of this
    section:
                ``(1) In general.--Except as otherwise provided in this
            section, the term `specified health insurance policy' means any
            accident or health insurance policy issued with respect to
            individuals residing in the United States.
                ``(2) Exemption for certain policies.--The term `specified
            health insurance policy' does not include any insurance if
            substantially all of its coverage is of excepted benefits
            described in section 9832(c).
                ``(3) Treatment of prepaid health coverage arrangements.--
                        ``(A) In general.--In the case of any arrangement
                    described in subparagraph (B)--
                                ``(i) such arrangement shall be treated as
                            a specified health insurance policy, and
                                ``(ii) the person referred to in such
                            subparagraph shall be treated as the issuer.
                        ``(B) Description of arrangements.--An arrangement
                    is described in this subparagraph if under such
                    arrangement fixed payments or premiums are received as
                    consideration for any person's agreement to provide or
                    arrange for the provision of accident or health
                    coverage to residents of the United States, regardless
                    of how such coverage is provided or arranged to be
                    provided.

    ``SEC. 4376. SELF-INSURED HEALTH PLANS.

        ``(a) Imposition of Fee.--In the case of any applicable self-
    insured health plan for each plan year, there is hereby imposed a fee
    equal to the fair share per capita amount determined under section
    9511(c)(1) multiplied by the average number of lives covered under the
    plan.
        ``(b) Liability for Fee.--
                ``(1) In general.--The fee imposed by subsection (a) shall
            be paid by the plan sponsor.
                ``(2) Plan sponsor.--For purposes of paragraph (1) the term
            `plan sponsor' means--
                        ``(A) the employer in the case of a plan
                    established or maintained by a single employer,
                        ``(B) the employee organization in the case of a
                    plan established or maintained by an employee
                    organization,
                        ``(C) in the case of--
                                ``(i) a plan established or maintained by 2
                            or more employers or jointly by 1 or more
                            employers and 1 or more employee organizations,
                                ``(ii) a multiple employer welfare
                            arrangement, or
                                ``(iii) a voluntary employees' beneficiary
                            association described in section 501(c)(9),
                    the association, committee, joint board of trustees, or
                    other similar group of representatives of the parties
                    who establish or maintain the plan, or
                        ``(D) the cooperative or association described in
                    subsection (c)(2)(F) in the case of a plan established
                    or maintained by such a cooperative or association.
        ``(c) Applicable Self-Insured Health Plan.--For purposes of this
    section, the term `applicable self-insured health plan' means any plan
    for providing accident or health coverage if--
                ``(1) any portion of such coverage is provided other than
            through an insurance policy, and
                ``(2) such plan is established or maintained--
                        ``(A) by one or more employers for the benefit of
                    their employees or former employees,
                        ``(B) by one or more employee organizations for the
                    benefit of their members or former members,
                        ``(C) jointly by 1 or more employers and 1 or more
                    employee organizations for the benefit of employees or
                    former employees,
                        ``(D) by a voluntary employees' beneficiary
                    association described in section 501(c)(9),
                        ``(E) by any organization described in section
                    501(c)(6), or
                        ``(F) in the case of a plan not described in the
                    preceding subparagraphs, by a multiple employer welfare
                    arrangement (as defined in section 3(40) of Employee
                    Retirement Income Security Act of 1974), a rural
                    electric cooperative (as defined in section
                    3(40)(B)(iv) of such Act), or a rural telephone
                    cooperative association (as defined in section
                    3(40)(B)(v) of such Act).

    ``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

        ``(a) Definitions.--For purposes of this subchapter--
                ``(1) Accident and health coverage.--The term `accident and
            health coverage' means any coverage which, if provided by an
            insurance policy, would cause such policy to be a specified
            health insurance policy (as defined in section 4375(c)).
                ``(2) Insurance policy.--The term `insurance policy' means
            any policy or other instrument whereby a contract of insurance
            is issued, renewed, or extended.
                ``(3) United states.--The term `United States' includes any
            possession of the United States.
        ``(b) Treatment of Governmental Entities.--
                ``(1) In general.--For purposes of this subchapter--
                        ``(A) the term `person' includes any governmental
                    entity, and
                        ``(B) notwithstanding any other law or rule of law,
                    governmental entities shall not be exempt from the fees
                    imposed by this subchapter except as provided in
                    paragraph (2).
                ``(2) Treatment of exempt governmental programs.--In the
            case of an exempt governmental program, no fee shall be imposed
            under section 4375 or section 4376 on any covered life under
            such program.
                ``(3) Exempt governmental program defined.--For purposes of
            this subchapter, the term `exempt governmental program' means--
                        ``(A) any insurance program established under title
                    XVIII of the Social Security Act,
                        ``(B) the medical assistance program established by
                    title XIX or XXI of the Social Security Act,
                        ``(C) any program established by Federal law for
                    providing medical care (other than through insurance
                    policies) to individuals (or the spouses and dependents
                    thereof) by reason of such individuals being--
                                ``(i) members of the Armed Forces of the
                            United States, or
                                ``(ii) veterans, and
                        ``(D) any program established by Federal law for
                    providing medical care (other than through insurance
                    policies) to members of Indian tribes (as defined in
                    section 4(d) of the Indian Health Care Improvement
                    Act).
        ``(c) Treatment as Tax.--For purposes of subtitle F, the fees
    imposed by this subchapter shall be treated as if they were taxes.
        ``(d) No Cover Over to Possessions.--Notwithstanding any other
    provision of law, no amount collected under this subchapter shall be
    covered over to any possession of the United States.''.
                (2) Clerical amendments.--
                        (A) Chapter 34 of such Code is amended by striking
                    the chapter heading and inserting the following:

               ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

              ``subchapter a. policies issued by foreign insurers

             ``subchapter b. insured and self-insured health plans

             ``Subchapter A--Policies Issued By Foreign Insurers''.

                        (B) The table of chapters for subtitle D of such
                    Code is amended by striking the item relating to
                    chapter 34 and inserting the following new item:

              ``Chapter 34--Taxes on Certain Insurance Policies''.

                (3) Effective date.--The amendments made by this subsection
            shall apply with respect to policies and plans for portions of
            policy or plan years beginning on or after October 1, 2012.

                       TITLE Q--MISCELLANEOUS PROVISIONS

    SEC. 1901. REPEAL OF TRIGGER PROVISION.

        Subtitle A of title VIII of the Medicare Prescription Drug,
    Improvement, and Modernization Act of 2003 (Public Law 108-173) is
    repealed and the provisions of law amended by such subtitle are
    restored as if such subtitle had never been enacted.

    SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM.

        Section 1860C-1 of the Social Security Act (42 U.S.C. 1395w-29), as
    added by section 241(a) of the Medicare Prescription Drug, Improvement,
    and Modernization Act of 2003 (Public Law 108-173), is repealed.

    SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

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

    SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITATION PROGRAMS FOR
                  FAMILIES WITH YOUNG CHILDREN AND FAMILIES EXPECTING
                  CHILDREN.

        Part B of title IV of the Social Security Act (42 U.S.C. 621-629i)
    is amended by adding at the end the following:

           ``Subpart 3--Support for Quality Home Visitation Programs

    ``SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES WITH YOUNG CHILDREN
                  AND FAMILIES EXPECTING CHILDREN.

        ``(a) Purpose.--The purpose of this section is to improve the well-
    being, health, and development of children by enabling the
    establishment and expansion of high quality programs providing
    voluntary home visitation for families with young children and families
    expecting children.
        ``(b) Grant Application.--A State that desires to receive a grant
    under this section shall submit to the Secretary for approval, at such
    time and in such manner as the Secretary may require, an application
    for the grant that includes the following:
                ``(1) Description of home visitation programs.--A
            description of the high quality programs of home visitation for
            families with young children and families expecting children
            that will be supported by a grant made to the State under this
            section, the outcomes the programs are intended to achieve, and
            the evidence supporting the effectiveness of the programs.
                ``(2) Results of needs assessment.--The results of a
            statewide needs assessment that describes--
                        ``(A) the number, quality, and capacity of home
                    visitation programs for families with young children
                    and families expecting children in the State;
                        ``(B) the number and types of families who are
                    receiving services under the programs;
                        ``(C) the sources and amount of funding provided to
                    the programs;
                        ``(D) the gaps in home visitation in the State,
                    including identification of communities that are in
                    high need of the services; and
                        ``(E) training and technical assistance activities
                    designed to achieve or support the goals of the
                    programs.
                ``(3) Assurances.--Assurances from the State that--
                        ``(A) in supporting home visitation programs using
                    funds provided under this section, the State shall
                    identify and prioritize serving communities that are in
                    high need of such services, especially communities with
                    a high proportion of low-income families or a high
                    incidence of child maltreatment;
                        ``(B) the State will reserve 5 percent of the grant
                    funds for training and technical assistance to the home
                    visitation programs using such funds;
                        ``(C) in supporting home visitation programs using
                    funds provided under this section, the State will
                    promote coordination and collaboration with other home
                    visitation programs (including programs funded under
                    title XIX) and with other child and family services,
                    health services, income supports, and other related
                    assistance;
                        ``(D) home visitation programs supported using such
                    funds will, when appropriate, provide referrals to
                    other programs serving children and families; and
                        ``(E) the State will comply with subsection (i),
                    and cooperate with any evaluation conducted under
                    subsection (j).
                ``(4) Other information.--Such other information as the
            Secretary may require.
        ``(c) Allotments.--
                ``(1) Indian tribes.--From the amount reserved under
            subsection (l)(2) for a fiscal year, the Secretary shall allot
            to each Indian tribe that meets the requirement of subsection
            (d), if applicable, for the fiscal year the amount that bears
            the same ratio to the amount so reserved as the number of
            children in the Indian tribe whose families have income that
            does not exceed 200 percent of the poverty line bears to the
            total number of children in such Indian tribes whose families
            have income that does not exceed 200 percent of the poverty
            line.
                ``(2) States and territories.--From the amount appropriated
            under subsection (m) for a fiscal year that remains after
            making the reservations required by subsection (l), the
            Secretary shall allot to each State that is not an Indian tribe
            and that meets the requirement of subsection (d), if
            applicable, for the fiscal year the amount that bears the same
            ratio to the remainder of the amount so appropriated as the
            number of children in the State whose families have income that
            does not exceed 200 percent of the poverty line bears to the
            total number of children in such States whose families have
            income that does not exceed 200 percent of the poverty line.
                ``(3) Reallotments.--The amount of any allotment to a State
            under a paragraph of this subsection for any fiscal year that
            the State certifies to the Secretary will not be expended by
            the State pursuant to this section shall be available for
            reallotment using the allotment methodology specified in that
            paragraph. Any amount so reallotted to a State is deemed part
            of the allotment of the State under this subsection.
        ``(d) Maintenance of Effort.--Beginning with fiscal year 2011, a
    State meets the requirement of this subsection for a fiscal year if the
    Secretary finds that the aggregate expenditures by the State from State
    and local sources for programs of home visitation for families with
    young children and families expecting children for the then preceding
    fiscal year was not less than 100 percent of such aggregate
    expenditures for the then 2nd preceding fiscal year.
        ``(e) Payment of Grant.--
                ``(1) In general.--The Secretary shall make a grant to each
            State that meets the requirements of subsections (b) and (d),
            if applicable, for a fiscal year for which funds are
            appropriated under subsection (m), in an amount equal to the
            reimbursable percentage of the eligible expenditures of the
            State for the fiscal year, but not more than the amount
            allotted to the State under subsection (c) for the fiscal year.
                ``(2) Reimbursable percentage defined.--In paragraph (1),
            the term `reimbursable percentage' means, with respect to a
            fiscal year--
                        ``(A) 85 percent, in the case of fiscal year 2010;
                        ``(B) 80 percent, in the case of fiscal year 2011;
                    or
                        ``(C) 75 percent, in the case of fiscal year 2012
                    and any succeeding fiscal year.
        ``(f) Eligible Expenditures.--
                ``(1) In general.--In this section, the term `eligible
            expenditures'--
                        ``(A) means expenditures to provide voluntary home
                    visitation for as many families with young children
                    (under the age of school entry) and families expecting
                    children as practicable, through the implementation or
                    expansion of high quality home visitation programs
                    that--
                                ``(i) adhere to clear evidence-based models
                            of home visitation that have demonstrated
                            positive effects on important program-
                            determined child and parenting outcomes, such
                            as reducing abuse and neglect and improving
                            child health and development;
                                ``(ii) employ well-trained and competent
                            staff, maintain high quality supervision,
                            provide for ongoing training and professional
                            development, and show strong organizational
                            capacity to implement such a program;
                                ``(iii) establish appropriate linkages and
                            referrals to other community resources and
                            supports;
                                ``(iv) monitor fidelity of program
                            implementation to ensure that services are
                            delivered according to the specified model; and
                                ``(v) provide parents with--
                                        ``(I) knowledge of age-appropriate
                                    child development in cognitive,
                                    language, social, emotional, and motor
                                    domains (including knowledge of second
                                    language acquisition, in the case of
                                    English language learners);
                                        ``(II) knowledge of realistic
                                    expectations of age-appropriate child
                                    behaviors;
                                        ``(III) knowledge of health and
                                    wellness issues for children and
                                    parents;
                                        ``(IV) modeling, consulting, and
                                    coaching on parenting practices;
                                        ``(V) skills to interact with their
                                    child to enhance age-appropriate
                                    development;
                                        ``(VI) skills to recognize and seek
                                    help for issues related to health,
                                    developmental delays, and social,
                                    emotional, and behavioral skills; and
                                        ``(VII) activities designed to help
                                    parents become full partners in the
                                    education of their children;
                        ``(B) includes expenditures for training, technical
                    assistance, and evaluations related to the programs;
                    and
                        ``(C) does not include any expenditure with respect
                    to which a State has submitted a claim for payment
                    under any other provision of Federal law.
                ``(2) Priority funding for programs with strongest
            evidence.--
                        ``(A) In general.--The expenditures, described in
                    paragraph (1), of a State for a fiscal year that are
                    attributable to the cost of programs that do not adhere
                    to a model of home visitation with the strongest
                    evidence of effectiveness shall not be considered
                    eligible expenditures for the fiscal year to the extent
                    that the total of the expenditures exceeds the
                    applicable percentage for the fiscal year of the
                    allotment of the State under subsection (c) for the
                    fiscal year.
                        ``(B) Applicable percentage defined.--In
                    subparagraph (A), the term `applicable percentage'
                    means, with respect to a fiscal year--
                                ``(i) 60 percent for fiscal year 2010;
                                ``(ii) 55 percent for fiscal year 2011;
                                ``(iii) 50 percent for fiscal year 2012;
                                ``(iv) 45 percent for fiscal year 2013; or
                                ``(v) 40 percent for fiscal year 2014.
        ``(g) No Use of Other Federal Funds for State Match.--A State to
    which a grant is made under this section may not expend any Federal
    funds to meet the State share of the cost of an eligible expenditure
    for which the State receives a payment under this section.
        ``(h) Waiver Authority.--
                ``(1) In general.--The Secretary may waive or modify the
            application of any provision of this section, other than
            subsection (b) or (f), to an Indian tribe if the failure to do
            so would impose an undue burden on the Indian tribe.
                ``(2) Special rule.--An Indian tribe is deemed to meet the
            requirement of subsection (d) for purposes of subsections (c)
            and (e) if--
                        ``(A) the Secretary waives the requirement; or
                        ``(B) the Secretary modifies the requirement, and
                    the Indian tribe meets the modified requirement.
        ``(i) State Reports.--Each State to which a grant is made under
    this section shall submit to the Secretary an annual report on the
    progress made by the State in addressing the purposes of this section.
    Each such report shall include a description of--
                ``(1) the services delivered by the programs that received
            funds from the grant;
                ``(2) the characteristics of each such program, including
            information on the service model used by the program and the
            performance of the program;
                ``(3) the characteristics of the providers of services
            through the program, including staff qualifications, work
            experience, and demographic characteristics;
                ``(4) the characteristics of the recipients of services
            provided through the program, including the number of the
            recipients, the demographic characteristics of the recipients,
            and family retention;
                ``(5) the annual cost of implementing the program,
            including the cost per family served under the program;
                ``(6) the outcomes experienced by recipients of services
            through the program;
                ``(7) the training and technical assistance provided to aid
            implementation of the program, and how the training and
            technical assistance contributed to the outcomes achieved
            through the program;
                ``(8) the indicators and methods used to monitor whether
            the program is being implemented as designed; and
                ``(9) other information as determined necessary by the
            Secretary.
        ``(j) Evaluation.--
                ``(1) In general.--The Secretary shall, by grant or
            contract, provide for the conduct of an independent evaluation
            of the effectiveness of home visitation programs receiving
            funds provided under this section, which shall examine the
            following:
                        ``(A) The effect of home visitation programs on
                    child and parent outcomes, including child
                    maltreatment, child health and development, school
                    readiness, and links to community services.
                        ``(B) The effectiveness of home visitation programs
                    on different populations, including the extent to which
                    the ability of programs to improve outcomes varies
                    across programs and populations.
                ``(2) Reports to the congress.--
                        ``(A) Interim report.--Within 3 years after the
                    date of the enactment of this section, the Secretary
                    shall submit to the Congress an interim report on the
                    evaluation conducted pursuant to paragraph (1).
                        ``(B) Final report.--Within 5 years after the date
                    of the enactment of this section, the Secretary shall
                    submit to the Congress a final report on the evaluation
                    conducted pursuant to paragraph (1).
        ``(k) Annual Reports to the Congress.--The Secretary shall submit
    annually to the Congress a report on the activities carried out using
    funds made available under this section, which shall include a
    description of the following:
                ``(1) The high need communities targeted by States for
            programs carried out under this section.
                ``(2) The service delivery models used in the programs
            receiving funds provided under this section.
                ``(3) The characteristics of the programs, including--
                        ``(A) the qualifications and demographic
                    characteristics of program staff; and
                        ``(B) recipient characteristics including the
                    number of families served, the demographic
                    characteristics of the families served, and family
                    retention and duration of services.
                ``(4) The outcomes reported by the programs.
                ``(5) The research-based instruction, materials, and
            activities being used in the activities funded under the grant.
                ``(6) The training and technical activities, including on-
            going professional development, provided to the programs.
                ``(7) The annual costs of implementing the programs,
            including the cost per family served under the programs.
                ``(8) The indicators and methods used by States to monitor
            whether the programs are being been implemented as designed.
        ``(l) Reservations of Funds.--From the amounts appropriated for a
    fiscal year under subsection (m), the Secretary shall reserve--
                ``(1) an amount equal to 5 percent of the amounts to pay
            the cost of the evaluation provided for in subsection (j), and
            the provision to States of training and technical assistance,
            including the dissemination of best practices in early
            childhood home visitation; and
                ``(2) after making the reservation required by paragraph
            (1), an amount equal to 3 percent of the amount so
            appropriated, to pay for grants to Indian tribes under this
            section.
        ``(m) Appropriations.--Out of any money in the Treasury of the
    United States not otherwise appropriated, there is appropriated to the
    Secretary to carry out this section--
                ``(1) $50,000,000 for fiscal year 2010;
                ``(2) $100,000,000 for fiscal year 2011;
                ``(3) $150,000,000 for fiscal year 2012;
                ``(4) $200,000,000 for fiscal year 2013; and
                ``(5) $250,000,000 for fiscal year 2014.
        ``(n) Indian Tribes Treated as States.--In this section, paragraphs
    (4), (5), and (6) of section 431(a) shall apply.''.

    SEC. 1905. IMPROVED COORDINATION AND PROTECTION FOR DUAL ELIGIBLES.

        Title XI of the Social Security Act is amended by inserting after
    section 1150 the following new section:

           ``improved coordination and protection for dual eligibles

        ``Sec. 1150A.  (a) In General.--The Secretary shall provide,
    through an identifiable office or program within the Centers for
    Medicare & Medicaid Services, for a focused effort to provide for
    improved coordination between Medicare and Medicaid and protection in
    the case of dual eligibles (as defined in subsection (e)). The office
    or program shall--
                ``(1) review Medicare and Medicaid policies related to
            enrollment, benefits, service delivery, payment, and grievance
            and appeals processes under parts A and B of title XVIII, under
            the Medicare Advantage program under part C of such title, and
            under title XIX;
                ``(2) identify areas of such policies where better
            coordination and protection could improve care and costs; and
                ``(3) issue guidance to States regarding improving such
            coordination and protection.
        ``(b) Elements.--The improved coordination and protection under
    this section shall include efforts--
                ``(1) to simplify access of dual eligibles to benefits and
            services under Medicare and Medicaid;
                ``(2) to improve care continuity for dual eligibles and
            ensure safe and effective care transitions;
                ``(3) to harmonize regulatory conflicts between Medicare
            and Medicaid rules with regard to dual eligibles; and
                ``(4) to improve total cost and quality performance under
            Medicare and Medicaid for dual eligibles.
        ``(c) Responsibilities.--In carrying out this section, the
    Secretary shall provide for the following:
                ``(1) An examination of Medicare and Medicaid payment
            systems to develop strategies to foster more integrated and
            higher quality care.
                ``(2) Development of methods to facilitate access to post-
            acute and community-based services and to identify actions that
            could lead to better coordination of community-based care.
                ``(3) A study of enrollment of dual eligibles in the
            Medicare Savings Program (as defined in section 1144(c)(7)),
            under Medicaid, and in the low-income subsidy program under
            section 1860D-14 to identify methods to more efficiently and
            effectively reach and enroll dual eligibles.
                ``(4) An assessment of communication strategies for dual
            eligibles to determine whether additional informational
            materials or outreach is needed, including an assessment of the
            Medicare website, 1-800-MEDICARE, and the Medicare handbook.
                ``(5) Research and evaluation of areas where service
            utilization, quality, and access to cost sharing protection
            could be improved and an assessment of factors related to
            enrollee satisfaction with services and care delivery.
                ``(6) Collection (and making available to the public) of
            data and a database that describe the eligibility, benefit and
            cost-sharing assistance available to dual eligibles by State.
                ``(7) Monitoring total combined Medicare and Medicaid
            program costs in serving dual eligibles and making
            recommendations for optimizing total quality and cost
            performance across both programs.
                ``(8) Coordination of activities relating to Medicare
            Advantage plans under 1859(b)(6)(B)(ii) and Medicaid.
        ``(d) Periodic Reports.--Not later than 1 year after the date of
    the enactment of this section and every 3 years thereafter the
    Secretary shall submit to Congress a report on progress in activities
    conducted under this section.
        ``(e) Definitions.--In this section:
                ``(1) Dual eligible.--The term `dual eligible' means an
            individual who is dually eligible for benefits under title
            XVIII, and medical assistance under title XIX, including such
            individuals who are eligible for benefits under the Medicare
            Savings Program (as defined in section 1144(c)(7)).
                ``(2) Medicare; medicaid.--The terms `Medicare' and
            `Medicaid' mean the programs under titles XVIII and XIX,
            respectively.''.

             SUBDIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

    SEC. 2001. TABLE OF CONTENTS; REFERENCES.

        (a) Table of Contents.--The table of contents of this subdivision
    is as follows:

    Sec. 2001. Table of contents; references.
    Sec. 2002. Public Health Investment Fund.
                       TITLE I--COMMUNITY HEALTH CENTERS

    Sec. 2101. Increased funding.
                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     Part 1--National Health Service Corps

    Sec. 2201. National Health Service Corps.
    Sec. 2202. Authorizations of appropriations.
                Part 2--Promotion of Primary Care and Dentistry

    Sec. 2211. Frontline health providers.
    Sec. 2212. Primary care student loan funds.
    Sec. 2213. Training in family medicine, general internal medicine,
                                general pediatrics, geriatrics, and
                                physician assistantship.
    Sec. 2214. Training of medical residents in community-based settings.
    Sec. 2215. Training for general, pediatric, and public health dentists
                                and dental hygienists.
    Sec. 2216. Authorization of appropriations.
                         Subtitle B--Nursing Workforce

    Sec. 2221. Amendments to Public Health Service Act.
                      Subtitle C--Public Health Workforce

    Sec. 2231. Public Health Workforce Corps.
    Sec. 2232. Enhancing the public health workforce.
    Sec. 2233. Public health training centers.
    Sec. 2234. Preventive medicine and public health training grant
                                program.
    Sec. 2235. Authorization of appropriations.
         Subtitle D--Adapting Workforce to Evolving Health System Needs

               Part 1--Health Professions Training for Diversity

    Sec. 2241. Scholarships for disadvantaged students, loan repayments and
                                fellowships regarding faculty positions,
                                and educational assistance in the health
                                professions regarding individuals from
                                disadvantaged backgrounds.
    Sec. 2242. Nursing workforce diversity grants.
    Sec. 2243. Coordination of diversity and cultural competency programs.
                  Part 2--Interdisciplinary Training Programs

    Sec. 2251. Cultural and linguistic competency training for health care
                                professionals.
    Sec. 2252. Innovations in interdisciplinary care training.
         Part 3--Advisory Committee on Health Workforce Evaluation and
                                   Assessment

    Sec. 2261. Health workforce evaluation and assessment.
                      Part 4--Health Workforce Assessment

    Sec. 2271. Health workforce assessment.
                    Part 5--Authorization of Appropriations

    Sec. 2281. Authorization of appropriations.
                       TITLE III--PREVENTION AND WELLNESS

    Sec. 2301. Prevention and wellness.
                       TITLE IV--QUALITY AND SURVEILLANCE

    Sec. 2401. Implementation of best practices in the delivery of health
                                care.
    Sec. 2402. Assistant Secretary for Health Information.
    Sec. 2403. Authorization of appropriations.
                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    Sec. 2501. Expanded participation in 340B program.
    Sec. 2502. Extension of discounts to inpatient drugs.
    Sec. 2503. Effective date.
                    Subtitle B--School-Based Health Clinics

    Sec. 2511. School-based health clinics.
                  Subtitle C--National Medical Device Registry

    Sec. 2521. National medical device registry.
     Subtitle D--Grants for Comprehensive Programs to Provide Education to
                    Nurses and Create a Pipeline to Nursing

    Sec. 2531. Establishment of grant program.
     Subtitle E--States Failing To Adhere to Certain Employment Obligations

    Sec. 2541. Limitation on Federal funds.
       Subtitle F--Standards for Accessibility to Medical Equipment for
                         Individuals With Disabilities.

    Sec. 2541. Access for individuals with disabilities.
                        Subtitle G--Other Grant Programs

    Sec. 2551. Reducing student-to-school nurse ratios.
    Sec. 2552. Wellness program grants.
    Sec. 2553. Health professions training for diversity programs.
            Subtitle H--Long-term Care and Family Caregiver Support

    Sec. 2561. Long-term care and family caregiver support.
                          Subtitle I--Online Resources

    Sec. 2571. Web site on health care labor market and related educational
                                and training opportunities.
    Sec. 2572. Online health workforce training programs.
        (b) References.--Except as otherwise specified, whenever in this
    subdivision an amendment is expressed in terms of an amendment to a
    section or other provision, the reference shall be considered to be
    made to a section or other provision of the Public Health Service Act
    (42 U.S.C. 201 et seq.).

    SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

        (a) Establishment of Funds.--
                (1) In general.--There is established a fund to be known as
            the ``Public Health Investment Fund'' (referred to in this
            section as the ``Fund'').
                (2) Funding.--
                        (A) There shall be deposited into the Fund--
                                (i) for fiscal year 2010, $4,600,000,000;
                                (ii) for fiscal year 2011, $5,600,000,000;
                                (iii) for fiscal year 2012, $6,900,000,000;
                                (iv) for fiscal year 2013, $7,800,000,000;
                                (v) for fiscal year 2014, $9,000,000,000;
                                (vi) for fiscal year 2015, $9,400,000,000;
                                (vii) for fiscal year 2016,
                            $10,100,000,000;
                                (viii) for fiscal year 2017,
                            $10,800,000,000;
                                (ix) for fiscal year 2018, $11,800,000,000;
                            and
                                (x) for fiscal year 2019, $12,700,000,000.
                        (B) Amounts deposited into the Fund shall be
                    derived from general revenues of the Treasury.
        (b) Authorization of Appropriations From the Fund.--
                (1) New funding.--
                        (A) In general.--Amounts in the Fund are authorized
                    to be appropriated by the Committees on Appropriations
                    of the House of Representatives and the Senate for
                    carrying out activities under designated public health
                    provisions.
                        (B) Designated provisions.--For purposes of this
                    paragraph, the term ``designated public health
                    provisions'' means the provisions for which amounts are
                    authorized to be appropriated under section 330(s),
                    338(c), 338H-1, 799C, 872, or 3111 of the Public Health
                    Service Act, as added by this subdivision.
                (2) Baseline funding.--
                        (A) In general.--Amounts in the Fund are authorized
                    to be appropriated (as described in paragraph (1)) for
                    a fiscal year only if (excluding any amounts in or
                    appropriated from the Fund)--
                                (i) the amounts specified in subparagraph
                            (B) for the fiscal year involved are equal to
                            or greater than the amounts specified in
                            subparagraph (B) for fiscal year 2008; and
                                (ii) the amounts appropriated, out of the
                            general fund of the Treasury, to the Prevention
                            and Wellness Trust under section 3111 of the
                            Public Health Service Act, as added by this
                            subdivision, for the fiscal year involved are
                            equal to or greater than the funds--
                                        (I) appropriated under the heading
                                    ``Prevention and Wellness Fund'' in
                                    title VIII of division A of the
                                    American Recovery and Reinvestment Act
                                    of 2009 (Public Law 111-5); and
                                        (II) allocated by the second
                                    proviso under such heading for
                                    evidence-based clinical and community-
                                    based prevention and wellness
                                    strategies.
                        (B) Amounts specified.--The amounts specified in
                    this subparagraph, with respect to a fiscal year, are
                    the amounts appropriated for the following:
                                (i) Community health centers (including
                            funds appropriated under the authority of
                            section 330 of the Public Health Service Act
                            (42 U.S.C. 254b)).
                                (ii) The National Health Service Corps
                            Program (including funds appropriated under the
                            authority of section 338 of such Act (42 U.S.C.
                            254k)).
                                (iii) The National Health Service Corps
                            Scholarship and Loan Repayment Programs
                            (including funds appropriated under the
                            authority of section 338H of such Act (42
                            U.S.C. 254q)).
                                (iv) Primary care loan funds (including
                            funds appropriated for schools of medicine or
                            osteopathic medicine under the authority of
                            section 735(f) of such Act (42 U.S.C.
                            292y(f))).
                                (v) Primary care education programs
                            (including funds appropriated under the
                            authority of sections 736, 740, 741, and 747 of
                            such Act (42 U.S.C. 293, 293d, and 293k)).
                                (vi) Sections 761 and 770 of such Act (42
                            U.S.C. 294n and 295e).
                                (vii) Nursing workforce development
                            (including funds appropriated under the
                            authority of title VIII of such Act (42 U.S.C.
                            296 et seq.)).
                                (viii) The National Center for Health
                            Statistics (including funds appropriated under
                            the authority of sections 304, 306, 307, and
                            308 of such Act (42 U.S.C. 242b, 242k, 242l,
                            and 242m)).
                                (ix) The Agency for Healthcare Research and
                            Quality (including funds appropriated under the
                            authority of title IX of such Act (42 U.S.C.
                            299 et seq.)).
                (3) Budgetary implications.--Amounts appropriated under
            this section, and outlays flowing from such appropriations,
            shall not be taken into account for purposes of any budget
            enforcement procedures including allocations under section
            302(a) and (b) of the Balanced Budget and Emergency Deficit
            Control Act and budget resolutions for fiscal years during
            which appropriations are made from the Fund.

                       TITLE I--COMMUNITY HEALTH CENTERS

    SEC. 2101. INCREASED FUNDING.

        Section 330 of the Public Health Service Act (42 U.S.C. 254b) is
    amended--
                (1) in subsection (r)(1)--
                        (A) in subparagraph (D), by striking ``and'' at the
                    end;
                        (B) in subparagraph (E), by striking the period at
                    the end and inserting ``; and''; and
                        (C) by inserting at the end the following:
                        ``(F) Such sums as may be necessary for each of
                    fiscal years 2013 and 2019.''; and
                (2) by inserting after subsection (r) the following:
        ``(s) Additional Funding.--For the purpose of carrying out this
    section, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
                ``(1) For fiscal year 2010, $1,000,000,000.
                ``(2) For fiscal year 2011, $1,500,000,000.
                ``(3) For fiscal year 2012, $2,500,000,000.
                ``(4) For fiscal year 2013, $3,000,000,000.
                ``(5) For fiscal year 2014, $4,000,000,000.
                ``(6) For fiscal year 2015, $4,400,000,000.
                ``(7) For fiscal year 2016, $4,800,000,000.
                ``(8) For fiscal year 2017, $5,300,000,000.
                ``(9) For fiscal year 2018, $5,900,000,000.
                ``(10) For fiscal year 2019, $6,400,000,000.''.

                              TITLE II--WORKFORCE

                       Subtitle A--Primary Care Workforce

                     PART 1--NATIONAL HEALTH SERVICE CORPS

    SEC. 2201. NATIONAL HEALTH SERVICE CORPS.

        (a) Fulfillment of Obligated Service Requirement Through Half-Time
    Service.--
                (1) Waivers.--Subsection (i) of section 331 (42 U.S.C.
            254d) is amended--
                        (A) in paragraph (1), by striking ``In carrying out
                    subpart III'' and all that follows through the period
                    and inserting ``In carrying out subpart III, the
                    Secretary may, in accordance with this subsection,
                    issue waivers to individuals who have entered into a
                    contract for obligated service under the Scholarship
                    Program or the Loan Repayment Program under which the
                    individuals are authorized to satisfy the requirement
                    of obligated service through providing clinical
                    practice that is half-time.'';
                        (B) in paragraph (2)--
                                (i) in subparagraphs (A)(ii) and (B), by
                            striking ``less than full time'' each place it
                            appears and inserting ``half time'';
                                (ii) in subparagraphs (C) and (F), by
                            striking ``less than full-time service'' each
                            place it appears and inserting ``half-time
                            service''; and
                                (iii) by amending subparagraphs (D) and (E)
                            to read as follows:
                ``(D) the entity and the Corps member agree in writing that
            the Corps member will perform half-time clinical practice;
                ``(E) the Corps member agrees in writing to fulfill all of
            the service obligations under section 338C through half-time
            clinical practice and either--
                        ``(i) double the period of obligated service; or
                        ``(ii) in the case of contracts entered into under
                    section 338B, accept a minimum service obligation of 2
                    years with an award amount equal to 50 percent of the
                    amount that would otherwise be payable for full-time
                    service; and''; and
                        (C) in paragraph (3), by striking ``In evaluating a
                    demonstration project described in paragraph (1)'' and
                    inserting ``In evaluating waivers issued under
                    paragraph (1)''.
                (2) Definitions.--Subsection (j) of section 331 (42 U.S.C.
            254d) is amended by adding at the end the following:
                ``(5) The terms `full time' and `full-time' mean a minimum
            of 40 hours per week in a clinical practice, for a minimum of
            45 weeks per year.
                ``(6) The terms `half time' and `half-time' mean a minimum
            of 20 hours per week (not to exceed 39 hours per week) in a
            clinical practice, for a minimum of 45 weeks per year.''.
        (b) Reappointment to National Advisory Council.--Section 337(b)(1)
    (42 U.S.C. 254j(b)(1)) is amended by striking ``Members may not be
    reappointed to the Council.''.
        (c) Loan Repayment Amount.--Section 338B(g)(2)(A) is amended (42
    U.S.C. 254l-1(g)(2)(A)) by striking ``$35,000'' and inserting
    ``$50,000, plus, beginning with fiscal year 2012, an amount determined
    by the Secretary on an annual basis to reflect inflation,''.
        (d) Treatment of Teaching as Obligated Service.--Subsection (a) of
    section 338C (42 U.S.C. 254m) is amended by adding at the end the
    following: ``The Secretary may treat teaching as clinical practice for
    up to 20 percent of such period of obligated service.''.

    SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.

        (a) National Health Service Corps Program.--Section 338 (42 U.S.C.
    254k) is amended--
                (1) in subsection (a), by striking ``2012'' and inserting
            ``2019''; and
                (2) by adding at the end the following:
        ``(c) For the purpose of carrying out this subpart, in addition to
    any other amounts authorized to be appropriated for such purpose, there
    are authorized to be appropriated, out of any monies in the Public
    Health Investment Fund, the following:
                ``(1) $63,000,000 for fiscal year 2010.
                ``(2) $66,000,000 for fiscal year 2011.
                ``(3) $70,000,000 for fiscal year 2012.
                ``(4) $73,000,000 for fiscal year 2013.
                ``(5) $77,000,000 for fiscal year 2014.
                ``(6) $81,000,000 for fiscal year 2015.
                ``(7) $85,000,000 for fiscal year 2016.
                ``(8) $89,000,000 for fiscal year 2017.
                ``(9) $94,000,000 for fiscal year 2018.
                ``(10) $98,000,000 for fiscal year 2019.''.
        (b) Scholarship and Loan Repayment Programs.--Subpart III of part D
    of title III of the Public Health Service Act (42 U.S.C. 254l et seq.)
    is amended--
                (1) in section 338H(a)--
                        (A) in paragraph (4), by striking ``and'' at the
                    end;
                        (B) in paragraph (5), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(6) for fiscal years 2013 and 2019, such sums as may be
            necessary.''; and
                (2) by inserting after section 338H the following:

    ``SEC. 338H-1. ADDITIONAL FUNDING.

        ``For the purpose of carrying out this subpart, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
                ``(1) $254,000,000 for fiscal year 2010.
                ``(2) $266,000,000 for fiscal year 2011.
                ``(3) $278,000,000 for fiscal year 2012.
                ``(4) $292,000,000 for fiscal year 2013.
                ``(5) $306,000,000 for fiscal year 2014.
                ``(6) $321,000,000 for fiscal year 2015.
                ``(7) $337,000,000 for fiscal year 2016.
                ``(8) $354,000,000 for fiscal year 2017.
                ``(9) $372,000,000 for fiscal year 2018.
                ``(10) $391,000,000 for fiscal year 2019.''.

                PART 2--PROMOTION OF PRIMARY CARE AND DENTISTRY

    SEC. 2211. FRONTLINE HEALTH PROVIDERS.

        Part D of title III (42 U.S.C. 254b et seq.) is amended by adding
    at the end the following:

                 ``Subpart XI--Health Professional Needs Areas

    ``SEC. 340H. IN GENERAL.

        ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration, shall establish a
    program, to be known as the Frontline Health Providers Loan Repayment
    Program, to address unmet health care needs in health professional
    needs areas through loan repayments under section 340I.
        ``(b) Designation of Health Professional Needs Areas.--
                ``(1) In general.--In this subpart, the term `health
            professional needs area' means an area, population, or facility
            that is designated by the Secretary in accordance with
            paragraph (2).
                ``(2) Designation.--To be designated by the Secretary as a
            health professional needs area under this subpart:
                        ``(A) In the case of an area, the area must be a
                    rational area for the delivery of health services.
                        ``(B) The area, population, or facility must have,
                    in one or more health disciplines, specialties, or
                    subspecialties for the population served, as determined
                    by the Secretary--
                                ``(i) insufficient capacity of health
                            professionals; or
                                ``(ii) high needs for health services.
                        ``(C) With respect to the delivery of primary
                    health services, the area, population, or facility must
                    not include a health professional shortage area (as
                    designated under section 332), except that the area,
                    population, or facility may include such a health
                    professional shortage area to which no member of the
                    National Health Service Corps is currently assigned.
        ``(c) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1) hold a degree in a course of study or program
            (approved by the Secretary) from a school defined in section
            799B(1)(A) (other than a school of public health);
                ``(2) hold a degree in a course of study or program
            (approved by the Secretary) from a school or program defined in
            subparagraph (C), (D), or (E)(4) of section 799B(1), as
            designated by the Secretary;
                ``(3) be enrolled as a full-time student--
                        ``(A) in a school or program defined in
                    subparagraph (C), (D), or (E)(4) of section 799B(1), as
                    designated by the Secretary, or a school described in
                    paragraph (1); and
                        ``(B) in the final year of a course of study or
                    program, offered by such school or program and approved
                    by the Secretary, leading to a degree in a discipline
                    referred to in subparagraph (A) (other than a graduate
                    degree in public health), (C), (D), or (E)(4) of
                    section 799B(1);
                ``(4) be a practitioner described in section 1842(b)(18)(C)
            or 1848(k)(3)(B)(iii) or (iv) of the Social Security Act; or
                ``(5) be a practitioner in the field of respiratory
            therapy, medical technology, or radiologic technology.
        ``(d) Definition.--In this subpart, the term `primary health
    services' has the meaning given to such term in section 331(a)(3)(D).

    ``SEC. 340I. LOAN REPAYMENTS.

        ``(a) Loan Repayments.--The Secretary, acting through the
    Administrator of the Health Resources and Services Administration,
    shall enter into contracts with individuals under which--
                ``(1) the individual agrees--
                        ``(A) to serve as a full-time primary health
                    services provider or as a full-time or part-time
                    provider of other health services for a period of time
                    equal to 2 years or such longer period as the
                    individual may agree to;
                        ``(B) to serve in a health professional needs area
                    in a health discipline, specialty, or a subspecialty
                    for which the area, population, or facility is
                    designated as a health professional needs area under
                    section 340H; and
                        ``(C) in the case of an individual described in
                    subsection 340H(c)(3) who is in the final year of study
                    and who has accepted employment as primary health
                    services provider or provider of other health services
                    in accordance with subparagraphs (A) and (B), to
                    complete the education or training and maintain an
                    acceptable level of academic standing (as determined by
                    the educational institution offering the course of
                    study or training); and
                ``(2) the Secretary agrees to pay, for each year of such
            service, an amount on the principal and interest of the
            undergraduate or graduate educational loans (or both) of the
            individual that is not more than 50 percent of the average
            award made under the National Health Service Corps Loan
            Repayment Program under subpart III in that year.
        ``(b) Practice Setting.--A contract entered into under this section
    shall allow the individual receiving the loan repayment to satisfy the
    service requirement described in subsection (a)(1) through employment
    in a solo or group practice, a clinic, an accredited public or private
    nonprofit hospital, or any other health care entity, as deemed
    appropriate by the Secretary.
        ``(c) Application of Certain Provisions.--The provisions of subpart
    III of part D shall, except as inconsistent with this section, apply to
    the loan repayment program under this subpart in the same manner and to
    the same extent as such provisions apply to the National Health Service
    Corps Loan Repayment Program established under section 338B.
        ``(d) Insufficient Number of Applicants.--If there are an
    insufficient number of applicants for loan repayments under this
    section to obligate all appropriated funds, the Secretary shall
    transfer the unobligated funds to the National Health Service Corps for
    the purpose of--
                ``(1) recruitment of sufficient applicants for the National
            Health Service Corps for the following year; or
                ``(2) making additional loan repayments under section 338B
            if there is an excess number of qualified applicants for loan
            repayments under such section.

    ``SEC. 340J. REPORT.

        ``The Secretary shall submit to the Congress an annual report on
    the program carried out under this subpart.

    ``SEC. 340K. ALLOCATION.

        ``Of the amount of funds obligated under this subpart each fiscal
    year for loan repayments--
                ``(1) 90 percent shall be for physicians and other health
            professionals providing primary health services; and
                ``(2) 10 percent shall be for health professionals not
            described in paragraph (1).''.

    SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.

        (a) Loan Provisions.--Section 722 (42 U.S.C. 292r) is amended by
    striking subsection (e) and inserting the following:
        ``(e) Rate of Interest.--Such loans shall bear interest, on the
    unpaid balance of the loan, computed only for periods for which the
    loan is repayable, at the rate of 2 percentage points less than the
    applicable rate of interest described in section 427A(l)(1) of the
    Higher Education Act of 1965 per year.''.
        (b) Medical Schools and Primary Health Care.--Subsection (a) of
    section 723 (42 U.S.C. 292s) is amended--
                (1) in paragraph (1), by striking subparagraph (B) and
            inserting the following:
                        ``(B) to practice in such care for 10 years
                    (including residency training in primary health care)
                    or through the date on which the loan is repaid in
                    full, whichever occurs first.''; and
                (2) by striking paragraph (3) and inserting the following:
                ``(3) Noncompliance by student.--If an individual fails to
            comply with an agreement entered into pursuant to paragraph
            (1), such agreement shall provide that the total interest to be
            paid on the loan, over the course of the loan period, shall
            equal the total amount of interest that would have been
            incurred by the individual if, from the outset of the loan, the
            loan was repayable at the rate of interest described in section
            427A(l)(1) of the Higher Education Act of 1965 per year instead
            of the rate of interest described in section 722(e).''.
        (c) Student Loan Guidelines.--
                (1) In general.--Section 735 (42 U.S.C. 292y) is amended--
                        (A) by redesignating subsection (f) as subsection
                    (g); and
                        (B) by inserting after subsection (e) the
                    following:
        ``(f) Determination of Financial Need.--The Secretary--
                ``(1) may require, or authorize a school or other entity to
            require, the submission of financial information to determine
            the financial resources available to any individual seeking
            assistance under this subpart; and
                ``(2) shall take into account the extent to which such
            individual is financially independent in determining whether to
            require or authorize the submission of such information
            regarding such individual's family members.''.
                (2) Revised guidelines.--The Secretary of Health and Human
            Services shall--
                        (A) strike the second sentence of section 57.206(b)
                    of title 42, Code of Federal Regulations; and
                        (B) make such other revisions to guidelines and
                    regulations in effect as of the date of the enactment
                    of this Act as may be necessary for consistency with
                    the amendments made by paragraph (1).

    SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE,
                  GENERAL PEDIATRICS, GERIATRICS, AND PHYSICIAN
                  ASSISTANTSHIP.

        Section 747 (42 U.S.C. 293k) is amended--
                (1) by amending the section heading to read as follows:
            ``primary care training and enhancement'';
                (2) by redesignating subsection (e) as subsection (f); and
                (3) by striking subsections (a) through (d) and inserting
            the following:
        ``(a) Program.--The Secretary shall establish a primary care
    training and capacity building program consisting of awarding grants
    and contracts under subsections (b) and (c).
        ``(b) Support and Development of Primary Care Training Programs.--
                ``(1) In general.--The Secretary shall make grants to, or
            enter into contracts with, eligible entities--
                        ``(A) to plan, develop, operate, or participate in
                    an accredited professional training program, including
                    an accredited residency or internship program, in the
                    field of family medicine, general internal medicine,
                    general pediatrics, or geriatrics for medical students,
                    interns, residents, or practicing physicians;
                        ``(B) to provide financial assistance in the form
                    of traineeships and fellowships to medical students,
                    interns, residents, or practicing physicians, who are
                    participants in any such program, and who plan to
                    specialize or work in family medicine, general internal
                    medicine, general pediatrics, or geriatrics;
                        ``(C) to plan, develop, operate, or participate in
                    an accredited program for the training of physicians
                    who plan to teach in family medicine, general internal
                    medicine, general pediatrics, or geriatrics training
                    programs including in community-based settings;
                        ``(D) to provide financial assistance in the form
                    of traineeships and fellowships to practicing
                    physicians who are participants in any such programs
                    and who plan to teach in a family medicine, general
                    internal medicine, general pediatrics, or geriatrics
                    training program; and
                        ``(E) to plan, develop, operate, or participate in
                    an accredited program for physician assistant
                    education, and for the training of individuals who plan
                    to teach in programs to provide such training.
                ``(2) Eligibility.--To be eligible for a grant or contract
            under paragraph (1), an entity shall be--
                        ``(A) an accredited school of medicine or
                    osteopathic medicine, public or nonprofit private
                    hospital, or physician assistant training program;
                        ``(B) a public or private nonprofit entity; or
                        ``(C) a consortium of 2 or more entities described
                    in subparagraphs (A) and (B).
        ``(c) Capacity Building in Primary Care.--
                ``(1) In general.--The Secretary shall make grants to or
            enter into contracts with eligible entities to establish,
            maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    the specialties of family medicine, general internal
                    medicine, general pediatrics, or geriatrics; or
                        ``(B) programs that improve clinical teaching in
                    such specialties.
                ``(2) Eligibility.--To be eligible for a grant or contract
            under paragraph (1), an entity shall be an accredited school of
            medicine or osteopathic medicine.
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of health care professionals who
            provide primary care.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) A high rate of placing graduates in practice settings
            having the principal focus of serving in underserved areas or
            populations experiencing health disparities (including serving
            patients eligible for medical assistance under title XIX of the
            Social Security Act or for child health assistance under title
            XXI of such Act or those with special health care needs).
                ``(4) Supporting teaching programs that address the health
            care needs of vulnerable populations.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definition.--In this section, the term `health disparities'
    has the meaning given the term in section 3171.''.

    SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

        Title VII (42 U.S.C. 292 et seq.) is amended--
                (1) by redesignating section 748 as 749A; and
                (2) by inserting after section 747 the following:

    ``SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

        ``(a) Program.--The Secretary shall establish a program for the
    training of medical residents in community-based settings consisting of
    awarding grants or contracts under this section.
        ``(b) Development and Operation of Community-Based Programs.--The
    Secretary shall make grants to, or enter into contracts with, eligible
    entities--
                ``(1) to plan and develop a new primary care residency
            training program, which may include--
                        ``(A) planning and developing curricula;
                        ``(B) recruiting and training residents and
                    faculty; and
                        ``(C) other activities designated to result in
                    accreditation of such a program; or
                ``(2) to operate or participate in an established primary
            care residency training program, which may include--
                        ``(A) planning and developing curricula;
                        ``(B) recruitment and training of residents; and
                        ``(C) retention of faculty.
        ``(c) Eligible Entity.--To be eligible to receive a grant or
    contract under subsection (b), an entity shall--
                ``(1) be designated as a recipient of payment for the
            direct costs of medical education under section 1886(k) of the
            Social Security Act;
                ``(2) be designated as an approved teaching health center
            under section 1502(d) of the America's Affordable Health
            Choices Act of 2009 and continuing to participate in the
            demonstration project under such section; or
                ``(3) be an applicant for designation described in
            paragraph (1) or (2) and have demonstrated to the Secretary
            appropriate involvement of an accredited teaching hospital to
            carry out the inpatient responsibilities associated with a
            primary care residency training program.
        ``(d) Preferences.--In awarding grants and contracts under
    paragraph (1) or (2) of subsection (b), the Secretary shall give
    preference to entities that--
                ``(1) support teaching programs that address the health
            care needs of vulnerable populations; or
                ``(2) are a Federally qualified health center (as defined
            in section 1861(aa)(4) of the Social Security Act) or a rural
            health clinic (as defined in section 1861(aa)(2) of such Act).
        ``(e) Additional Preferences for Established Programs.--In awarding
    grants and contracts under subsection (b)(2), the Secretary shall give
    preference to entities that have a demonstrated record of training--
                ``(1) a high or significantly improved percentage of health
            care professionals who provide primary care;
                ``(2) individuals who are from underrepresented minority
            groups or disadvantaged backgrounds; or
                ``(3) individuals who practice in settings having the
            principal focus of serving underserved areas or populations
            experiencing health disparities (including serving patients
            eligible for medical assistance under title XIX of the Social
            Security Act or for child health assistance under title XXI of
            such Act or those with special health care needs).
        ``(f) Period of Awards.--
                ``(1) In general.--The period of a grant or contract under
            this section--
                        ``(A) shall not exceed 2 years for awards under
                    subsection (b)(1); and
                        ``(B) shall not exceed 5 years for awards under
                    subsection (b)(2).
                ``(2) Special rules.--
                        ``(A) An award of a grant or contract under
                    subsection (b)(1) shall not be renewed.
                        ``(B) The period of a grant or contract awarded to
                    an entity under subsection (b)(2) shall not overlap
                    with the period of any grant or contact awarded to the
                    same entity under subsection (b)(1).
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(h) Definitions.--In this section:
                ``(1) Primary care residency training program.--The term
            `primary care residency training program' means an approved
            medical residency training program described in section
            1886(h)(5)(A) of the Social Security Act that is--
                        ``(A) in the case of entities seeking awards under
                    subsection (b)(1), actively applying to be accredited
                    by the Accreditation Council for Graduate Medical
                    Education; or
                        ``(B) in the case of entities seeking awards under
                    subsection (b)(2), so accredited.
                ``(2) Health disparities.--The term `health disparities'
            has the meaning given the term in section 3171.''.

    SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS
                  AND DENTAL HYGIENISTS.

        Title VII (42 U.S.C. 292 et seq.) is amended--
                (1) in section 791(a)(1), by striking ``747 and 750'' and
            inserting ``747, 749, and 750''; and
                (2) by inserting after section 748, as added, the
            following:

    ``SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS
                  AND DENTAL HYGIENISTS.

        ``(a) Program.--The Secretary shall establish a dental medicine
    training program consisting of awarding grants and contracts under this
    section.
        ``(b) Support and Development of Dental Training Programs.--The
    Secretary shall make grants to, or enter into contracts with, eligible
    entities--
                ``(1) to plan, develop, operate, or participate in an
            accredited professional training program for oral health
            professionals;
                ``(2) to provide financial assistance to oral health
            professionals who are in need thereof, who are participants in
            any such program, and who plan to work in general, pediatric,
            or public heath dentistry, or dental hygiene;
                ``(3) to plan, develop, operate, or participate in a
            program for the training of oral health professionals who plan
            to teach in general, pediatric, or public health dentistry, or
            dental hygiene;
                ``(4) to provide financial assistance in the form of
            traineeships and fellowships to oral health professionals who
            plan to teach in general, pediatric, or public health dentistry
            or dental hygiene;
                ``(5) to establish, maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    the specialties of general, pediatric, or public health
                    dentistry; or
                        ``(B) programs that improve clinical teaching in
                    such specialties;
                ``(6) to plan, develop, operate, or participate in
            predoctoral and postdoctoral training in general, pediatric, or
            public health dentistry programs, or training for dental
            hygienists;
                ``(7) to plan, develop, operate, or participate in a loan
            repayment program for full-time faculty in a program of
            general, pediatric, or public health dentistry; and
                ``(8) to provide technical assistance to pediatric dental
            training programs in developing and implementing instruction
            regarding the oral health status, dental care needs, and risk-
            based clinical disease management of all pediatric populations
            with an emphasis on underserved children.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited school of dentistry, training program
            in dental hygiene, or public or nonprofit private hospital;
                ``(2) a training program in dental hygiene at an accredited
            institution of higher education;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of--
                        ``(A) 2 or more of the entities described in
                    paragraphs (1) through (3); and
                        ``(B) an accredited school of public health.
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of oral health professionals who
            practice general, pediatric, or public health dentistry.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) A high rate of placing graduates in practice settings
            having the principal focus of serving in underserved areas or
            populations experiencing health disparities (including serving
            patients eligible for medical assistance under title XIX of the
            Social Security Act or for child health assistance under title
            XXI of such Act or those with special health care needs).
                ``(4) Supporting teaching programs that address the dental
            needs of vulnerable populations.
                ``(5) Providing instruction regarding the oral health
            status, dental care needs, and risk-based clinical disease
            management of all pediatric populations with an emphasis on
            underserved children.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definition.--In this section:
                ``(1) The term `health disparities' has the meaning given
            the term in section 3171.
                ``(2) The term `oral health professional' means an
            individual training or practicing--
                        ``(A) in general dentistry, pediatric dentistry,
                    public health dentistry, or dental hygiene; or
                        ``(B) another dental medicine specialty, as deemed
                    appropriate by the Secretary.''.

    SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Part F of title VII (42 U.S.C. 295j et seq.) is
    amended by adding at the end the following:

    ``SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

        ``(a) Promotion of Primary Care and Dentistry.--For the purpose of
    carrying out subpart XI of part D of title III and sections 723, 747,
    748, and 749, in addition to any other amounts authorized to be
    appropriated for such purpose, there is authorized to be appropriated,
    out of any monies in the Public Health Investment Fund, the following:
                ``(1) $240,000,000 for fiscal year 2010.
                ``(2) $253,000,000 for fiscal year 2011.
                ``(3) $265,000,000 for fiscal year 2012.
                ``(4) $278,000,000 for fiscal year 2013.
                ``(5) $292,000,000 for fiscal year 2014.
                ``(6) $307,000,000 for fiscal year 2015.
                ``(7) $322,000,000 for fiscal year 2016.
                ``(8) $338,000,000 for fiscal year 2017.
                ``(9) $355,000,000 for fiscal year 2018.
                ``(10) $373,000,000 for fiscal year 2019.''.
        (b) Existing Authorizations of Appropriations.--
                (1) Section 735.--Paragraph (1) of section 735(g), as so
            redesignated, is amended by inserting ``and such sums as may be
            necessary for subsequent years through fiscal year 2019''
            before the period at the end.
                (2) Section 747.--Subsection (f), as so redesignated, of
            section 747 (42 U.S.C. 293k) is amended by striking ``2002''
            and inserting ``2019''.

                         Subtitle B--Nursing Workforce

    SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

        (a) Definitions.--Section 801 (42 U.S.C. 296 et seq.) is amended--
                (1) in paragraph (1), by inserting ``nurse-managed health
            centers'' after ``nursing centers,''; and
                (2) by adding at the end the following:
                ``(16) Nurse-managed health center.--The term `nurse-
            managed health center' means a nurse-practice arrangement,
            managed by advanced practice nurses, that provides primary care
            or wellness services to underserved or vulnerable populations
            and is associated with an accredited school of nursing,
            Federally qualified health center, or independent nonprofit
            health or social services agency.''.
        (a) Grants for Health Professions Education.--Title VIII (42 U.S.C.
    296 et seq.) is amended by striking section 807.
        (b) Advanced Education Nursing Grants.--Section 811(f) (42 U.S.C.
    296j(f)) is amended--
                (1) by striking paragraph (2);
                (2) by redesignating paragraph (3) as paragraph (2); and
                (3) in paragraph (2), as so redesignated, by striking
            ``that agrees'' and all that follows through the end and
            inserting: ``that agrees to expend the award--
                        ``(A) to train advanced education nurses who will
                    practice in health professional shortage areas
                    designated under section 332; or
                        ``(B) to increase diversity among advanced
                    education nurses.''.
        (c) Nurse Education, Practice, and Retention Grants.--Section 831
    (42 U.S.C. 296p) is amended--
                (1) in subsection (b), by amending paragraph (3) to read as
            follows:
                ``(3) providing coordinated care, quality care, and other
            skills needed to practice nursing;''; and
                (2) by striking subsection (e) and redesignating
            subsections (f) through (h) as subsections (e) through (g),
            respectively.
        (d) Student Loans.--Subsection (a) of section 836 (42 U.S.C. 297b)
    is amended--
                (1) by striking ``$2,500'' and inserting ``$3,300'';
                (2) by striking ``$4,000'' and inserting ``$5,200'';
                (3) by striking ``$13,000'' and inserting ``$17,000''; and
                (4) by adding at the end the following: ``Beginning with
            fiscal year 2012, the dollar amounts specified in this
            subsection shall be adjusted by an amount determined by the
            Secretary on an annual basis to reflect inflation.''.
        (e) Loan Repayment.--Section 846 (42 U.S.C. 297n) is amended--
                (1) in subsection (a), by amending paragraph (3) to read as
            follows:
                ``(3) who enters into an agreement with the Secretary to
            serve for a period of not less than 2 years--
                        ``(A) as a nurse at a health care facility with a
                    critical shortage of nurses; or
                        ``(B) as a faculty member at an accredited school
                    of nursing;''; and
                (2) in subsection (g)(1), by striking ``to provide health
            services'' each place it appears and inserting ``to provide
            health services or serve as a faculty member''.
        (f) Nurse Faculty Loan Program.--Paragraph (2) of section 846A(c)
    (42 U.S.C. 297n-1(c)) is amended by striking ``$30,000'' and all that
    follows through the semicolon and inserting ``$35,000, plus, beginning
    with fiscal year 2012, an amount determined by the Secretary on an
    annual basis to reflect inflation;''.
        (g) Public Service Announcements.--Title VIII (42 U.S.C. 296 et
    seq.) is amended by striking part H.
        (h) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296
    et seq.) is amended--
                (1) by redesignating section 810 (relating to prohibition
            against discrimination by schools on the basis of sex) as
            section 809 and moving such section so that it follows section
            808;
                (2) in sections 835, 836, 838, 840, and 842, by striking
            the term ``this subpart'' each place it appears and inserting
            ``this part'';
                (3) in section 836(h), by striking the last sentence;
                (4) in section 836, by redesignating subsection (l) as
            subsection (k);
                (5) in section 839, by striking ``839'' and all that
            follows through ``(a)'' and inserting ``839. (a)'';
                (6) in section 835(b), by striking ``841'' each place it
            appears and inserting ``871'';
                (7) by redesignating section 841 as section 871, moving
            part F to the end of the title, and redesignating such part as
            part H;
                (8) in part G--
                        (A) by redesignating section 845 as section 851;
                    and
                        (B) by redesignating part G as part F; and
                (9) in part I--
                        (A) by redesignating section 855 as section 861;
                    and
                        (B) by redesignating part I as part G.
        (i) Funding.--
                (1) In general.--Part H, as redesignated, of title VIII is
            amended by adding at the end the following:

    ``SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

        ``For the purpose of carrying out this title, in addition to any
    other amounts authorized to be appropriated for such purpose, there are
    authorized to be appropriated, out of any monies in the Public Health
    Investment Fund, the following:
                ``(1) $115,000,000 for fiscal year 2010.
                ``(2) $122,000,000 for fiscal year 2011.
                ``(3) $127,000,000 for fiscal year 2012.
                ``(4) $134,000,000 for fiscal year 2013.
                ``(5) $140,000,000 for fiscal year 2014.
                ``(6) $147,000,000 for fiscal year 2015.
                ``(7) $154,000,000 for fiscal year 2016.
                ``(8) $162,000,000 for fiscal year 2017.
                ``(9) $170,000,000 for fiscal year 2018.
                ``(10) $179,000,000 for fiscal year 2019.''.
                (2) Existing authorizations of appropriations.--
                        (A) Sections 831, 846, 846a, and 861.--Sections
                    831(g) (as so redesignated), 846(i)(1) (42 U.S.C.
                    297n(i)(1)), 846A(f) (42 U.S.C. 297n-1(f)), and 861(e)
                    (as so redesignated) are amended by striking ``2007''
                    each place it appears and inserting ``2019''.
                        (B) Section 871.--Section 871, as so redesignated,
                    is amended to read as follows:

    ``SEC. 871. FUNDING.

        ``For the purpose of carrying out parts B, C, and D (subject to
    section 845(g)), there are authorized to be appropriated such sums as
    may be necessary for each fiscal year through fiscal year 2019.''.

                      Subtitle C--Public Health Workforce

    SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.

        Part D of title III (42 U.S.C. 254b et seq.), as amended by section
    2211, is amended by adding at the end the following:

                     ``Subpart XII--Public Health Workforce

    ``SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.

        ``(a) Establishment.--There is established, within the Service, the
    Public Health Workforce Corps (in this subpart referred to as the
    `Corps'), for the purpose of ensuring an adequate supply of public
    health professionals throughout the Nation. The Corps shall consist
    of--
                ``(1) such officers of the Regular and Reserve Corps of the
            Service as the Secretary may designate; and
                ``(2) such civilian employees of the United States as the
            Secretary may appoint.
        ``(b) Administration.--Except as provided in subsection (c), the
    Secretary shall carry out this subpart acting through the Administrator
    of the Health Resources and Services Administration.
        ``(c) Placement and Assignment.--The Secretary, acting through the
    Director of the Centers for Disease Control and Prevention, shall
    develop a methodology for placing and assigning Corps participants as
    public health professionals. Such methodology may allow for placing and
    assigning such participants in State, local, and tribal health
    departments and Federally qualified health centers (as defined in
    section 1861(aa)(4) of the Social Security Act).
        ``(d) Application of Certain Provisions.--The provisions of subpart
    II shall, except as inconsistent with this subpart, apply to the Public
    Health Workforce Corps in the same manner and to the same extent as
    such provisions apply to the National Health Service Corps established
    under section 331.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the programs carried out under this subpart.

    ``SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP PROGRAM.

        ``(a) Establishment.--The Secretary shall establish the Public
    Health Workforce Scholarship Program (referred to in this section as
    the `Program') for the purpose described in section 340L(a).
        ``(b) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1)(A) be accepted for enrollment, or be enrolled, as a
            full-time or part-time student in a course of study or program
            (approved by the Secretary) at an accredited graduate school or
            program of public health; or
                ``(B) have demonstrated expertise in public health and be
            accepted for enrollment, or be enrolled, as a full-time or
            part-time student in a course of study or program (approved by
            the Secretary) at--
                        ``(i) an accredited graduate school or program of
                    nursing; health administration, management, or policy;
                    preventive medicine; laboratory science; veterinary
                    medicine; or dental medicine; or
                        ``(ii) another accredited graduate school or
                    program, as deemed appropriate by Secretary;
                ``(2) be eligible for, or hold, an appointment as a
            commissioned officer in the Regular or Reserve Corps of the
            Service or be eligible for selection for civilian service in
            the Corps; and
                ``(3) sign and submit to the Secretary a written contract
            (described in subsection (c)) to serve full-time as a public
            health professional, upon the completion of the course of study
            or program involved, for the period of obligated service
            described in subsection (c)(2)(E).
        ``(c) Contract.--The written contract between the Secretary and an
    individual under subsection (b)(3) shall contain--
                ``(1) an agreement on the part of the Secretary that the
            Secretary will--
                        ``(A) provide the individual with a scholarship for
                    a period of years (not to exceed 4 academic years)
                    during which the individual shall pursue an approved
                    course of study or program to prepare the individual to
                    serve in the public health workforce; and
                        ``(B) accept (subject to the availability of
                    appropriated funds) the individual into the Corps;
                ``(2) an agreement on the part of the individual that the
            individual will--
                        ``(A) accept provision of such scholarship to the
                    individual;
                        ``(B) maintain full-time or part-time enrollment in
                    the approved course of study or program described in
                    subsection (b)(1) until the individual completes that
                    course of study or program;
                        ``(C) while enrolled in the approved course of
                    study or program, maintain an acceptable level of
                    academic standing (as determined by the educational
                    institution offering such course of study or program);
                        ``(D) if applicable, complete a residency or
                    internship; and
                        ``(E) serve full-time as a public health
                    professional for a period of time equal to the greater
                    of--
                                ``(i) 1 year for each academic year for
                            which the individual was provided a scholarship
                            under the Program; or
                                ``(ii) 2 years; and
                ``(3) an agreement by both parties as to the nature and
            extent of the scholarship assistance, which may include--
                        ``(A) payment of reasonable educational expenses of
                    the individual, including tuition, fees, books,
                    equipment, and laboratory expenses; and
                        ``(B) payment of a stipend of not more than $1,269
                    (plus, beginning with fiscal year 2011, an amount
                    determined by the Secretary on an annual basis to
                    reflect inflation) per month for each month of the
                    academic year involved, with the dollar amount of such
                    a stipend determined by the Secretary taking into
                    consideration whether the individual is enrolled full-
                    time or part-time.
        ``(d) Application of Certain Provisions.--The provisions of subpart
    III shall, except as inconsistent with this subpart, apply to the
    scholarship program under this section in the same manner and to the
    same extent as such provisions apply to the National Health Service
    Corps Scholarship Program established under section 338A.

    ``SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

        ``(a) Establishment.--The Secretary shall establish the Public
    Health Workforce Loan Repayment Program (referred to in this section as
    the `Program') for the purpose described in section 340L(a).
        ``(b) Eligibility.--To be eligible to participate in the Program,
    an individual shall--
                ``(1)(A) have a graduate degree from an accredited school
            or program of public health;
                ``(B) have demonstrated expertise in public health and have
            a graduate degree in a course of study or program (approved by
            the Secretary) from--
                        ``(i) an accredited school or program of nursing;
                    health administration, management, or policy;
                    preventive medicine; laboratory science; veterinary
                    medicine; or dental medicine; or
                        ``(ii) another accredited school or program
                    approved by the Secretary; or
                ``(C) be enrolled as a full-time or part-time student in
            the final year of a course of study or program (approved by the
            Secretary) offered by a school or program described in
            subparagraph (A) or (B), leading to a graduate degree;
                ``(2) be eligible for, or hold, an appointment as a
            commissioned officer in the Regular or Reserve Corps of the
            Service or be eligible for selection for civilian service in
            the Corps;
                ``(3) if applicable, complete a residency or internship;
            and
                ``(4) sign and submit to the Secretary a written contract
            (described in subsection (c)) to serve full-time as a public
            health professional for the period of obligated service
            described in subsection (c)(2).
        ``(c) Contract.--The written contract between the Secretary and an
    individual under subsection (b)(4) shall contain--
                ``(1) an agreement by the Secretary to repay on behalf of
            the individual loans incurred by the individual in the pursuit
            of the relevant public health workforce educational degree in
            accordance with the terms of the contract;
                ``(2) an agreement by the individual to serve full-time as
            a public health professional for a period of time equal to 2
            years or such longer period as the individual may agree to; and
                ``(3) in the case of an individual described in subsection
            (b)(1)(C) who is in the final year of study and who has
            accepted employment as a public health professional, in
            accordance with subsection 340L(c), an agreement on the part of
            the individual to complete the education or training, maintain
            an acceptable level of academic standing (as determined by the
            educational institution offering the course of study or
            training), and serve the period of obligated service described
            in paragraph (2).
        ``(d) Payments.--
                ``(1) In general.--A loan repayment provided for an
            individual under a written contract under the Program shall
            consist of payment, in accordance with paragraph (2), on behalf
            of the individual of the principal, interest, and related
            expenses on government and commercial loans received by the
            individual regarding the undergraduate or graduate education of
            the individual (or both), which loans were made for reasonable
            educational expenses, including tuition, fees, books,
            equipment, and laboratory expenses, incurred by the individual.
                ``(2) Payments for years served.--
                        ``(A) In general.--For each year of obligated
                    service that an individual contracts to serve under
                    subsection (c), the Secretary may pay up to $35,000
                    (plus, beginning with fiscal year 2012, an amount
                    determined by the Secretary on an annual basis to
                    reflect inflation) on behalf of the individual for
                    loans described in paragraph (1).
                        ``(B) Repayment schedule.--Any arrangement made by
                    the Secretary for the making of loan repayments in
                    accordance with this subsection shall provide that any
                    repayments for a year of obligated service shall be
                    made no later than the end of the fiscal year in which
                    the individual completes such year of service.
        ``(e) Application of Certain Provisions.--The provisions of subpart
    III shall, except as inconsistent with this subpart, apply to the loan
    repayment program under this section in the same manner and to the same
    extent as such provisions apply to the National Health Service Corps
    Loan Repayment Program established under section 338B.''.

    SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.

        Section 765 (42 U.S.C. 295) is amended to read as follows:

    ``SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.

        ``(a) Program.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration and in consultation
    with the Director of the Centers for Disease Control and Prevention,
    shall establish a public health workforce training and enhancement
    program consisting of awarding grants and contracts under subsection
    (b).
        ``(b) Grants and Contracts.--The Secretary shall award grants and
    contracts to eligible entities--
                ``(1) to plan, develop, operate, or participate in, an
            accredited professional training program in the field of public
            health (including such a program in nursing; health
            administration, management, or policy; preventive medicine;
            laboratory science; veterinary medicine; or dental medicine)
            for members of the public health workforce including mid-career
            professionals;
                ``(2) to provide financial assistance in the form of
            traineeships and fellowships to students who are participants
            in any such program and who plan to specialize or work in the
            field of public health;
                ``(3) to plan, develop, operate, or participate in a
            program for the training of public health professionals who
            plan to teach in any program described in paragraph (1); and
                ``(4) to provide financial assistance in the form of
            traineeships and fellowships to public health professionals who
            are participants in any program described in paragraph (1) and
            who plan to teach in the field of public health, including
            nursing; health administration, management, or policy;
            preventive medicine; laboratory science; veterinary medicine;
            or dental medicine.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited health professions school, including an
            accredited graduate school or program of public health;
            nursing; health administration, management, or policy;
            preventive medicine; laboratory science; veterinary medicine;
            or dental medicine;
                ``(2) a State, local, or tribal health department;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preference.--In awarding grants or contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            improving the percentage, of public health professionals who
            serve in underserved communities.
                ``(2) Training individuals who are from underrepresented
            minority groups or disadvantaged backgrounds.
                ``(3) Training individuals in public health specialties
            experiencing a significant shortage of public health
            professionals (as determined by the Secretary).
                ``(4) Training the greatest percentage, or significantly
            improving the percentage, of public health professionals
            serving in the Federal Government or a State, local, or tribal
            government.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.

        Section 766 (42 U.S.C. 295a) is amended--
                (1) in subsection (b)(1), by striking ``in furtherance of
            the goals established by the Secretary for the year 2000'' and
            inserting ``in furtherance of the goals established by the
            Secretary in the national prevention and wellness strategy
            under section 3121''; and
                (2) by adding at the end the following:
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT
                  PROGRAM.

        Section 768 (42 U.S.C. 295c) is amended to read as follows:

    ``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT
                  PROGRAM.

        ``(a) Grants.--The Secretary, acting through the Administrator of
    the Health Resources and Services Administration and in consultation
    with the Director of the Centers for Disease Control and Prevention,
    shall award grants to, or enter into contracts with, eligible entities
    to provide training to graduate medical residents in preventive
    medicine specialties.
        ``(b) Eligibility.--To be eligible for a grant or contract under
    subsection (a), an entity shall be--
                ``(1) an accredited school of public health or school of
            medicine or osteopathic medicine;
                ``(2) an accredited public or private hospital;
                ``(3) a State, local, or tribal health department; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(c) Use of Funds.--Amounts received under a grant or contract
    under this section shall be used to--
                ``(1) plan, develop (including the development of
            curricula), operate, or participate in an accredited residency
            or internship program in preventive medicine or public health;
                ``(2) defray the costs of practicum experiences, as
            required in such a program; and
                ``(3) establish, maintain, or improve--
                        ``(A) academic administrative units (including
                    departments, divisions, or other appropriate units) in
                    preventive medicine and public health; or
                        ``(B) programs that improve clinical teaching in
                    preventive medicine and public health.
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Section 799C, as added by section 2216 of this
    division, is amended by adding at the end the following:
        ``(b) Public Health Workforce.--For the purpose of carrying out
    subpart XII of part D of title III and sections 765, 766, and 768, in
    addition to any other amounts authorized to be appropriated for such
    purpose, there are authorized to be appropriated, out of any monies in
    the Public Health Investment Fund, the following:
                ``(1) $51,000,000 for fiscal year 2010.
                ``(2) $54,000,000 for fiscal year 2011.
                ``(3) $57,000,000 for fiscal year 2012.
                ``(4) $59,000,000 for fiscal year 2013.
                ``(5) $62,000,000 for fiscal year 2014.
                ``(6) $65,000,000 for fiscal year 2015.
                ``(7) $68,000,000 for fiscal year 2016.
                ``(8) $72,000,000 for fiscal year 2017.
                ``(9) $75,000,000 for fiscal year 2018.
                ``(10) $79,000,000 for fiscal year 2019.''.
        (b) Existing Authorization of Appropriations.--Subpart (a) of
    section 770 (42 U.S.C. 295e) is amended by striking ``2002'' and
    inserting ``2019''.

         Subtitle D--Adapting Workforce to Evolving Health System Needs

               PART 1--HEALTH PROFESSIONS TRAINING FOR DIVERSITY

    SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STUDENTS, LOAN REPAYMENTS AND
                  FELLOWSHIPS REGARDING FACULTY POSITIONS, AND EDUCATIONAL
                  ASSISTANCE IN THE HEALTH PROFESSIONS REGARDING
                  INDIVIDUALS FROM DISADVANTAGED BACKGROUNDS.

        Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) is amended by
    striking ``not more than $20,000'' and all that follows through the end
    of the paragraph and inserting: ``not more than $35,000 (plus,
    beginning with fiscal year 2012, an amount determined by the Secretary
    on an annual basis to reflect inflation) of the principal and interest
    of the educational loans of such individuals.''

    SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.

        Subsection (b) of section 821 (42 U.S.C. 296m) is amended--
                (1) in the heading, by striking ``Guidance'' and inserting
            ``Consultation''; and
                (2) by striking ``shall take into consideration'' and all
            that follows through ``consult with nursing associations'' and
            inserting ``shall, as appropriate, consult with nursing
            associations''.

    SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.

        Title VII (42 U.S.C. 292 et seq.) is amended by inserting after
    section 739 the following:

    ``SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY
                  PROGRAMS.

        ``The Secretary shall, to the extent practicable, coordinate the
    activities carried out under this part and section 821 in order to
    enhance the effectiveness of such activities and avoid duplication of
    effort.''.

                  PART 2--INTERDISCIPLINARY TRAINING PROGRAMS

    SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY TRAINING FOR HEALTH CARE
                  PROFESSIONALS.

        Section 741 (42 U.S.C. 293e) is amended--
                (1) in the section heading, by striking ``Grants for Health
            Professions Education'' and inserting ``Cultural and Linguistic
            Competency Training for Health Care Professionals'';
                (2) by redesignating subsection (b) as subsection (h); and
                (3) by striking subsection (a) and inserting the following:
        ``(a) Program.--The Secretary shall establish a cultural and
    linguistic competency training program for health care professionals,
    including nurse professionals, consisting of awarding grants and
    contracts under subsection (b).
        ``(b) Cultural and Linguistic Competency Training.--The Secretary
    shall award grants and contracts to eligible entities--
                ``(1) to test, develop, and evaluate models of cultural and
            linguistic competency training (including continuing education)
            for health professionals; and
                ``(2) to implement cultural and linguistic competency
            training programs for health professionals developed under
            paragraph (1) or otherwise.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (b), an entity shall be--
                ``(1) an accredited health professions school or program;
                ``(2) an academic health center;
                ``(3) a public or private nonprofit entity; or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preference.--In awarding grants and contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Addressing, or partnering with an entity with
            experience addressing, the cultural and linguistic competency
            needs of the population to be served through the grant or
            contract.
                ``(2) Addressing health disparities.
                ``(3) Placing health professionals in regions experiencing
            significant changes in the cultural and linguistic demographics
            of populations, including communities along the United States-
            Mexico border.
                ``(4) Carrying out activities described in subsection (b)
            with respect to more than one health profession discipline,
            specialty, or subspecialty.
        ``(e) Consultation.--The Secretary shall carry out this section in
    consultation with the heads of appropriate health agencies and offices
    in the Department of Health and Human Services, including the Office of
    Minority Health.
        ``(f) Definition.--In this section, the term `health disparities'
    has the meaning given to the term in section 3171.
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.''.

    SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

        Part D of title VII (42 U.S.C. 294 et seq.) is amended by adding at
    the end the following:

    ``SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

        ``(a) Program.--The Secretary shall establish an innovations in
    interdisciplinary care training program consisting of awarding grants
    and contracts under subsection (b).
        ``(b) Training Programs.--The Secretary shall award grants to, or
    enter into contracts with, eligible entities--
                ``(1) to test, develop, and evaluate health professional
            training programs (including continuing education) designed to
            promote--
                        ``(A) the delivery of health services through
                    interdisciplinary and team-based models, which may
                    include patient-centered medical home models,
                    medication therapy management models, and models
                    integrating physical, mental, or oral health services;
                    and
                        ``(B) coordination of the delivery of health care
                    within and across settings, including health care
                    institutions, community-based settings, and the
                    patient's home; and
                ``(2) to implement such training programs developed under
            paragraph (1) or otherwise.
        ``(c) Eligibility.--To be eligible for a grant or contract under
    subsection (b), an entity shall be--
                ``(1) an accredited health professions school or program;
                ``(2) an academic health center;
                ``(3) a public or private nonprofit entity (including an
            area health education center or a geriatric education center);
            or
                ``(4) a consortium of 2 or more entities described in
            paragraphs (1) through (3).
        ``(d) Preferences.--In awarding grants and contracts under this
    section, the Secretary shall give preference to entities that have a
    demonstrated record of the following:
                ``(1) Training the greatest percentage, or significantly
            increasing the percentage, of health professionals who serve in
            underserved communities.
                ``(2) Broad interdisciplinary team-based collaborations.
                ``(3) Addressing health disparities.
        ``(e) Report.--The Secretary shall submit to the Congress an annual
    report on the program carried out under this section.
        ``(f) Definitions.--In this section:
                ``(1) The term `health disparities' has the meaning given
            the term in section 3171.
                ``(2) The term `interdisciplinary' means collaboration
            across health professions and specialties, which may include
            public health, nursing, allied health, and appropriate medical
            specialties.''.

         PART 3--ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND
                                   ASSESSMENT

    SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

        Subpart 1 of part E of title VII (42 U.S.C. 294n et seq.) is
    amended by adding at the end the following:

    ``SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

        ``(a) Advisory Committee.--The Secretary, acting through the
    Assistant Secretary for Health, shall establish a permanent advisory
    committee to be known as the Advisory Committee on Health Workforce
    Evaluation and Assessment (referred to in this section as the `Advisory
    Committee').
        ``(b) Responsibilities.--The Advisory Committee shall--
                ``(1) not later than 1 year after the date of the
            establishment of the Advisory Committee, submit recommendations
            to the Secretary on--
                        ``(A) classifications of the health workforce to
                    ensure consistency of data collection on the health
                    workforce; and
                        ``(B) based on such classifications, standardized
                    methodologies and procedures to enumerate the health
                    workforce;
                ``(2) not later than 2 years after the date of the
            establishment of the Advisory Committee, submit recommendations
            to the Secretary on--
                        ``(A) the supply, diversity, and geographic
                    distribution of the health workforce;
                        ``(B) the retention of the health workforce to
                    ensure quality and adequacy of such workforce; and
                        ``(C) policies to carry out the recommendations
                    made pursuant to subparagraphs (A) and (B); and
                ``(3) not later than 4 years after the date of the
            establishment of the Advisory Committee, and every 2 years
            thereafter, submit updated recommendations to the Secretary
            under paragraphs (1) and (2).
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Advisory Committee, including coordinating and supporting the
    dissemination of the recommendations of the Advisory Committee.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Secretary shall appoint 15
            members to serve on the Advisory Committee.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Advisory Committee for a term of 3 years
                    and may reappoint such members, but the Secretary may
                    not appoint any member to serve more than a total of 6
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to the
                    Advisory Committee under paragraph (1)--
                                ``(i) 5 shall be appointed for a term of 1
                            year;
                                ``(ii) 5 shall be appointed for a term of 2
                            years; and
                                ``(iii) 5 shall be appointed for a term of
                            3 years.
                ``(3) Qualifications.--Members of the Advisory Committee
            shall be appointed from among individuals who possess expertise
            in at least one of the following areas:
                        ``(A) Conducting and interpreting health workforce
                    market analysis, including health care labor workforce
                    analysis.
                        ``(B) Conducting and interpreting health finance
                    and economics research.
                        ``(C) Delivering and administering health care
                    services.
                        ``(D) Delivering and administering health workforce
                    education and training.
                ``(4) Representation.--In appointing members of the
            Advisory Committee, the Secretary shall--
                        ``(A) include no less than one representative of
                    each of--
                                ``(i) health professionals within the
                            health workforce;
                                ``(ii) health care patients and consumers;
                                ``(iii) employers;
                                ``(iv) labor unions; and
                                ``(v) third-party health payors; and
                        ``(B) ensure that--
                                ``(i) all areas of expertise described in
                            paragraph (3) are represented;
                                ``(ii) the members of the Advisory
                            Committee include members who, collectively,
                            have significant experience working with--
                                        ``(I) populations in urban and
                                    federally designated rural and
                                    nonmetropolitan areas; and
                                        ``(II) populations who are
                                    underrepresented in the health
                                    professions, including underrepresented
                                    minority groups; and
                                ``(iii) individuals who are directly
                            involved in health professions education or
                            practice do not constitute a majority of the
                            members of the Advisory Committee.
                ``(5) Disclosure and conflicts of interest.--Members of the
            Advisory Committee shall not be considered employees of the
            Federal Government by reason of service on the Advisory
            Committee, except members of the Advisory Committee shall be
            considered to be special Government employees within the
            meaning of section 107 of the Ethics in Government Act of 1978
            (5 U.S.C. App.) and section 208 of title 18, United States
            Code, for the purposes of disclosure and management of
            conflicts of interest under those sections.
                ``(6) No pay; receipt of travel expenses.--Members of the
            Advisory Committee shall not receive any pay for service on the
            Committee, but may receive travel expenses, including a per
            diem, in accordance with applicable provisions of subchapter I
            of chapter 57 of title 5, United States Code.
        ``(e) Consultation.--In carrying out this section, the Secretary
    shall consult with the Secretary of Education and the Secretary of
    Labor.
        ``(f) Collaboration.--The Advisory Committee shall collaborate with
    the advisory bodies at the Health Resources and Services
    Administration, the National Advisory Council (as authorized in section
    337), the Advisory Committee on Training in Primary Care Medicine and
    Dentistry (as authorized in section 749A), the Advisory Committee on
    Interdisciplinary, Community-Based Linkages (as authorized in section
    756), the Advisory Council on Graduate Medical Education (as authorized
    in section 762), and the National Advisory Council on Nurse Education
    and Practice (as authorized in section 851).
        ``(g) FACA.--The Federal Advisory Committee Act (5 U.S.C. App.)
    except for section 14 of such Act shall apply to the Advisory Committee
    under this section only to the extent that the provisions of such Act
    do not conflict with the requirements of this section.
        ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on the activities of the Advisory Committee.
        ``(i) Definition.--In this section, the term `health workforce'
    includes all health care providers with direct patient care and support
    responsibilities, including physicians, nurses, physician assistants,
    pharmacists, oral health professionals (as defined in section 749(f)),
    allied health professionals, mental and behavioral professionals, and
    public health professionals (including veterinarians engaged in public
    health practice).''.

                      PART 4--HEALTH WORKFORCE ASSESSMENT

    SEC. 2271. HEALTH WORKFORCE ASSESSMENT.

        (a) In General.--Section 761 (42 U.S.C. 294n) is amended--
                (1) by redesignating subsection (c) as subsection (e); and
                (2) by striking subsections (a) and (b) and inserting the
            following:
        ``(a) In General.--The Secretary shall, based upon the
    classifications and standardized methodologies and procedures developed
    by the Advisory Committee on Health Workforce Evaluation and Assessment
    under section 764(b)--
                ``(1) collect data on the health workforce (as defined in
            section 764(i)), disaggregated by field, discipline, and
            specialty, with respect to--
                        ``(A) the supply (including retention) of health
                    professionals relative to the demand for such
                    professionals;
                        ``(B) the diversity of health professionals
                    (including with respect to race, ethnic background, and
                    gender); and
                        ``(C) the geographic distribution of health
                    professionals; and
                ``(2) collect such data on individuals participating in the
            programs authorized by subtitles A, B, and C and part 1 of
            subtitle D of title II of subdivision C of the America's
            Affordable Health Choices Act of 2009.
        ``(b) Grants and Contracts for Health Workforce Analysis.--
                ``(1) In general.--The Secretary may award grants or
            contracts to eligible entities to carry out subsection (a).
                ``(2) Eligibility.--To be eligible for a grant or contract
            under this subsection, an entity shall be--
                        ``(A) an accredited health professions school or
                    program;
                        ``(B) an academic health center;
                        ``(C) a State, local, or tribal government;
                        ``(D) a public or private entity; or
                        ``(E) a consortium of 2 or more entities described
                    in subparagraphs (A) through (D).
        ``(c) Collaboration and Data Sharing.--The Secretary shall
    collaborate with Federal departments and agencies, health professions
    organizations (including health professions education organizations),
    and professional medical societies for the purpose of carrying out
    subsection (a).
        ``(d) Report.--The Secretary shall submit to the Congress an annual
    report on the data collected under subsection (a).''.
        (b) Period Before Completion of National Strategy.--Pending
    completion of the classifications and standardized methodologies and
    procedures developed by the Advisory Committee on Health Workforce
    Evaluation and Assessment under section 764(b) of the Public Health
    Service Act, as added by section 2261, the Secretary of Health and
    Human Services, acting through the Administrator of the Health
    Resources and Services Administration and in consultation with such
    Advisory Committee, may make a judgment about the classifications,
    methodologies, and procedures to be used for collection of data under
    section 761(a) of the Public Health Service Act, as amended by this
    section.

                    PART 5--AUTHORIZATION OF APPROPRIATIONS

    SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--Section 799C, as added by section 2216 of this
    division, is amended by adding at the end the following:
        ``(c) Health Professions Training for Diversity.--For the purpose
    of carrying out sections 736, 737, 738, 739, and 739A, in addition to
    any other amounts authorized to be appropriated for such purpose, there
    are authorized to be appropriated, out of any monies in the Public
    Health Investment Fund, the following:
                ``(1) $90,000,000 for fiscal year 2010.
                ``(2) $97,000,000 for fiscal year 2011.
                ``(3) $100,000,000 for fiscal year 2012.
                ``(4) $104,000,000 for fiscal year 2013.
                ``(5) $110,000,000 for fiscal year 2014.
                ``(6) $116,000,000 for fiscal year 2015.
                ``(7) $121,000,000 for fiscal year 2016.
                ``(8) $127,000,000 for fiscal year 2017.
                ``(9) $133,000,000 for fiscal year 2018.
                ``(10) $140,000,000 for fiscal year 2019.
        ``(d) Interdisciplinary Training Programs, Advisory Committee on
    Health Workforce Evaluation and Assessment, and Health Workforce
    Assessment.--For the purpose of carrying out sections 741, 759, 761,
    and 764, in addition to any other amounts authorized to be appropriated
    for such purpose, there are authorized to be appropriated, out of any
    monies in the Public Health Investment Fund, the following:
                ``(1) $91,000,000 for fiscal year 2010.
                ``(2) $97,000,000 for fiscal year 2011.
                ``(3) $101,000,000 for fiscal year 2012.
                ``(4) $105,000,000 for fiscal year 2013.
                ``(5) $111,000,000 for fiscal year 2014.
                ``(6) $117,000,000 for fiscal year 2015.
                ``(7) $122,000,000 for fiscal year 2016.
                ``(8) $129,000,000 for fiscal year 2017.
                ``(9) $135,000,000 for fiscal year 2018.
                ``(10) $141,000,000 for fiscal year 2019.''.
        (b) Existing Authorizations of Appropriations.--
                (1) Section 736.--Paragraph (1) of section 736(h) (42
            U.S.C. 293(h)) is amended by striking ``2002'' and inserting
            ``2019''.
                (2) Sections 737, 738, and 739.--Subsections (a), (b), and
            (c) of section 740 are amended by striking ``2002'' each place
            it appears and inserting ``2019''.
                (3) Section 741.--Subsection (h), as so redesignated, of
            section 741 is amended--
                        (A) by striking ``and'' after ``fiscal year
                    2003,''; and
                        (B) by inserting ``, and such sums as may be
                    necessary for subsequent fiscal years through the end
                    of fiscal year 2019'' before the period at the end.
                (4) Section 761.--Subsection (e)(1), as so redesignated, of
            section 761 is amended by striking ``2002'' and inserting
            ``2019''.

                       TITLE III--PREVENTION AND WELLNESS

    SEC. 2301. PREVENTION AND WELLNESS.

        (a) In General.--The Public Health Service Act (42 U.S.C. 201 et
    seq.) is amended by adding at the end the following:

                     ``TITLE XXXI--PREVENTION AND WELLNESS

                  ``Subtitle A--Prevention and Wellness Trust

    ``SEC. 3111. PREVENTION AND WELLNESS TRUST.

        ``(a) Deposits Into Trust.--There is established a Prevention and
    Wellness Trust. There are authorized to be appropriated to the Trust--
                ``(1) amounts described in section 2002(b)(2)(ii) of the
            America's Affordable Health Choices Act of 2009 for each fiscal
            year; and
                ``(2) in addition, out of any monies in the Public Health
            Investment Fund--
                        ``(A) for fiscal year 2010, $2,400,000,000;
                        ``(B) for fiscal year 2011, $2,800,000,000;
                        ``(C) for fiscal year 2012, $3,100,000,000;
                        ``(D) for fiscal year 2013, $3,400,000,000;
                        ``(E) for fiscal year 2014, $3,500,000,000;
                        ``(F) for fiscal year 2015, $3,600,000,000;
                        ``(G) for fiscal year 2016, $3,700,000,000;
                        ``(H) for fiscal year 2017, $3,900,000,000;
                        ``(I) for fiscal year 2018, $4,300,000,000; and
                        ``(J) for fiscal year 2019, $4,600,000,000.
        ``(b) Availability of Funds.--Amounts in the Prevention and
    Wellness Trust shall be available, as provided in advance in
    appropriation Acts, for carrying out this title.
        ``(c) Allocation.--Of the amounts authorized to be appropriated in
    subsection (a)(2), there are authorized to be appropriated--
                ``(1) for carrying out subtitle C (Prevention Task Forces),
            $35,000,000 for each of fiscal years 2010 through 2019;
                ``(2) for carrying out subtitle D (Prevention and Wellness
            Research)--
                        ``(A) for fiscal year 2010, $100,000,000;
                        ``(B) for fiscal year 2011, $150,000,000;
                        ``(C) for fiscal year 2012, $200,000,000;
                        ``(D) for fiscal year 2013, $250,000,000;
                        ``(E) for fiscal year 2014, $300,000,000;
                        ``(F) for fiscal year 2015, $315,000,000;
                        ``(G) for fiscal year 2016, $331,000,000;
                        ``(H) for fiscal year 2017, $347,000,000;
                        ``(I) for fiscal year 2018, $364,000,000; and
                        ``(J) for fiscal year 2019, $383,000,000.
                ``(3) for carrying out subtitle E (Delivery of Community
            Preventive and Wellness Services)--
                        ``(A) for fiscal year 2010, $1,100,000,000;
                        ``(B) for fiscal year 2011, $1,300,000,000;
                        ``(C) for fiscal year 2012, $1,400,000,000;
                        ``(D) for fiscal year 2013, $1,600,000,000;
                        ``(E) for fiscal year 2014, $1,700,000,000;
                        ``(F) for fiscal year 2015, $1,800,000,000;
                        ``(G) for fiscal year 2016, $1,900,000,000;
                        ``(H) for fiscal year 2017, $2,000,000,000;
                        ``(I) for fiscal year 2018, $2,100,000,000; and
                        ``(J) for fiscal year 2019, $2,300,000,000.
                ``(4) for carrying out section 3161 (Core Public Health
            Infrastructure and Activities for State and Local Health
            Departments)--
                        ``(A) for fiscal year 2010, $800,000,000;
                        ``(B) for fiscal year 2011, $1,000,000,000;
                        ``(C) for fiscal year 2012, $1,100,000,000;
                        ``(D) for fiscal year 2013, $1,200,000,000;
                        ``(E) for fiscal year 2014, $1,300,000,000;
                        ``(F) for fiscal year 2015, $1,400,000,000;
                        ``(G) for fiscal year 2016, $1,500,000,000;
                        ``(H) for fiscal year 2017, $1,600,000,000;
                        ``(I) for fiscal year 2018, $1,800,000,000; and
                        ``(J) for fiscal year 2019, $1,900,000,000; and
                ``(5) for carrying out section 3162 (Core Public Health
            Infrastructure and Activities for CDC), $400,000,000 for each
            of fiscal years 2010 through 2019.

            ``Subtitle B--National Prevention and Wellness Strategy

    ``SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRATEGY.

        ``(a) In General.--The Secretary shall submit to the Congress
    within one year after the date of the enactment of this section, and at
    least every 2 years thereafter, a national strategy that is designed to
    improve the Nation's health through evidence-based clinical and
    community prevention and wellness activities (in this section referred
    to as `prevention and wellness activities'), including core public
    health infrastructure improvement activities.
        ``(b) Contents.--The strategy under subsection (a) shall include
    each of the following:
                ``(1) Identification of specific national goals and
            objectives in prevention and wellness activities that take into
            account appropriate public health measures and standards,
            including departmental measures and standards (including
            Healthy People and National Public Health Performance
            Standards).
                ``(2) Establishment of national priorities for prevention
            and wellness, taking into account unmet prevention and wellness
            needs.
                ``(3) Establishment of national priorities for research on
            prevention and wellness, taking into account unanswered
            research questions on prevention and wellness.
                ``(4) Identification of health disparities in prevention
            and wellness.
                ``(5) A plan for addressing and implementing paragraphs (1)
            through (4).
        ``(c) Consultation.--In developing or revising the strategy under
    subsection (a), the Secretary shall consult with the following:
                ``(1) The heads of appropriate health agencies and offices
            in the Department, including the Office of the Surgeon General
            of the Public Health Service, the Office of Minority Health,
            and the Office on Women's Health.
                ``(2) As appropriate, the heads of other Federal
            departments and agencies whose programs have a significant
            impact upon health (as determined by the Secretary).
                ``(3) As appropriate, nonprofit and for-profit entities.
                ``(4) The Association of State and Territorial Health
            Officials and the National Association of County and City
            Health Officials.

                      ``Subtitle C--Prevention Task Forces

    ``SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERVICES.

        ``(a) In General.--The Secretary, acting through the Director of
    the Agency for Healthcare Research and Quality, shall establish a
    permanent task force to be known as the Task Force on Clinical
    Preventive Services (in this section referred to as the `Task Force').
        ``(b) Responsibilities.--The Task Force shall--
                ``(1) identify clinical preventive services for review;
                ``(2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of clinical
            preventive services identified under paragraph (1) for the
            purpose of developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(3) as appropriate, take into account health disparities
            in developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(4) identify gaps in clinical preventive services
            research and evaluation and recommend priority areas for such
            research and evaluation;
                ``(5) as appropriate, consult with the clinical prevention
            stakeholders board in accordance with subsection (f);
                ``(6) as appropriate, consult with the Task Force on
            Community Preventive Services established under section 3132;
            and
                ``(7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to
                    serve on the Task Force after the enactment of this
                    title--
                                ``(i) 10 shall be appointed for a term of 2
                            years;
                                ``(ii) 10 shall be appointed for a term of
                            4 years; and
                                ``(iii) 10 shall be appointed for a term of
                            6 years.
                ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                        ``(A) Health promotion and disease prevention.
                        ``(B) Evaluation of research and systematic
                    evidence reviews.
                        ``(C) Application of systematic evidence reviews to
                    clinical decisionmaking or health policy.
                        ``(D) Clinical primary care in child and adolescent
                    health.
                        ``(E) Clinical primary care in adult health,
                    including women's health.
                        ``(F) Clinical primary care in geriatrics.
                        ``(G) Clinical counseling and behavioral services
                    for primary care patients.
                ``(4) Representation.--In appointing members of the Task
            Force, the Secretary shall ensure that--
                        ``(A) all areas of expertise described in paragraph
                    (3) are represented; and
                        ``(B) the members of the Task Force include
                    practitioners who, collectively, have significant
                    experience treating racially and ethnically diverse
                    populations.
        ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
        ``(f) Clinical Prevention Stakeholders Board.--
                ``(1) In general.--The Task Force shall convene a clinical
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            clinical preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of clinical preventive
            services.
                ``(2) Membership.--The members of the clinical prevention
            stakeholders board shall include representatives of the
            following:
                        ``(A) Health care consumers and patient groups.
                        ``(B) Providers of clinical preventive services,
                    including community-based providers.
                        ``(C) Federal departments and agencies, including--
                                ``(i) appropriate health agencies and
                            offices in the Department, including the Office
                            of the Surgeon General of the Public Health
                            Service, the Office of Minority Health, and the
                            Office on Women's Health; and
                                ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                        ``(D) Private health care payors.
                ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the clinical prevention stakeholders board shall--
                        ``(A) recommend clinical preventive services for
                    review by the Task Force;
                        ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                        ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                        ``(D) assist with efforts regarding dissemination
                    of recommendations by the Director of the Agency for
                    Healthcare Research and Quality.
        ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the clinical prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force, except members of the Task Force shall be considered to
    be special Government employees within the meaning of section 107 of
    the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of
    title 18, United States Code, for the purposes of disclosure and
    management of conflicts of interest under those sections.
        ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the clinical prevention stakeholders board shall not receive
    any pay for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
        ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
        ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).

    ``SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE SERVICES.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall establish a
    permanent task force to be known as the Task Force on Community
    Preventive Services (in this section referred to as the `Task Force').
        ``(b) Responsibilities.--The Task Force shall--
                ``(1) identify community preventive services for review;
                ``(2) review the scientific evidence related to the
            benefits, effectiveness, appropriateness, and costs of
            community preventive services identified under paragraph (1)
            for the purpose of developing, updating, publishing, and
            disseminating evidence-based recommendations on the use of such
            services;
                ``(3) as appropriate, take into account health disparities
            in developing, updating, publishing, and disseminating
            evidence-based recommendations on the use of such services;
                ``(4) identify gaps in community preventive services
            research and evaluation and recommend priority areas for such
            research and evaluation;
                ``(5) as appropriate, consult with the community prevention
            stakeholders board in accordance with subsection (f);
                ``(6) as appropriate, consult with the Task Force on
            Clinical Preventive Services established under section 3131;
            and
                ``(7) as appropriate, in carrying out this section,
            consider the national strategy under section 3121.
        ``(c) Role of Agency.--The Secretary shall provide ongoing
    administrative, research, and technical support for the operations of
    the Task Force, including coordinating and supporting the dissemination
    of the recommendations of the Task Force.
        ``(d) Membership.--
                ``(1) Number; appointment.--The Task Force shall be
            composed of 30 members, appointed by the Secretary.
                ``(2) Terms.--
                        ``(A) In general.--The Secretary shall appoint
                    members of the Task Force for a term of 6 years and may
                    reappoint such members, but the Secretary may not
                    appoint any member to serve more than a total of 12
                    years.
                        ``(B) Staggered terms.--Notwithstanding
                    subparagraph (A), of the members first appointed to
                    serve on the Task Force after the enactment of this
                    section--
                                ``(i) 10 shall be appointed for a term of 2
                            years;
                                ``(ii) 10 shall be appointed for a term of
                            4 years; and
                                ``(iii) 10 shall be appointed for a term of
                            6 years.
                ``(3) Qualifications.--Members of the Task Force shall be
            appointed from among individuals who possess expertise in at
            least one of the following areas:
                        ``(A) Public health.
                        ``(B) Evaluation of research and systematic
                    evidence reviews.
                        ``(C) Disciplines relevant to community preventive
                    services, including health promotion; disease
                    prevention; chronic disease; worksite health;
                    qualitative and quantitative analysis; and health
                    economics, policy, law, and statistics.
                ``(4) Representation.--In appointing members of the Task
            Force, the Secretary--
                        ``(A) shall ensure that all areas of expertise
                    described in paragraph (3) are represented;
                        ``(B) shall ensure that such members include
                    sufficient representatives of each of--
                                ``(i) State health officers;
                                ``(ii) local health officers;
                                ``(iii) health care practitioners; and
                                ``(iv) public health practitioners; and
                        ``(C) shall appoint individuals who, collectively,
                    have significant experience working with racially and
                    ethnically diverse populations.
        ``(e) Subgroups.--As appropriate to maximize efficiency, the Task
    Force may delegate authority for conducting reviews and making
    recommendations to subgroups consisting of Task Force members, subject
    to final approval by the Task Force.
        ``(f) Community Prevention Stakeholders Board.--
                ``(1) In general.--The Task Force shall convene a community
            prevention stakeholders board composed of representatives of
            appropriate public and private entities with an interest in
            community preventive services to advise the Task Force on
            developing, updating, publishing, and disseminating evidence-
            based recommendations on the use of community preventive
            services.
                ``(2) Membership.--The members of the community prevention
            stakeholders board shall include representatives of the
            following:
                        ``(A) Health care consumers and patient groups.
                        ``(B) Providers of community preventive services,
                    including community-based providers.
                        ``(C) Federal departments and agencies, including--
                                ``(i) appropriate health agencies and
                            offices in the Department, including the Office
                            of the Surgeon General of the Public Health
                            Service, the Office of Minority Health, and the
                            Office on Women's Health; and
                                ``(ii) as appropriate, other Federal
                            departments and agencies whose programs have a
                            significant impact upon health (as determined
                            by the Secretary).
                        ``(D) Private health care payors.
                ``(3) Responsibilities.--In accordance with subsection
            (b)(5), the community prevention stakeholders board shall--
                        ``(A) recommend community preventive services for
                    review by the Task Force;
                        ``(B) suggest scientific evidence for consideration
                    by the Task Force related to reviews undertaken by the
                    Task Force;
                        ``(C) provide feedback regarding draft
                    recommendations by the Task Force; and
                        ``(D) assist with efforts regarding dissemination
                    of recommendations by the Director of the Centers for
                    Disease Control and Prevention.
        ``(g) Disclosure and Conflicts of Interest.--Members of the Task
    Force or the community prevention stakeholders board shall not be
    considered employees of the Federal Government by reason of service on
    the Task Force, except members of the Task Force shall be considered to
    be special Government employees within the meaning of section 107 of
    the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of
    title 18, United States Code, for the purposes of disclosure and
    management of conflicts of interest under those sections.
        ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task
    Force or the community prevention stakeholders board shall not receive
    any pay for service on the Task Force, but may receive travel expenses,
    including a per diem, in accordance with applicable provisions of
    subchapter I of chapter 57 of title 5, United States Code.
        ``(i) Application of FACA.--The Federal Advisory Committee Act (5
    U.S.C. App.) except for section 14 of such Act shall apply to the Task
    Force to the extent that the provisions of such Act do not conflict
    with the provisions of this title.
        ``(j) Report.--The Secretary shall submit to the Congress an annual
    report on the Task Force, including with respect to gaps identified and
    recommendations made under subsection (b)(4).

                 ``Subtitle D--Prevention and Wellness Research

    ``SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIVITY COORDINATION.

        ``In conducting or supporting research on prevention and wellness,
    the Director of the Centers for Disease Control and Prevention, the
    Director of the National Institutes of Health, and the heads of other
    agencies within the Department of Health and Human Services conducting
    or supporting such research, shall take into consideration the national
    strategy under section 3121 and the recommendations of the Task Force
    on Clinical Preventive Services under section 3131 and the Task Force
    on Community Preventive Services under section 3132.

    ``SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCH GRANTS.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall conduct, or award
    grants to eligible entities to conduct, research in priority areas
    identified by the Secretary in the national strategy under section 3121
    or by the Task Force on Community Preventive Services as required by
    section 3132.
        ``(b) Eligibility.--To be eligible for a grant under this section,
    an entity shall be--
                ``(1) a State, local, or tribal department of health;
                ``(2) a public or private nonprofit entity; or
                ``(3) a consortium of 2 or more entities described in
            paragraphs (1) and (2).
        ``(c) Report.--The Secretary shall submit to the Congress an annual
    report on the program of research under this section.

      ``Subtitle E--Delivery of Community Prevention and Wellness Services

    ``SEC. 3151. COMMUNITY PREVENTION AND WELLNESS SERVICES GRANTS.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall establish a
    program for the delivery of community preventive and wellness services
    consisting of awarding grants to eligible entities--
                ``(1) to provide evidence-based, community preventive and
            wellness services in priority areas identified by the Secretary
            in the national strategy under section 3121; or
                ``(2) to plan such services.
        ``(b) Eligibility.--
                ``(1) Definition.--To be eligible for a grant under this
            section, an entity shall be--
                        ``(A) a State, local, or tribal department of
                    health;
                        ``(B) a public or private entity; or
                        ``(C) a consortium of--
                                ``(i) 2 or more entities described in
                            subparagraph (A) or (B); and
                                ``(ii) a community partnership representing
                            a Health Empowerment Zone.
                ``(2) Health empowerment zone.--In this subsection, the
            term `Health Empowerment Zone' means an area--
                        ``(A) in which multiple community preventive and
                    wellness services are implemented in order to address
                    one or more health disparities, including those
                    identified by the Secretary in the national strategy
                    under section 3121; and
                        ``(B) which is represented by a community
                    partnership that demonstrates community support and
                    coordination with State, local, or tribal health
                    departments and includes--
                                ``(i) a broad cross section of
                            stakeholders;
                                ``(ii) residents of the community; and
                                ``(iii) representatives of entities that
                            have a history of working within and serving
                            the community.
        ``(c) Preferences.--In awarding grants under this section, the
    Secretary shall give preference to entities that--
                ``(1) will address one or more goals or objectives
            identified by the Secretary in the national strategy under
            section 3121;
                ``(2) will address significant health disparities,
            including those identified by the Secretary in the national
            strategy under section 3121;
                ``(3) will address unmet community prevention needs and
            avoids duplication of effort;
                ``(4) have been demonstrated to be effective in communities
            comparable to the proposed target community;
                ``(5) will contribute to the evidence base for community
            preventive and wellness services;
                ``(6) demonstrate that the community preventive services to
            be funded will be sustainable; and
                ``(7) demonstrate coordination or collaboration across
            governmental and nongovernmental partners.
        ``(d) Health Disparities.--Of the funds awarded under this section
    for a fiscal year, the Secretary shall award not less than 50 percent
    for planning or implementing community preventive and wellness services
    whose primary purpose is to achieve a measurable reduction in one or
    more health disparities, including those identified by the Secretary in
    the national strategy under section 3121.
        ``(e) Emphasis on Recommended Services.--For fiscal year 2013 and
    subsequent fiscal years, the Secretary shall award grants under this
    section only for planning or implementing services recommended by the
    Task Force on Community Preventive Services under section 3122 or
    deemed effective based on a review of comparable rigor (as determined
    by the Director of the Centers for Disease Control and Prevention).
        ``(f) Prohibited Uses of Funds.--An entity that receives a grant
    under this section may not use funds provided through the grant--
                ``(1) to build or acquire real property or for
            construction; or
                ``(2) for services or planning to the extent that payment
            has been made, or can reasonably be expected to be made--
                        ``(A) under any insurance policy;
                        ``(B) under any Federal or State health benefits
                    program (including titles XIX and XXI of the Social
                    Security Act); or
                        ``(C) by an entity which provides health services
                    on a prepaid basis.
        ``(g) Report.--The Secretary shall submit to the Congress an annual
    report on the program of grants awarded under this section.
        ``(h) Definitions.--In this section, the term `evidence-based'
    means that methodologically sound research has demonstrated a
    beneficial health effect, in the judgment of the Director of the
    Centers for Disease Control and Prevention.

                ``Subtitle F--Core Public Health Infrastructure

    ``SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR STATE, LOCAL, AND
                  TRIBAL HEALTH DEPARTMENTS.

        ``(a) Program.--The Secretary, acting through the Director of the
    Centers for Disease Control and Prevention shall establish a core
    public health infrastructure program consisting of awarding grants
    under subsection (b).
        ``(b) Grants.--
                ``(1) Award.--For the purpose of addressing core public
            health infrastructure needs, the Secretary--
                        ``(A) shall award a grant to each State health
                    department; and
                        ``(B) may award grants on a competitive basis to
                    State, local, or tribal health departments.
                ``(2) Allocation.--Of the total amount of funds awarded as
            grants under this subsection for a fiscal year--
                        ``(A) not less than 50 percent shall be for grants
                    to State health departments under paragraph (1)(A); and
                        ``(B) not less than 30 percent shall be for grants
                    to State, local, or tribal health departments under
                    paragraph (1)(B).
        ``(c) Use of Funds.--The Secretary may award a grant to an entity
    under subsection (b)(1) only if the entity agrees to use the grant to
    address core public health infrastructure needs, including those
    identified in the accreditation process under subsection (g).
        ``(d) Formula Grants to State Health Departments.--In making grants
    under subsection (b)(1)(A), the Secretary shall award funds to each
    State health department in accordance with--
                ``(1) a formula based on population size; burden of
            preventable disease and disability; and core public health
            infrastructure gaps, including those identified in the
            accreditation process under subsection (g); and
                ``(2) application requirements established by the
            Secretary, including a requirement that the State submit a plan
            that demonstrates to the satisfaction of the Secretary that the
            State's health department will--
                        ``(A) address its highest priority core public
                    health infrastructure needs; and
                        ``(B) as appropriate, allocate funds to local
                    health departments within the State.
        ``(e) Competitive Grants to State, Local, and Tribal Health
    Departments.--In making grants under subsection (b)(1)(B), the
    Secretary shall give priority to applicants demonstrating core public
    health infrastructure needs identified in the accreditation process
    under subsection (g).
        ``(f) Maintenance of Effort.--The Secretary may award a grant to an
    entity under subsection (b) only if the entity demonstrates to the
    satisfaction of the Secretary that--
                ``(1) funds received through the grant will be expended
            only to supplement, and not supplant, non-Federal and Federal
            funds otherwise available to the entity for the purpose of
            addressing core public health infrastructure needs; and
                ``(2) with respect to activities for which the grant is
            awarded, the entity will maintain expenditures of non-Federal
            amounts for such activities at a level not less than the level
            of such expenditures maintained by the entity for the fiscal
            year preceding the fiscal year for which the entity receives
            the grant.
        ``(g) Establishment of a Public Health Accreditation Program.--
                ``(1) In general.--The Secretary, acting through the
            Director of the Centers for Disease Control and Prevention,
            shall--
                        ``(A) develop, and periodically review and update,
                    standards for voluntary accreditation of State, local,
                    or tribal health departments and public health
                    laboratories for the purpose of advancing the quality
                    and performance of such departments and laboratories;
                    and
                        ``(B) implement a program to accredit such health
                    departments and laboratories in accordance with such
                    standards.
                ``(2) Cooperative agreement.--The Secretary may enter into
            a cooperative agreement with a private nonprofit entity to
            carry out paragraph (1).
        ``(h) Report.--The Secretary shall submit to the Congress an annual
    report on progress being made to accredit entities under subsection
    (g), including--
                ``(1) a strategy, including goals and objectives, for
            accrediting entities under subsection (g) and achieving the
            purpose described in subsection (g)(1); and
                ``(2) identification of gaps in research related to core
            public health infrastructure and recommendations of priority
            areas for such research.

    ``SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND ACTIVITIES FOR CDC.

        ``(a) In General.--The Secretary, acting through the Director of
    the Centers for Disease Control and Prevention, shall expand and
    improve the core public health infrastructure and activities of the
    Centers for Disease Control and Prevention to address unmet and
    emerging public health needs.
        ``(b) Report.--The Secretary shall submit to the Congress an annual
    report on the activities funded through this section.

                        ``Subtitle G--General Provisions

    ``SEC. 3171. DEFINITIONS.

        ``In this title:
                ``(1) The term `core public health infrastructure' includes
            workforce capacity and competency; laboratory systems; health
            information, health information systems, and health information
            analysis; communications; financing; other relevant components
            of organizational capacity; and other related activities.
                ``(2) The terms `Department' and `departmental' refer to
            the Department of Health and Human Services.
                ``(3) The term `health disparities' includes health and
            health care disparities and means population-specific
            differences in the presence of disease, health outcomes, or
            access to health care. For purposes of the preceding sentence,
            a population may be delineated by race, ethnicity, geographic
            setting, or other population or subpopulation determined
            appropriate by the Secretary.
                ``(4) The term `tribal' refers to an Indian tribe, a Tribal
            organization, or an Urban Indian organization, as such terms
            are defined in section 4 of the Indian Health Care Improvement
            Act.''.
        (b) Transition Provisions Applicable to Task Forces.--
                (1) Functions, personnel, assets, liabilities, and
            administrative actions.--All functions, personnel, assets, and
            liabilities of, and administrative actions applicable to, the
            Preventive Services Task Force convened under section 915(a) of
            the Public Health Service Act and the Task Force on Community
            Preventive Services (as such section and Task Forces were in
            existence on the day before the date of the enactment of this
            Act) shall be transferred to the Task Force on Clinical
            Preventive Services and the Task Force on Community Preventive
            Services, respectively, established under sections 3121 and
            3122 of the Public Health Service Act, as added by subsection
            (a).
                (2) Recommendations.--All recommendations of the Preventive
            Services Task Force and the Task Force on Community Preventive
            Services, as in existence on the day before the date of the
            enactment of this Act, shall be considered to be
            recommendations of the Task Force on Clinical Preventive
            Services and the Task Force on Community Preventive Services,
            respectively, established under sections 3121 and 3122 of the
            Public Health Service Act, as added by subsection (a).
                (3) Members already serving.--
                        (A) Initial members.--The Secretary of Health and
                    Human Services may select those individuals already
                    serving on the Preventive Services Task Force and the
                    Task Force on Community Preventive Services, as in
                    existence on the day before the date of the enactment
                    of this Act, to be among the first members appointed to
                    the Task Force on Clinical Preventive Services and the
                    Task Force on Community Preventive Services,
                    respectively, under sections 3121 and 3122 of the
                    Public Health Service Act, as added by subsection (a).
                        (B) Calculation of total service.--In calculating
                    the total years of service of a member of a task force
                    for purposes of section 3131(d)(2)(A) or 3132(d)(2)(A)
                    of the Public Health Service Act, as added by
                    subsection (a), the Secretary of Health and Human
                    Services shall not include any period of service by the
                    member on the Preventive Services Task Force or the
                    Task Force on Community Preventive Services,
                    respectively, as in existence on the day before the
                    date of the enactment of this Act.
        (c) Period Before Completion of National Strategy.--Pending
    completion of the national strategy under section 3121 of the Public
    Health Service Act, as added by subsection (a), the Secretary of Health
    and Human Services, acting through the relevant agency head, may make a
    judgment about how the strategy will address an issue and rely on such
    judgment in carrying out any provision of subtitle C, D, E, or F of
    title XXXI of such Act, as added by subsection (a), that requires the
    Secretary--
                (1) to take into consideration such strategy;
                (2) to conduct or support research or provide services in
            priority areas identified in such strategy; or
                (3) to take any other action in reliance on such strategy.
        (d) Conforming Amendments.--
                (1) Paragraph (61) of section 3(b) of the Indian Health
            Care Improvement Act (25 U.S.C. 1602) is amended by striking
            ``United States Preventive Services Task Force'' and inserting
            ``Task Force on Clinical Preventive Services''.
                (2) Section 126 of the Medicare, Medicaid, and SCHIP
            Benefits Improvement and Protection Act of 2000 (Appendix F of
            Public Law 106-554) is amended by striking ``United States
            Preventive Services Task Force'' each place it appears and
            inserting ``Task Force on Clinical Preventive Services''.
                (3) Paragraph (7) of section 317D of the Public Health
            Service Act (42 U.S.C. 247b-5) is amended by striking ``United
            States Preventive Services Task Force'' each place it appears
            and inserting ``Task Force on Clinical Preventive Services''.
                (4) Section 915 of the Public Health Service Act (42 U.S.C.
            299b-4) is amended by striking subsection (a).
                (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and
            (ddd)(1)(B) of section 1861 of the Social Security Act (42
            U.S.C. 1395x) are amended by striking ``United States
            Preventive Services Task Force'' each place it appears and
            inserting ``Task Force on Clinical Preventive Services''.

                       TITLE IV--QUALITY AND SURVEILLANCE

    SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH
                  CARE.

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

     ``PART D--IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH
                                      CARE

    ``SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

        ``(a) In General.--There is established the Center for Quality
    Improvement (referred to in this part as the `Center'), to be headed by
    the Director.
        ``(b) Prioritization.--
                ``(1) In general.--The Director shall prioritize areas for
            the identification, development, evaluation, and implementation
            of best practices (including innovative methodologies and
            strategies) for quality improvement activities in the delivery
            of health care services (in this section referred to as `best
            practices').
                ``(2) Considerations.--In prioritizing areas under
            paragraph (1), the Director shall consider--
                        ``(A) the priorities established under section 1191
                    of the Social Security Act; and
                        ``(B) the key health indicators identified by the
                    Assistant Secretary for Health Information under
                    section 1709.
        ``(c) Other Responsibilities.--The Director, acting directly or by
    awarding a grant or contract to an eligible entity, shall--
                ``(1) identify existing best practices under subsection
            (e);
                ``(2) develop new best practices under subsection (f);
                ``(3) evaluate best practices under subsection (g);
                ``(4) implement best practices under subsection (h);
                ``(5) ensure that best practices are identified, developed,
            evaluated, and implemented under this section consistent with
            standards adopted by the Secretary under section 3004 for
            health information technology used in the collection and
            reporting of quality information (including for purposes of the
            demonstration of meaningful use of certified electronic health
            record (EHR) technology by physicians and hospitals under the
            Medicare program (under sections 1848(o)(2) and 1886(n)(3),
            respectively, of the Social Security Act)); and
                ``(6) provide for dissemination of information and
            reporting under subsections (i) and (j).
        ``(d) Eligibility.--To be eligible for a grant or contract under
    subsection (c), an entity shall--
                ``(1) be a nonprofit entity;
                ``(2) agree to work with a variety of institutional health
            care providers, physicians, nurses, and other health care
            practitioners; and
                ``(3) if the entity is not the organization holding a
            contract under section 1153 of the Social Security Act for the
            area to be served, agree to cooperate with and avoid
            duplication of the activities of such organization.
        ``(e) Identifying Existing Best Practices.--The Secretary shall
    identify best practices that are--
                ``(1) currently utilized by health care providers
            (including hospitals, physician and other clinician practices,
            community cooperatives, and other health care entities) that
            deliver consistently high-quality, efficient health care
            services; and
                ``(2) easily adapted for use by other health care providers
            and for use across a variety of health care settings.
        ``(f) Developing New Best Practices.--The Secretary shall develop
    best practices that are--
                ``(1) based on a review of existing scientific evidence;
                ``(2) sufficiently detailed for implementation and
            incorporation into the workflow of health care providers; and
                ``(3) designed to be easily adapted for use by health care
            providers across a variety of health care settings.
        ``(g) Evaluation of Best Practices.--The Director shall evaluate
    best practices identified or developed under this section. Such
    evaluation--
                ``(1) shall include determinations of which best
            practices--
                        ``(A) most reliably and effectively achieve
                    significant progress in improving the quality of
                    patient care; and
                        ``(B) are easily adapted for use by health care
                    providers across a variety of health care settings;
                ``(2) shall include regular review, updating, and
            improvement of such best practices; and
                ``(3) may include in-depth case studies or empirical
            assessments of health care providers (including hospitals,
            physician and other clinician practices, community
            cooperatives, and other health care entities) and simulations
            of such best practices for determinations under paragraph (1).
        ``(h) Implementation of Best Practices.--
                ``(1) In general.--The Director shall enter into voluntary
            arrangements with health care providers (including hospitals
            and other health facilities and health practitioners) in a
            State or region to implement best practices identified or
            developed under this section. Such implementation--
                        ``(A) may include forming collaborative multi-
                    institutional teams; and
                        ``(B) shall include an evaluation of the best
                    practices being implemented, including the measurement
                    of patient outcomes before, during, and after
                    implementation of such best practices.
                ``(2) Preferences.--In carrying out this subsection, the
            Director shall give priority to health care providers
            implementing best practices that--
                        ``(A) have the greatest impact on patient outcomes
                    and satisfaction;
                        ``(B) are the most easily adapted for use by health
                    care providers across a variety of health care
                    settings;
                        ``(C) promote coordination of health care
                    practitioners across the continuum of care; and
                        ``(D) engage patients and their families in
                    improving patient care and outcomes.
        ``(i) Public Dissemination of Information.--The Director shall
    provide for the public dissemination of information with respect to
    best practices and activities under this section. Such information
    shall be made available in appropriate formats and languages to reflect
    the varying needs of consumers and diverse levels of health literacy.
        ``(j) Report.--
                ``(1) In general.--The Director shall submit an annual
            report to the Congress and the Secretary on activities under
            this section.
                ``(2) Content.--Each report under paragraph (1) shall
            include--
                        ``(A) information on activities conducted pursuant
                    to grants and contracts awarded;
                        ``(B) summary data on patient outcomes before,
                    during, and after implementation of best practices; and
                        ``(C) recommendations on the adaptability of best
                    practices for use by health providers.''.
        (b) Initial Quality Improvement Activities and Initiatives To Be
    Implemented.--Until the Director of the Agency for Healthcare Research
    and Quality has established initial priorities under section 931(b) of
    the Public Health Service Act, as added by subsection (a), the Director
    shall, for purposes of such section, prioritize the following:
                (1) Health care-associated infections.--Reducing health
            care-associated infections, including infections in nursing
            homes and outpatient settings.
                (2) Surgery.--Increasing hospital and outpatient
            perioperative patient safety, including reducing surgical-site
            infections and surgical errors (such as wrong-site surgery and
            retained foreign bodies).
                (3) Emergency room.--Improving care in hospital emergency
            rooms, including through the use of principles of efficiency of
            design and delivery to improve patient flow.
                (4) Obstetrics.--Improving the provision of obstetrical and
            neonatal care, including the identification of interventions
            that are effective in reducing the risk of preterm and
            premature labor and the implementation of best practices for
            labor and delivery care.

    SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

        (a) Establishment.--Title XVII (42 U.S.C. 300u et seq.) is
    amended--
                (1) by redesignating sections 1709 and 1710 as sections
            1710 and 1711, respectively; and
                (2) by inserting after section 1708 the following:

    ``SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

        ``(a) In General.--There is established within the Department an
    Assistant Secretary for Health Information (in this section referred to
    as the `Assistant Secretary'), to be appointed by the Secretary.
        ``(b) Responsibilities.--The Assistant Secretary shall--
                ``(1) ensure the collection, collation, reporting, and
            publishing of information (including full and complete
            statistics) on key health indicators regarding the Nation's
            health and the performance of the Nation's health care;
                ``(2) facilitate and coordinate the collection, collation,
            reporting, and publishing of information regarding the Nation's
            health and the performance of the Nation's health care (other
            than information described in paragraph (1));
                ``(3)(A) develop standards for the collection of data
            regarding the Nation's health and the performance of the
            Nation's health care; and
                ``(B) in carrying out subparagraph (A)--
                        ``(i) ensure appropriate specificity and
                    standardization for data collection at the national,
                    regional, State, and local levels;
                        ``(ii) include standards, as appropriate, for the
                    collection of accurate data on health and health care
                    by race, ethnicity, primary language, sex, sexual
                    orientation, gender identity, disability, socioeconomic
                    status, rural, urban, or other geographic setting, and
                    any other population or subpopulation determined
                    appropriate by the Secretary;
                        ``(iii) ensure, with respect to data on race and
                    ethnicity, consistency with the 1997 Office of
                    Management and Budget Standards for Maintaining,
                    Collecting and Presenting Federal Data on Race and
                    Ethnicity (or any successor standards); and
                        ``(iv) in consultation with the Director of the
                    Office of Minority Health, and the Director of the
                    Office of Civil Rights, of the Department, develop
                    standards for the collection of data on health and
                    health care with respect to data on primary language;
                ``(4) provide support to Federal departments and agencies
            whose programs have a significant impact upon health (as
            determined by the Secretary) for the collection and collation
            of information described in paragraphs (1) and (2);
                ``(5) ensure the sharing of information described in
            paragraphs (1) and (2) among the agencies of the Department;
                ``(6) facilitate the sharing of information described in
            paragraphs (1) and (2) by Federal departments and agencies
            whose programs have a significant impact upon health (as
            determined by the Secretary);
                ``(7) identify gaps in information described in paragraphs
            (1) and (2) and the appropriate agency or entity to address
            such gaps;
                ``(8) facilitate and coordinate identification and
            monitoring by the agencies of the Department of health
            disparities to inform program and policy efforts to reduce such
            disparities, including facilitating and funding analyses
            conducted in cooperation with the Social Security
            Administration, the Bureau of the Census, and other appropriate
            agencies and entities;
                ``(9) consistent with privacy, proprietary, and other
            appropriate safeguards, facilitate public accessibility of
            datasets (such as de-identified Medicare datasets or publicly
            available data on key health indicators) by means of the
            Internet; and
                ``(10) award grants or contracts for the collection and
            collation of information described in paragraphs (1) and (2)
            (including through statewide surveys that provide standardized
            information).
        ``(c) Key Health Indicators.--
                ``(1) In general.--In carrying out subsection (b)(1), the
            Assistant Secretary shall--
                        ``(A) identify, and reassess at least once every 3
                    years, key health indicators described in such
                    subsection;
                        ``(B) publish statistics on such key health
                    indicators for the public--
                                ``(i) not less than annually; and
                                ``(ii) on a supplemental basis whenever
                            warranted by--
                                        ``(I) the rate of change for a key
                                    health indicator; or
                                        ``(II) the need to inform policy
                                    regarding the Nation's health and the
                                    performance of the Nation's health
                                    care; and
                        ``(C) ensure consistency with the national strategy
                    developed by the Secretary under section 3121 and
                    consideration of the indicators specified in the
                    reports under sections 308, 903(a)(6), and 913(b)(2).
                ``(2) Release of key health indicators.--The regulations,
            rules, processes, and procedures of the Office of Management
            and Budget governing the review, release, and dissemination of
            key health indicators shall be the same as the regulations,
            rules, processes, and procedures of the Office of Management
            and Budget governing the review, release, and dissemination of
            Principal Federal Economic Indicators (or equivalent
            statistical data) by the Bureau of Labor Statistics.
        ``(d) Coordination.--In carrying out this section, the Assistant
    Secretary shall coordinate with--
                ``(1) public and private entities that collect and
            disseminate information on health and health care, including
            foundations; and
                ``(2) the head of the Office of the National Coordinator
            for Health Information Technology to ensure optimal use of
            health information technology.
        ``(e) Request for Information From Other Departments and
    Agencies.--Consistent with applicable law, the Assistant Secretary may
    secure directly from any Federal department or agency information
    necessary to enable the Assistant Secretary to carry out this section.
        ``(f) Report.--
                ``(1) Submission.--The Assistant Secretary shall submit to
            the Secretary and the Congress an annual report containing--
                        ``(A) a description of national, regional, or State
                    changes in health or health care, as reflected by the
                    key health indicators identified under subsection
                    (c)(1);
                        ``(B) a description of gaps in the collection,
                    collation, reporting, and publishing of information
                    regarding the Nation's health and the performance of
                    the Nation's health care;
                        ``(C) recommendations for addressing such gaps and
                    identification of the appropriate agency within the
                    Department or other entity to address such gaps;
                        ``(D) a description of analyses of health
                    disparities, including the results of completed
                    analyses, the status of ongoing longitudinal studies,
                    and proposed or planned research; and
                        ``(E) a plan for actions to be taken by the
                    Assistant Secretary to address gaps described in
                    subparagraph (B).
                ``(2) Consideration.--In preparing a report under paragraph
            (1), the Assistant Secretary shall take into consideration the
            findings and conclusions in the reports under sections 308,
            903(a)(6), and 913(b)(2).
        ``(g) Proprietary and Privacy Protections.--Nothing in this section
    shall be construed to affect applicable proprietary or privacy
    protections.
        ``(h) Consultation.--In carrying out this section, the Assistant
    Secretary shall consult with--
                ``(1) the heads of appropriate health agencies and offices
            in the Department, including the Office of the Surgeon General
            of the Public Health Service, the Office of Minority Health,
            and the Office on Women's Health; and
                ``(2) as appropriate, the heads of other Federal
            departments and agencies whose programs have a significant
            impact upon health (as determined by the Secretary).
        ``(i) Definition.--In this section:
                ``(1) The terms `agency' and `agencies' include an
            epidemiology center established under section 214 of the Indian
            Health Care Improvement Act.
                ``(2) The term `Department' means the Department of Health
            and Human Services.
                ``(3) The term `health disparities' has the meaning given
            to such term in section 3171.''.
        (b) Other Coordination Responsibilities.--Title III (42 U.S.C. 241
    et seq.) is amended--
                (1) in paragraphs (1) and (2) of section 304(c) (42 U.S.C.
            242b(c)), by inserting ``, acting through the Assistant
            Secretary for Health Information,'' after ``The Secretary''
            each place it appears; and
                (2) in section 306(j) (42 U.S.C. 242k(j)), by inserting ``,
            acting through the Assistant Secretary for Health
            Information,'' after ``of this section, the Secretary''.

    SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

        Section 799C, as added and amended, is further amended by adding at
    the end the following:
        ``(e) Quality and Surveillance.--For the purpose of carrying out
    part D of title IX and section 1709, in addition to any other amounts
    authorized to be appropriated for such purpose, there is authorized to
    be appropriated, out of any monies in the Public Health Investment
    Fund, $300,000,000 for each of fiscal years 2010 through 2014 and
    $330,000,000 for each of fiscal years 2015 through 2019.''.

                           TITLE V--OTHER PROVISIONS

            Subtitle A--Drug Discount for Rural and Other Hospitals

    SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

        (a) Expansion of Covered Entities Receiving Discounted Prices.--
    Section 340B(a)(4) (42 U.S.C. 256b(a)(4)) is amended by adding at the
    end the following:
                        ``(M) A children's hospital excluded from the
                    Medicare prospective payment system pursuant to section
                    1886(d)(1)(B)(iii) of the Social Security Act which
                    would meet the requirements of subparagraph (L),
                    including the disproportionate share adjustment
                    percentage requirement under subparagraph (L)(ii), if
                    the hospital were a subsection (d) hospital as defined
                    in section 1886(d)(1)(B) of the Social Security Act.
                        ``(N) An entity that is a critical access hospital
                    (as determined under section 1820(c)(2) of the Social
                    Security Act).
                        ``(O) An entity receiving funds under title V of
                    the Social Security Act (relating to maternal and child
                    health) for the provision of health services.
                        ``(P) An entity receiving funds under subpart I of
                    part B of title XIX of the Public Health Service Act
                    (relating to comprehensive mental health services) for
                    the provision of community mental health services.
                        ``(Q) An entity receiving funds under subpart II of
                    such part B (relating to the prevention and treatment
                    of substance abuse) for the provision of treatment
                    services for substance abuse.
                        ``(R) An entity that is a Medicare-dependent, small
                    rural hospital (as defined in section 1886(d)(5)(G)(iv)
                    of the Social Security Act).
                        ``(S) An entity that is a sole community hospital
                    (as defined in section 1886(d)(5)(D)(iii) of the Social
                    Security Act).
                        ``(T) An entity that is classified as a rural
                    referral center under section 1886(d)(5)(C) of the
                    Social Security Act.''.
        (b) Prohibition on Group Purchasing Arrangements.--Section 340B(a)
    (42 U.S.C. 256b(a)) is amended--
                (1) in paragraph (4)(L)--
                        (A) by adding ``and'' at the end of clause (i);
                        (B) by striking ``; and'' at the end of clause (ii)
                    and inserting a period; and
                        (C) by striking clause (iii);
                (2) in paragraph (5), by redesignating subparagraphs (C)
            and (D) as subparagraphs (D) and (E), respectively, and by
            inserting after subparagraph (B) the following:
                        ``(C) Prohibiting use of group purchasing
                    arrangements.--
                                ``(i) A hospital described in subparagraph
                            (L), (M), (N), (R), (S), or (T) of paragraph
                            (4) shall not obtain covered outpatient drugs
                            through a group purchasing organization or
                            other group purchasing arrangement, except as
                            permitted or provided pursuant to clause (ii).
                                ``(ii) The Secretary shall establish
                            reasonable exceptions to the requirement of
                            clause (i)--
                                        ``(I) with respect to a covered
                                    outpatient drug that is unavailable to
                                    be purchased through the program under
                                    this section due to a drug shortage
                                    problem, manufacturer noncompliance, or
                                    any other reason beyond the hospital's
                                    control;
                                        ``(II) to facilitate generic
                                    substitution when a generic covered
                                    outpatient drug is available at a lower
                                    price; and
                                        ``(III) to reduce in other ways the
                                    administrative burdens of managing both
                                    inventories of drugs obtained under
                                    this section and not under this
                                    section, if such exception does not
                                    create a duplicate discount problem in
                                    violation of subparagraph (A) or a
                                    diversion problem in violation of
                                    subparagraph (B).''.

    SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

        (a) In General.--Section 340B (42 U.S.C. 256b) is amended--
                (1) in subsection (b)--
                        (A) by striking ``In this section, the terms'' and
                    inserting the following: ``In this section:
                ``(1) In general.--The terms''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(2) Covered drug.--The term `covered drug'--
                        ``(A) means a covered outpatient drug (as defined
                    in section 1927(k)(2) of the Social Security Act); and
                        ``(B) includes, notwithstanding the section
                    1927(k)(3)(A) of such Act, a drug used in connection
                    with an inpatient or outpatient service provided by a
                    hospital described in subparagraph (L), (M), (N), (R),
                    (S), or (T) of subsection (a)(4) that is enrolled to
                    participate in the drug discount program under this
                    section.''; and
                (2) in paragraphs (5), (7), and (9) of subsection (a), by
            striking ``outpatient'' each place it appears.
        (b) Medicaid Credits on Inpatient Drugs.--Subsection (c) of section
    340B (42 U.S.C. 256b(c)) is amended to read as follows:
        ``(c) Medicaid Credits on Inpatient Drugs.--
                ``(1) In general.--For the cost reporting period covered by
            the most recently filed Medicare cost report under title XVIII
            of the Social Security Act, a hospital described in
            subparagraph (L), (M), (N), (R), (S), or (T) of subsection
            (a)(4) and enrolled to participate in the drug discount program
            under this section shall provide to each State under its plan
            under title XIX of such Act--
                        ``(A) a credit on the estimated annual costs to
                    such hospital of single source and innovator multiple
                    source drugs provided to Medicaid beneficiaries for
                    inpatient use; and
                        ``(B) a credit on the estimated annual costs to
                    such hospital of noninnovator multiple source drugs
                    provided to Medicaid beneficiaries for inpatient use.
                ``(2) Amount of credits.--
                        ``(A) Single source and innovator multiple source
                    drugs.--For purposes of paragraph (1)(A)--
                                ``(i) the credit under such paragraph shall
                            be equal to the product of--
                                        ``(I) the annual value of single
                                    source and innovator multiple source
                                    drugs purchased under this section by
                                    the hospital based on the drugs'
                                    average manufacturer price;
                                        ``(II) the estimated percentage of
                                    the hospital's drug purchases
                                    attributable to Medicaid beneficiaries
                                    for inpatient use; and
                                        ``(III) the minimum rebate
                                    percentage described in section
                                    1927(c)(1)(B) of the Social Security
                                    Act;
                                ``(ii) the reference in clause (i)(I) to
                            the annual value of single source and innovator
                            multiple source drugs purchased under this
                            section by the hospital based on the drugs'
                            average manufacturer price shall be equal to
                            the sum of--
                                        ``(I) the annual quantity of each
                                    single source and innovator multiple
                                    source drug purchased during the cost
                                    reporting period, multiplied by
                                        ``(II) the average manufacturer
                                    price for that drug;
                                ``(iii) the reference in clause (i)(II) to
                            the estimated percentage of the hospital's drug
                            purchases attributable to Medicaid
                            beneficiaries for inpatient use; shall be equal
                            to--
                                        ``(I) the Medicaid inpatient drug
                                    charges as reported on the hospital's
                                    most recently filed Medicare cost
                                    report, divided by
                                        ``(II) total drug charges reported
                                    on the cost report; and
                                ``(iv) the terms `single source drug' and
                            `innovator multiple source drug' have the
                            meanings given such terms in section 1927(k)(7)
                            of the Social Security Act.
                        ``(B) Noninnovator multiple source drugs.--For
                    purposes of paragraph (1)(B)--
                                ``(i) the credit under such paragraph shall
                            be equal to the product of--
                                        ``(I) the annual value of
                                    noninnovator multiple source drugs
                                    purchased under this section by the
                                    hospital based on the drugs' average
                                    manufacturer price;
                                        ``(II) the estimated percentage of
                                    the hospital's drug purchases
                                    attributable to Medicaid beneficiaries
                                    for inpatient use; and
                                        ``(III) the applicable percentage
                                    as defined in section 1927(c)(3)(B) of
                                    the Social Security Act;
                                ``(ii) the reference in clause (i)(I) to
                            the annual value of noninnovator multiple
                            source drugs purchased under this section by
                            the hospital based on the drugs' average
                            manufacturer price shall be equal to the sum
                            of--
                                        ``(I) the annual quantity of each
                                    noninnovator multiple source drug
                                    purchased during the cost reporting
                                    period, multiplied by
                                        ``(II) the average manufacturer
                                    price for that drug;
                                ``(iii) the reference in clause (i)(II) to
                            the estimated percentage of the hospital's drug
                            purchases attributable to Medicaid
                            beneficiaries for inpatient use shall be equal
                            to--
                                        ``(I) the Medicaid inpatient drug
                                    charges as reported on the hospital's
                                    most recently filed Medicare cost
                                    report, divided by
                                        ``(II) total drug charges reported
                                    on the cost report; and
                                ``(iv) the term `noninnovator multiple
                            source drug' has the meaning given such term in
                            section 1927(k)(7) of the Social Security Act.
                ``(3) Calculation of credits.--
                        ``(A) In general.--Each State calculates credits
                    under paragraph (1) and informs hospitals of amount
                    under section 1927(a)(5)(D) of the Social Security Act.
                        ``(B) Hospital provision of information.--Not later
                    than 30 days after the date of the filing of the
                    hospital's most recently filed Medicare cost report,
                    the hospital shall provide the State with the
                    information described in paragraphs (2)(A)(ii) and
                    (2)(B)(ii). With respect to each drug purchased during
                    the cost reporting period, the hospital shall provide
                    the dosage form, strength, package size, date of
                    purchase and the number of units purchased.
                ``(4) Payment deadline.--The credits provided by a hospital
            under paragraph (1) shall be paid within 60 days after
            receiving the information specified in paragraph (3)(A).
                ``(5) Opt out.--A hospital shall not be required to provide
            the Medicaid credit required under paragraph (1) if it can
            demonstrate to the State that it will lose reimbursement under
            the State plan resulting from the extension of discounts to
            inpatient drugs under subsection (b)(2) and that the loss of
            reimbursement will exceed the amount of the credit otherwise
            owed by the hospital.
                ``(6) Offset against medical assistance.--Amounts received
            by a State under this subsection in any quarter shall be
            considered to be a reduction in the amount expended under the
            State plan in the quarter for medical assistance for purposes
            of section 1903(a)(1) of the Social Security Act.''.
        (c) Conforming Amendments.--Section 1927 of the Social Security Act
    (42 U.S.C. 1396r-8) is amended--
                (1) in subsection (a)(5)(A), by striking ``covered
            outpatient drugs'' and inserting ``covered drugs (as defined in
            section 340B(b)(2) of the Public Health Service Act)'';
                (2) in subsection (a)(5), by striking subparagraph (D) and
            inserting the following:
                        ``(D) State responsibility for calculating hospital
                    credits.--The State shall calculate the credits owed by
                    the hospital under paragraph (1) of section 340B(c) of
                    the Public Health Service Act and provide the hospital
                    with both the amounts and an explanation of how it
                    calculated the credits. In performing the calculations
                    specified in paragraphs (2)(A)(ii) and (2)(B)(ii) of
                    such section, the State shall use the average
                    manufacturer price applicable to the calendar quarter
                    in which the drug was purchased by the hospital.''; and
                (3) in subsection (k)(1)--
                        (A) in subparagraph (A), by striking ``subparagraph
                    (B)'' and inserting ``subparagraphs (B) and (D)''; and
                        (B) by adding at the end the following:
                        ``(D) Calculation for covered drugs.--With respect
                    to a covered drug (as defined in section 340B(b)(2) of
                    the Public Health Service Act), the average
                    manufacturer price shall be determined in accordance
                    with subparagraph (A) except that, in the event a
                    covered drug is not distributed to the retail pharmacy
                    class of trade, it shall mean the average price paid to
                    the manufacturer for the drug in the United States by
                    wholesalers for drugs distributed to the acute care
                    class of trade, after deducting customary prompt pay
                    discounts.''.

    SEC. 2503. EFFECTIVE DATE.

        (a) In General.--The amendments made by this subtitle shall take
    effect on July 1, 2010, and shall apply to drugs dispensed on or after
    such date.
        (b) Effectiveness.--The amendments made by this subtitle shall be
    effective, and shall be taken into account in determining whether a
    manufacturer is deemed to meet the requirements of section 340B(a) of
    the Public Health Service Act (42 U.S.C. 256b(a)) and of section
    1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)),
    notwithstanding any other provision of law.

                    Subtitle B--School-Based Health Clinics

    SEC. 2511. SCHOOL-BASED HEALTH CLINICS.

        (a) In General.--Part Q of title III (42 U.S.C. 280h et seq.) is
    amended by adding at the end the following:

    ``SEC. 399Z-1. SCHOOL-BASED HEALTH CLINICS.

        ``(a) Program.--The Secretary shall establish a school-based health
    clinic program consisting of awarding grants to eligible entities to
    support the operation of school-based health clinics (referred to in
    this section as `SBHCs').
        ``(b) Eligibility.--To be eligible for a grant under this section,
    an entity shall--
                ``(1) be an SBHC (as defined in subsection (l)(4)); and
                ``(2) submit an application at such time, in such manner,
            and containing such information as the Secretary may require,
            including at a minimum--
                        ``(A) evidence that the applicant meets all
                    criteria necessary to be designated as an SBHC;
                        ``(B) evidence of local need for the services to be
                    provided by the SBHC;
                        ``(C) an assurance that--
                                ``(i) SBHC services will be provided in
                            accordance with Federal, State, and local laws
                            governing--
                                        ``(I) obtaining parental or
                                    guardian consent; and
                                        ``(II) patient privacy and student
                                    records, including section 264 of the
                                    Health Insurance Portability and
                                    Accountability Act of 1996 and section
                                    444 of the General Education Provisions
                                    Act;
                                ``(ii) the SBHC has established and
                            maintains collaborative relationships with
                            other health care providers in the catchment
                            area of the SBHC;
                                ``(iii) the SBHC will provide on-site
                            access during the academic day when school is
                            in session and has an established network of
                            support and access to services with backup
                            health providers when the school or SBHC is
                            closed;
                                ``(iv) the SBHC will be integrated into the
                            school environment and will coordinate health
                            services with appropriate school personnel and
                            other community providers co-located at the
                            school; and
                                ``(v) the SBHC sponsoring facility assumes
                            all responsibility for the SBHC administration,
                            operations, and oversight; and
                        ``(D) such other information as the Secretary may
                    require.
        ``(c) Use of Funds.--Funds awarded under a grant under this section
    may be used for--
                ``(1) providing training related to the provision of
            comprehensive primary health services and additional health
            services;
                ``(2) the management and operation of SBHC programs; and
                ``(3) the payment of salaries for health professionals and
            other appropriate SBHC personnel.
        ``(d) Consideration of Need.--In determining the amount of a grant
    under this section, the Secretary shall take into consideration--
                ``(1) the financial need of the SBHC;
                ``(2) State, local, or other sources of funding provided to
            the SBHC; and
                ``(3) other factors as determined appropriate by the
            Secretary.
        ``(e) Preferences.--In awarding grants under this section, the
    Secretary shall give preference to SBHCs that have a demonstrated
    record of service to the following:
                ``(1) A high percentage of medically underserved children
            and adolescents.
                ``(2) Communities or populations in which children and
            adolescents have difficulty accessing health and mental health
            services.
                ``(3) Communities with high percentages of children and
            adolescents who are uninsured, underinsured, or eligible for
            medical assistance under Federal or State health benefits
            programs (including titles XIX and XXI of the Social Security
            Act).
        ``(f) Matching Requirement.--The Secretary may award a grant to an
    SBHC only if the SBHC agrees to provide, from non-Federal sources, an
    amount equal to 20 percent of the amount of the grant (which may be
    provided in cash or in kind) to carry out the activities supported by
    the grant.
        ``(g) Supplement, Not Supplant.--The Secretary may award a grant to
    an SBHC under this section only if the SBHC demonstrates to the
    satisfaction of the Secretary that funds received through the grant
    will be expended only to supplement, and not supplant, non-Federal and
    Federal funds otherwise available to the SBHC for operation of the SBHC
    (including each activity described in paragraph (1) or (2) of
    subsection (c)).
        ``(h) Payor of Last Resort.--The Secretary may award a grant to an
    SBHC under this section only if the SBHC demonstrates to the
    satisfaction of the Secretary that funds received through the grant
    will not be expended for any activity to the extent that payment has
    been made, or can reasonably be expected to be made--
                ``(1) under any insurance policy;
                ``(2) under any Federal or State health benefits program
            (including titles XIX and XXI of the Social Security Act); or
                ``(3) by an entity which provides health services on a
            prepaid basis.
        ``(i) Regulations Regarding Reimbursement for Health Services.--The
    Secretary shall issue regulations regarding the reimbursement for
    health services provided by SBHCs to individuals eligible to receive
    such services through the program under this section, including
    reimbursement under any insurance policy or any Federal or State health
    benefits program (including titles XIX and XXI of the Social Security
    Act).
        ``(j) Technical Assistance.--The Secretary shall provide (either
    directly or by grant or contract) technical and other assistance to
    SBHCs to assist such SBHCs to meet the requirements of this section.
    Such assistance may include fiscal and program management assistance,
    training in fiscal and program management, operational and
    administrative support, and the provision of information to the SBHCs
    of the variety of resources available under this title and how those
    resources can be best used to meet the health needs of the communities
    served by the SBHCs.
        ``(k) Evaluation; Report.--The Secretary shall--
                ``(1) develop and implement a plan for evaluating SBHCs and
            monitoring quality performances under the awards made under
            this section; and
                ``(2) submit to the Congress on an annual basis a report on
            the program under this section.
        ``(l) Definitions.--In this section:
                ``(1) Comprehensive primary health services.--The term
            `comprehensive primary health services' means the core services
            offered by SBHCs, which shall include the following:
                        ``(A) Physical.--Comprehensive health assessments,
                    diagnosis, and treatment of minor, acute, and chronic
                    medical conditions and referrals to, and follow-up for,
                    specialty care.
                        ``(B) Mental health.--Mental health assessments,
                    crisis intervention, counseling, treatment, and
                    referral to a continuum of services including emergency
                    psychiatric care, community support programs, inpatient
                    care, and outpatient programs.
                        ``(C) Optional services.--Additional services,
                    which may include oral health, social, and age-
                    appropriate health education services, including
                    nutritional counseling.
                ``(2) Medically underserved children and adolescents.--The
            term `medically underserved children and adolescents' means a
            population of children and adolescents who are residents of an
            area designated by the Secretary as an area with a shortage of
            personal health services and health infrastructure for such
            children and adolescents.
                ``(3) School-based health clinic.--The term `school-based
            health clinic' means a health clinic that--
                        ``(A) is located in, or is adjacent to, a school
                    facility of a local educational agency;
                        ``(B) is organized through school, community, and
                    health provider relationships;
                        ``(C) is administered by a sponsoring facility; and
                        ``(D) provides, at a minimum, comprehensive primary
                    health services during school hours to children and
                    adolescents by health professionals in accordance with
                    State and local laws and regulations, established
                    standards, and community practice.
                ``(4) Sponsoring facility.--The term `sponsoring facility'
            is--
                        ``(A) a hospital;
                        ``(B) a public health department;
                        ``(C) a community health center;
                        ``(D) a nonprofit health care agency;
                        ``(E) a local educational agency; or
                        ``(F) a program administered by the Indian Health
                    Service or the Bureau of Indian Affairs or operated by
                    an Indian tribe or a tribal organization under the
                    Indian Self-Determination and Education Assistance Act,
                    a Native Hawaiian entity, or an urban Indian program
                    under title V of the Indian Health Care Improvement
                    Act.
        ``(m) Authorization of Appropriations.--For purposes of carrying
    out this section, there are authorized to be appropriated $50,000,000
    for fiscal year 2010 and such sums as may be necessary for each of the
    fiscal years 2011 through 2014.''.
        (b) Effective Date.--The Secretary of Health and Human Services
    shall begin awarding grants under section 399Z-1 of the Public Health
    Service Act, as added by subsection (b), not later than July 1, 2010,
    without regard to whether or not final regulations have been issued
    under section 399Z-1(h) of such Act.

                  Subtitle C--National Medical Device Registry

    SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY.

        (a) Registry.--
                (1) In general.--Section 519 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 360i) is amended--
                        (A) by redesignating subsection (g) as subsection
                    (h); and
                        (B) by inserting after subsection (f) the
                    following:

                       ``National Medical Device Registry

        ``(g)(1) The Secretary shall establish a national medical device
    registry (in this subsection referred to as the `registry') to
    facilitate analysis of postmarket safety and outcomes data on each
    device that--
                ``(A) is or has been used in or on a patient; and
                ``(B) is--
                        ``(i) a class III device; or
                        ``(ii) a class II device that is implantable, life-
                    supporting, or life-sustaining.
        ``(2) In developing the registry, the Secretary shall, in
    consultation with the Commissioner of Food and Drugs, the Administrator
    of the Centers for Medicare & Medicaid Services, the head of the Office
    of the National Coordinator for Health Information Technology, and the
    Secretary of Veterans Affairs, determine the best methods for--
                ``(A) including in the registry, in a manner consistent
            with subsection (f), appropriate information to identify each
            device described in paragraph (1) by type, model, and serial
            number or other unique identifier;
                ``(B) validating methods for analyzing patient safety and
            outcomes data from multiple sources and for linking such data
            with the information included in the registry as described in
            subparagraph (A), including, to the extent feasible, use of--
                        ``(i) data provided to the Secretary under other
                    provisions of this chapter; and
                        ``(ii) information from public and private sources
                    identified under paragraph (3);
                ``(C) integrating the activities described in this
            subsection with--
                        ``(i) activities under paragraph (3) of section
                    505(k) (relating to active postmarket risk
                    identification);
                        ``(ii) activities under paragraph (4) of section
                    505(k) (relating to advanced analysis of drug safety
                    data); and
                        ``(iii) other postmarket device surveillance
                    activities of the Secretary authorized by this chapter;
                    and
                ``(D) providing public access to the data and analysis
            collected or developed through the registry in a manner and
            form that protects patient privacy and proprietary information
            and is comprehensive, useful, and not misleading to patients,
            physicians, and scientists.
        ``(3)(A) To facilitate analyses of postmarket safety and patient
    outcomes for devices described in paragraph (1), the Secretary shall,
    in collaboration with public, academic, and private entities, develop
    methods to--
                        ``(i) obtain access to disparate sources of patient
                    safety and outcomes data, including--
                                ``(I) Federal health-related electronic
                            data (such as data from the Medicare program
                            under title XVIII of the Social Security Act or
                            from the health systems of the Department of
                            Veterans Affairs);
                                ``(II) private sector health-related
                            electronic data (such as pharmaceutical
                            purchase data and health insurance claims
                            data); and
                                ``(III) other data as the Secretary deems
                            necessary to permit postmarket assessment of
                            device safety and effectiveness; and
                        ``(ii) link data obtained under clause (i) with
                    information in the registry.
        ``(B) In this paragraph, the term `data' refers to information
    respecting a device described in paragraph (1), including claims data,
    patient survey data, standardized analytic files that allow for the
    pooling and analysis of data from disparate data environments,
    electronic health records, and any other data deemed appropriate by the
    Secretary.
        ``(4) Not later than 36 months after the date of the enactment of
    this subsection, the Secretary shall promulgate regulations for
    establishment and operation of the registry under paragraph (1). Such
    regulations--
                ``(A)(i) in the case of devices that are described in
            paragraph (1) and sold on or after the date of the enactment of
            this subsection, shall require manufacturers of such devices to
            submit information to the registry, including, for each such
            device, the type, model, and serial number or, if required
            under subsection (f), other unique device identifier; and
                ``(ii) in the case of devices that are described in
            paragraph (1) and sold before such date, may require
            manufacturers of such devices to submit such information to the
            registry, if deemed necessary by the Secretary to protect the
            public health;
                ``(B) shall establish procedures--
                        ``(i) to permit linkage of information submitted
                    pursuant to subparagraph (A) with patient safety and
                    outcomes data obtained under paragraph (3); and
                        ``(ii) to permit analyses of linked data;
                ``(C) may require device manufacturers to submit such other
            information as is necessary to facilitate postmarket
            assessments of device safety and effectiveness and notification
            of device risks;
                ``(D) shall establish requirements for regular and timely
            reports to the Secretary, which shall be included in the
            registry, concerning adverse event trends, adverse event
            patterns, incidence and prevalence of adverse events, and other
            information the Secretary determines appropriate, which may
            include data on comparative safety and outcomes trends; and
                ``(E) shall establish procedures to permit public access to
            the information in the registry in a manner and form that
            protects patient privacy and proprietary information and is
            comprehensive, useful, and not misleading to patients,
            physicians, and scientists.
        ``(5) To carry out this subsection, there are authorized to be
    appropriated such sums as may be necessary for fiscal years 2010 and
    2011.''.
                (2) Effective date.--The Secretary of Health and Human
            Services shall establish and begin implementation of the
            registry under section 519(g) of the Federal Food, Drug, and
            Cosmetic Act, as added by paragraph (1), by not later than the
            date that is 36 months after the date of the enactment of this
            Act, without regard to whether or not final regulations to
            establish and operate the registry have been promulgated by
            such date.
                (3) Conforming amendment.--Section 303(f)(1)(B)(ii) of the
            Federal Food, Drug, and Cosmetic Act (21 U.S.C.
            333(f)(1)(B)(ii)) is amended by striking ``519(g)'' and
            inserting ``519(h)''.
        (b) Electronic Exchange and Use in Certified Electronic Health
    Records of Unique Device Identifiers.--
                (1) Recommendations.--The HIT Policy Committee established
            under section 3002 of the Public Health Service Act (42 U.S.C.
            300jj-12) shall recommend to the head of the Office of the
            National Coordinator for Health Information Technology
            standards, implementation specifications, and certification
            criteria for the electronic exchange and use in certified
            electronic health records of a unique device identifier for
            each device described in section 519(g)(1) of the Federal Food,
            Drug, and Cosmetic Act, as added by subsection (a).
                (2) Standards, implementation criteria, and certification
            criteria.--The Secretary of the Health Human Services, acting
            through the head of the Office of the National Coordinator for
            Health Information Technology, shall adopt standards,
            implementation specifications, and certification criteria for
            the electronic exchange and use in certified electronic health
            records of a unique device identifier for each device described
            in paragraph (1), if such an identifier is required by section
            519(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
            360i(f)) for the device.

     Subtitle D--Grants for Comprehensive Programs to Provide Education to
                    Nurses and Create a Pipeline to Nursing

    SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.

        (a) Purposes.--It is the purpose of this section to authorize
    grants to--
                (1) address the projected shortage of nurses by funding
            comprehensive programs to create a career ladder to nursing
            (including Certified Nurse Assistants, Licensed Practical
            Nurses, Licensed Vocational Nurses, and Registered Nurses) for
            incumbent ancillary health care workers;
                (2) increase the capacity for educating nurses by
            increasing both nurse faculty and clinical opportunities
            through collaborative programs between staff nurse
            organizations, health care providers, and accredited schools of
            nursing; and
                (3) provide training programs through education and
            training organizations jointly administered by health care
            providers and health care labor organizations or other
            organizations representing staff nurses and frontline health
            care workers, working in collaboration with accredited schools
            of nursing and academic institutions.
        (b) Grants.--Not later than 6 months after the date of the
    enactment of this Act, the Secretary of Labor (referred to in this
    section as the ``Secretary'') shall establish a partnership grant
    program to award grants to eligible entities to carry out comprehensive
    programs to provide education to nurses and create a pipeline to
    nursing for incumbent ancillary health care workers who wish to advance
    their careers, and to otherwise carry out the purposes of this section.
        (c) Eligibility.--To be eligible for a grant under this section, an
    entity shall be--
                (1) a health care entity that is jointly administered by a
            health care employer and a labor union representing the health
            care employees of the employer and that carries out activities
            using labor management training funds as provided for under
            section 302(c)(6) of the Labor Management Relations Act, 1947
            (29 U.S.C. 186(c)(6));
                (2) an entity that operates a training program that is
            jointly administered by--
                        (A) one or more health care providers or
                    facilities, or a trade association of health care
                    providers; and
                        (B) one or more organizations which represent the
                    interests of direct care health care workers or staff
                    nurses and in which the direct care health care workers
                    or staff nurses have direct input as to the leadership
                    of the organization;
                (3) a State training partnership program that consists of
            nonprofit organizations that include equal participation from
            industry, including public or private employers, and labor
            organizations including joint labor-management training
            programs, and which may include representatives from local
            governments, worker investment agency one-stop career centers,
            community-based organizations, community colleges, and
            accredited schools of nursing; or
                (4) a school of nursing (as defined in section 801 of the
            Public Health Service Act (42 U.S.C. 296)).
        (d) Additional Requirements for Health Care Employer Described in
    Subsection (c).--To be eligible for a grant under this section, a
    health care employer described in subsection (c) shall demonstrate that
    it--
                (1) has an established program within their facility to
            encourage the retention of existing nurses;
                (2) provides wages and benefits to its nurses that are
            competitive for its market or that have been collectively
            bargained with a labor organization; and
                (3) supports programs funded under this section through 1
            or more of the following:
                        (A) The provision of paid leave time and continued
                    health coverage to incumbent health care workers to
                    allow their participation in nursing career ladder
                    programs, including certified nurse assistants,
                    licensed practical nurses, licensed vocational nurses,
                    and registered nurses.
                        (B) Contributions to a joint labor-management
                    training fund which administers the program involved.
                        (C) The provision of paid release time, incentive
                    compensation, or continued health coverage to staff
                    nurses who desire to work full- or part-time in a
                    faculty position.
                        (D) The provision of paid release time for staff
                    nurses to enable them to obtain a bachelor of science
                    in nursing degree, other advanced nursing degrees,
                    specialty training, or certification program.
                        (E) The payment of tuition assistance which is
                    managed by a joint labor-management training fund or
                    other jointly administered program.
        (e) Other Requirements.--
                (1) Matching requirement.--
                        (A) In general.--The Secretary may not make a grant
                    under this section unless the applicant involved
                    agrees, with respect to the costs to be incurred by the
                    applicant in carrying out the program under the grant,
                    to make available non-Federal contributions (in cash or
                    in kind under subparagraph (B)) toward such costs in an
                    amount equal to not less than $1 for each $1 of Federal
                    funds provided in the grant. Such contributions may be
                    made directly or through donations from public or
                    private entities, or may be provided through the cash
                    equivalent of paid release time provided to incumbent
                    worker students.
                        (B) Determination of amount of non-federal
                    contribution.--Non-Federal contributions required in
                    subparagraph (A) may be in cash or in kind (including
                    paid release time), fairly evaluated, including
                    equipment or services (and excluding indirect or
                    overhead costs). Amounts provided by the Federal
                    Government, or services assisted or subsidized to any
                    significant extent by the Federal Government, may not
                    be included in determining the amount of such non-
                    Federal contributions.
                (2) Required collaboration.--Entities carrying out or
            overseeing programs carried out with assistance provided under
            this section shall demonstrate collaboration with accredited
            schools of nursing which may include community colleges and
            other academic institutions providing associate, bachelor's, or
            advanced nursing degree programs or specialty training or
            certification programs.
        (f) Use of Funds.--Amounts awarded to an entity under a grant under
    this section shall be used for the following:
                (1) To carry out programs that provide education and
            training to establish nursing career ladders to educate
            incumbent health care workers to become nurses (including
            certified nurse assistants, licensed practical nurses, licensed
            vocational nurses, and registered nurses). Such programs shall
            include one or more of the following:
                        (A) Preparing incumbent workers to return to the
                    classroom through English -as-a-second language
                    education, GED education, pre-college counseling,
                    college preparation classes, and support with entry
                    level college classes that are a prerequisite to
                    nursing.
                        (B) Providing tuition assistance with preference
                    for dedicated cohort classes in community colleges,
                    universities, accredited schools of nursing with
                    supportive services including tutoring and counseling.
                        (C) Providing assistance in preparing for and
                    meeting all nursing licensure tests and requirements.
                        (D) Carrying out orientation and mentorship
                    programs that assist newly graduated nurses in
                    adjusting to working at the bedside to ensure their
                    retention postgraduation, and ongoing programs to
                    support nurse retention.
                        (E) Providing stipends for release time and
                    continued health care coverage to enable incumbent
                    health care workers to participate in these programs.
                (2) To carry out programs that assist nurses in obtaining
            advanced degrees and completing specialty training or
            certification programs and to establish incentives for nurses
            to assume nurse faculty positions on a part-time or full-time
            basis. Such programs shall include one or more of the
            following:
                        (A) Increasing the pool of nurses with advanced
                    degrees who are interested in teaching by funding
                    programs that enable incumbent nurses to return to
                    school.
                        (B) Establishing incentives for advanced degree
                    bedside nurses who wish to teach in nursing programs so
                    they can obtain a leave from their bedside position to
                    assume a full- or part-time position as adjunct or
                    full-time faculty without the loss of salary or
                    benefits.
                        (C) Collaboration with accredited schools of
                    nursing which may include community colleges and other
                    academic institutions providing associate, bachelor's,
                    or advanced nursing degree programs, or specialty
                    training or certification programs, for nurses to carry
                    out innovative nursing programs which meet the needs of
                    bedside nursing and health care providers.
        (g) Preference.--In awarding grants under this section the
    Secretary shall give preference to programs that--
                (1) provide for improving nurse retention;
                (2) provide for improving the diversity of the new nurse
            graduates to reflect changes in the demographics of the patient
            population;
                (3) provide for improving the quality of nursing education
            to improve patient care and safety;
                (4) have demonstrated success in upgrading incumbent health
            care workers to become nurses or which have established
            effective programs or pilots to increase nurse faculty; or
                (5) are modeled after or affiliated with such programs
            described in paragraph (4).
        (h) Evaluation.--
                (1) Program evaluations.--An entity that receives a grant
            under this section shall annually evaluate, and submit to the
            Secretary a report on, the activities carried out under the
            grant and the outcomes of such activities. Such outcomes may
            include--
                        (A) an increased number of incumbent workers
                    entering an accredited school of nursing and in the
                    pipeline for nursing programs;
                        (B) an increasing number of graduating nurses and
                    improved nurse graduation and licensure rates;
                        (C) improved nurse retention;
                        (D) an increase in the number of staff nurses at
                    the health care facility involved;
                        (E) an increase in the number of nurses with
                    advanced degrees in nursing;
                        (F) an increase in the number of nurse faculty;
                        (G) improved measures of patient quality (which may
                    include staffing ratios of nurses, patient satisfaction
                    rates, patient safety measures); and
                        (H) an increase in the diversity of new nurse
                    graduates relative to the patient population.
                (2) General report.--Not later than 2 years after the date
            of the enactment of this Act, and annually thereafter, the
            Secretary of Labor shall, using data and information from the
            reports received under paragraph (1), submit to the Congress a
            report concerning the overall effectiveness of the grant
            program carried out under this section.
        (i) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary.

     Subtitle E--States Failing To Adhere to Certain Employment Obligations

    SEC. 2541. LIMITATION ON FEDERAL FUNDS.

        A State is eligible for Federal funds under the provisions of the
    Public Health Service Act (42 U.S.C. 201 et seq.) only if the State--
                (1) agrees to be subject in its capacity as an employer to
            each obligation under subdivision A of this division and the
            amendments made by such subdivision applicable to persons in
            their capacity as an employer; and
                (2) assures that all political subdivisions in the State
            will do the same.

       Subtitle F--Standards for Accessibility to Medical Equipment for
                         Individuals With Disabilities.

    SEC. 2541. ACCESS FOR INDIVIDUALS WITH DISABILITIES.

        Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.)
    is amended by adding at the end of the following:

    ``SEC. 510. STANDARDS FOR ACCESSIBILITY OF MEDICAL DIAGNOSTIC
                  EQUIPMENT.

        ``(a) Standards.--Not later than 9 months after the date of
    enactment of the America's Affordable Health Choices Act of 2009, the
    Architectural and Transportation Barriers Compliance Board shall issue
    guidelines setting forth the minimum technical criteria for medical
    diagnostic equipment used in (or in conjunction with) physician's
    offices, clinics, emergency rooms, hospitals, and other medical
    settings. The guidelines shall ensure that such equipment is accessible
    to, and usable by, individuals with disabilities, including provisions
    to ensure independent entry to, use of, and exit from the equipment by
    such individuals to the maximum extent possible.
        ``(b) Medical Diagnostic Equipment Covered.--The guidelines issued
    under subsection (a) for medical diagnostic equipment shall apply to
    equipment that includes examination tables, examination chairs
    (including chairs used for eye examinations or procedures, and dental
    examinations or procedures), weight scales, mammography equipment, x-
    ray machines, and other equipment commonly used for diagnostic or
    examination purposes by health professionals.
        ``(c) Interim Standards.--Until the date on which final regulations
    are issued under subsection (d), purchases of examination tables,
    weight scales, and mammography equipment and used in (or in conjunction
    with) medical settings described in subsection (a), shall adhere to the
    following interim accessibility requirements:
                ``(1) Examination tables shall be height-adjustable between
            a range of at least 18 inches to 37 inches.
                ``(2) Weight scales shall be capable of weighing
            individuals who remain seated in a wheelchair or other personal
            mobility aid.
                ``(3) Mammography machines and equipment shall be capable
            of being used by individuals in a standing, seated, or
            recumbent position, including individuals who remain seated in
            a wheelchair or other personal mobility aid.
        ``(d) Regulations.--Not later than 6 months after the date of the
    issuance of the guidelines under subsection (a), each appropriate
    Federal agency authorized to promulgate regulations under this Act or
    under the Americans with Disabilities Act shall--
                ``(1) prescribe regulations in an accessible format as
            necessary to carry out the provisions of such Act and section
            504 of this Act that include accessibility standards that are
            consistent with the guidelines issued under subsection (a); and
                ``(2) ensure that health care providers and health care
            plans covered by the America's Affordable Health Choices Act of
            2009 meet the requirements of the Americans with Disabilities
            Act and section 504, including provisions ensuring that
            individuals with disabilities receive equal access to all
            aspects of the health care delivery system.
        ``(e) Review and Amend.--The Architectural and Transportation
    Barriers Compliance Board shall periodically review and, as
    appropriate, amend the guidelines as prescribed under subsection (a).
    Not later than 6 months after the date of the issuance of such revised
    guidelines, revised regulations consistent with such guidelines shall
    be promulgated in an accessible format by the appropriate Federal
    agencies described in subsection (d).''.

                        Subtitle G--Other Grant Programs

    SEC. 2551. REDUCING STUDENT-TO-SCHOOL NURSE RATIOS.

        (a) Demonstration Grants.--
                (1) In general.--The Secretary of Education, in
            consultation with the Secretary of Health and Human Services
            and the Director of the Centers for Disease Control and
            Prevention, may make demonstration grants to eligible local
            education agencies for the purpose of reducing the student-to-
            school nurse ratio in public elementary and secondary schools.
                (2) Special consideration.--In awarding grants under this
            section, the Secretary of Education shall give special
            consideration to applications submitted by high-need local
            educational agencies that demonstrate the greatest need for new
            or additional nursing services among children in the public
            elementary and secondary schools served by the agency, in part
            by providing information on current ratios of students to
            school nurses.
                (3) Matching funds.--The Secretary of Education may require
            recipients of grants under this subsection to provide matching
            funds from non-Federal sources, and shall permit the recipients
            to match funds in whole or in part with in-kind contributions.
        (b) Report.--Not later than 24 months after the date on which
    assistance is first made available to local educational agencies under
    this section, the Secretary of Education shall submit to the Congress a
    report on the results of the demonstration grant program carried out
    under this section, including an evaluation of the effectiveness of the
    program in improving the student-to-school nurse ratios described in
    subsection (a) and an evaluation of the impact of any resulting
    enhanced health of students on learning.
        (c) Definitions.--For purposes of this section:
                (1) The terms ``elementary school'', ``local educational
            agency'', and ``secondary school'' have the meanings given to
            those terms in section 9101 of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 7801).
                (2) The term ``eligible local educational agency'' means a
            local educational agency in which the student-to-school nurse
            ratio in the public elementary and secondary schools served by
            the agency is 750 or more students to every school nurse.
                (3) The term ``high-need local educational agency'' means a
            local educational agency--
                        (A) that serves not fewer than 10,000 children from
                    families with incomes below the poverty line; or
                        (B) for which not less than 20 percent of the
                    children served by the agency are from families with
                    incomes below the poverty line.
                (4) The term ``nurse'' means a licensed nurse, as defined
            under State law.
        (d) Authorization of Appropriations.--To carry out this section,
    there are authorized to be appropriated such sums as may be necessary
    for each of the fiscal years 2010 through 2014.

    SEC. 2552. WELLNESS PROGRAM GRANTS.

        (a) Allowance of Grant.--
                (1) In general.--For purposes of this section, the
            Secretary of Labor shall award wellness grants as determined
            under this section. Wellness program grants shall be awarded to
            qualified employers for any plan year in an amount equal to 50
            percent of the costs paid or incurred by the employer in
            connection with a qualified wellness program during the plan
            year. For purposes of the preceding sentence, in the case of
            any qualified wellness program offered as part of an
            employment-based health plan, only costs attributable to the
            qualified wellness program and not to the health plan, or
            health insurance coverage offered in connection with such a
            plan, may be taken into account.
                (2) Limitation.--The amount of the grant allowed under
            paragraph (1) for any plan year shall not exceed the sum of--
                        (A) the product of $200 and the number of employees
                    of the employer not in excess of 200 employees; plus
                        (B) the product of $100 and the number of employees
                    of the employer in excess of 200 employees.
            The wellness grants awarded to an employer under this section
            shall be for up to 3 years and shall not exceed $50,000.
        (b) Qualified Wellness Program.--For purposes of this section:
                (1) Qualified wellness program.--The term ``qualified
            wellness program'' means a program that --
                        (A) includes any 3 wellness components described in
                    subsection (c); and
                        (B) is be certified by the Secretary of Labor, in
                    coordination with the Health Choices Commissioner and
                    the Director of the Center for Disease Control and
                    Prevention, as a qualified wellness program under this
                    section.
                (2) Programs must be consistent with research and best
            practices.--
                        (A) In general.--The Secretary of Labor shall not
                    certify a program as a qualified wellness program
                    unless the program--
                                (i) is newly established or in existence on
                            the date of enactment of this Act but not yet
                            meeting the requirements of this section;
                                (ii) is consistent with evidenced-based
                            researched and best practices, as identified by
                            persons with expertise in employer health
                            promotion and wellness programs;
                                (iii) includes multiple, evidenced-based
                            strategies which are based on the existing and
                            emerging research and careful scientific
                            reviews, including the Guide to Community
                            Preventative Services, the Guide to Clinical
                            Preventative Services, and the National
                            Registry for Effective Programs, and
                                (iv) includes strategies which focus on
                            prevention and support for employee populations
                            at risk of poor health outcomes.
                        (B) Periodic updating and review.--The Secretary of
                    Labor, in consultation with other appropriate agencies
                    shall establish procedures for periodic review,
                    evaluation, and update of the programs under this
                    subsection.
                (3) Health literacy/accessibility.--The Secretary of Labor
            shall, as part of the certification process:--
                        (A) ensure that employers make the programs
                    culturally competent. physically and programmatically
                    accessible (including for individuals with
                    disabilities), and appropriate to the health literacy
                    needs of the employees covered by the programs;
                        (B) require a health literacy component to provide
                    special assistance and materials to employees with low
                    literacy skills, limited English and from under-served
                    populations; and
                        (C) require the Secretary of Labor, in consultation
                    with Secretary of Health and Human Services, to compile
                    and disseminate to employer health plans info on model
                    health literacy curricula, instructional programs, and
                    effective intervention strategies.
        (c) Wellness Program Components.--For purposes of this section, the
    wellness program components described in this subsection are the
    following:
                (1) Health awareness component.--A health awareness
            component which provides for the following:
                        (A) Health education.--The dissemination of health
                    information which addresses the specific needs and
                    health risks of employees.
                        (B) Health screenings.--The opportunity for
                    periodic screenings for health problems and referrals
                    for appropriate follow up measures.
                (2) Employee engagement component.--An employee engagement
            component which provides for the active engagement of employees
            in worksite wellness programs through worksite assessments and
            program planning, onsite delivery, evaluation, and improvement
            efforts.
                (3) Behavioral change component.--A behavioral change
            component which provides for altering employee lifestyles to
            encourage healthy living through counseling, seminars, on-line
            programs, or self-help materials which provide technical
            assistance and problem solving skills. such component may
            include programs relating to--
                        (A) tobacco use;
                        (B) obesity;
                        (C) stress management;
                        (D) physical fitness;
                        (E) nutrition;
                        (F) substance abuse;
                        (G) depression; and
                        (H) mental health promotion (including anxiety).
                (4) Supportive environment component.--A supportive
            environment component which includes the following:
                        (A) On-site policies.--Policies and services at the
                    worksite which promote a healthy lifestyle, including
                    policies relating to--
                                (i) tobacco use at the worksite;
                                (ii) the nutrition of food available at the
                            worksite through cafeterias and vending
                            options;
                                (iii) minimizing stress and promoting
                            positive mental health in the workplace; and
                                (iv) the encouragement of physical activity
                            before, during, and after work hours.
        (d) Participation Requirement.--No grant shall be allowed under
    subsection (a) unless the Secretary of Labor in consultation with other
    appropriate agencies, certifies, as a part of any certification
    described in subsection (b), that each wellness program component of
    the qualified wellness program--
                (1) shall be available to all employees of the employer;
                (2) shall not mandate participation by employees; and
                (3) shall not require participation by individual employees
            as a condition to obtain a premium discount, rebate, deductible
            reduction, or other financial reward.
        (e) Privacy Protections.--Any employee health information collected
    through participation in an employer wellness program shall be
    confidential and available only to appropriately trained health
    professions as defined by the Secretary of Labor. Employers or
    employees of the employer sponsoring a wellness program shall have no
    access to employee health data. All entities offering employer-
    sponsored wellness programs shall be considered ``business associates''
    pursuant to the American Reinvestment and Recovery Act and must comply
    with privacy protections restricting the release of personal medical
    information.
        (f) Definitions and Special Rules.--For purposes of this section:
                (1) Qualified employer.--The term ``qualified employer''
            means an employer that offers a qualified health benefits plan
            to every employee (including each employee required to be
            offered coverage under a qualified health benefits plan under
            subtitle B of title III of subdivision A), and meets the health
            coverage participation requirements as defined in section 312.
                (2) Certain costs not included.--Costs paid or incurred by
            an employer for food or health insurance shall not be taken
            into account under subsection (a).
        (g) Outreach.--
                (1) In general.--The Secretary of the Labor, in conjunction
            with other appropriate agencies and members of the business
            community, shall institute an outreach program to inform
            businesses about the availability of the wellness program grant
            as well as to educate businesses on how to develop programs
            according to recognized and promising practices and on how to
            measure the success of implemented programs.
        (h) Effective Date.--This section shall take effect on January 1,
    2013.
        (i) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.

    SEC. 2553. HEALTH PROFESSIONS TRAINING FOR DIVERSITY PROGRAMS.

        Section 171 of the Workforce Investment Act of 1998 (29 U.S.C.
    2916) is amended by adding at the end the following:
        ``(f) Health Professions Training for Diversity Program.--
                ``(1) In general.--The Secretary shall make available 20
            grants of no more than $1,000,000 annually to nonprofit
            organizations for the purposes of providing workforce
            development training program for those who are currently
            employed in the health care workforce.
                ``(2) Eligibility.--For the purposes of providing
            assistance and services under the program established in this
            subsection, grants are to be awarded to Area Health Education
            Centers or similar nonprofit organizations involved in the
            development and implementation of health care workforce
            development programs and that--
                        ``(A) have a formal affiliation with a hospital or
                    community health center, and institution of higher
                    education as defined by section 101 of the Higher
                    Education Act of 1965;
                        ``(B) have a history of providing program services
                    to minority populations; and
                        ``(C) provide workforce development programs to
                    low-income persons, veterans, or urban and rural
                    underserved communities.''.

            Subtitle H--Long-term Care and Family Caregiver Support

    SEC. 2561. LONG-TERM CARE AND FAMILY CAREGIVER SUPPORT.

        (a) Amendments to the Older Americans Act of 1965.--
                (1) Promotion of direct care workforce.--Section 202(b)(1)
            of the Older Americans Act of 1965 (42 U.S.C. 3012(b)(1)) is
            amended by inserting before the semicolon the following: ``,
            and, in carrying out the purposes of this paragraph, shall make
            recommendations to other Federal entities regarding appropriate
            and effective means of identifying, promoting, and implementing
            investments in the direct care workforce necessary to meet the
            growing demand for long-term health services and supports and
            assisting States in developing a comprehensive state workforce
            development plans with respect to such workforce including
            efforts to systematically assess, track, and report on
            workforce adequacy and capacity''.
                (2) Personal care attendant workforce advisory panel.--
            Section 202 of such Act (42 U.S.C. 3012) is amended by adding
            at the end the following new subsection:
        ``(g)(1) The Assistant Secretary shall establish a Personal Care
    Attendant Workforce Advisory Panel and pilot program to improve working
    conditions and training for long term care workers, including home
    health aides, certified nurse aides, and personal care attendants.
        ``(2) The Panel shall include representatives from--
                ``(A) relevant health care agencies and facilities
            (including personal or home care agencies, home health care
            agencies, nursing homes and residential care facilities);
                ``(B) the disability community;
                ``(C) the nursing community;
                ``(D) direct care workers (which may include unions and
            national organizations);
                ``(E) older individuals and family caregivers;
                ``(F) State and federal health care entities; and
                ``(G) experts in workforce development and adult learning.
        ``(3) Within one year after the establishment of the Panel, the
    Panel shall submit a report to the Assistant Secretary articulating
    core competencies for eligible personal or home care aides necessary to
    successfully provide long-term services and supports to eligible
    consumers, as well as recommended training curricula and resources.
        ``(4) Within 180 days after receipt by the Assistant Secretary of
    the report under paragraph (3), the Assistant Secretary shall establish
    a 3-year demonstration program in 4 states to pilot and evaluate the
    effectiveness of the competencies articulated by the Panel and the
    training curricula and training methods recommended by the Panel.
        ``(5) Not later than 1 year after the completion of the
    demonstration program under paragraph (4), the Assistant Secretary
    shall submit to each House of the Congress a report containing the
    results of the evaluations by the Assistant Secretary pursuant to
    paragraph (4), together with such recommendations for legislation or
    administrative action as the Assistant Secretary determines
    appropriate.''.
        (b) Authorization of Additional Appropriations for the Family
    Caregiver Support Program Under the Older Americans Act of 1965.--
    Section 303(e)(2) of the Older Americans Act of 1965 (42 U.S.C.
    3023(e)(2)) is amended by striking ``$173,000,000'' and all that
    follows through ``2011'', and inserting ``and $250,000,000 for each of
    the fiscal years 2010, 2011, and 2012''.
        (c) Authorization of Additional Appropriations for the National
    Clearinghouse for Long-Term Care Information.--There is authorized to
    be appropriated $10,000,000 for each of the fiscal years 2010, 2011,
    and 2012 for the operation of the National Clearinghouse for Long-Term
    Care Information established by the Secretary of Health and Human
    Services under section 6021(d) of Public Law 109-171.

                          Subtitle I--Online Resources

    SEC. 2571. WEB SITE ON HEALTH CARE LABOR MARKET AND RELATED EDUCATIONAL
                  AND TRAINING OPPORTUNITIES.

        (a) In General.--The Secretary of Labor, in consultation with the
    National Center for Health Workforce Analysis, shall establish and
    maintain a Web site to serve as a comprehensive source of information,
    searchable by workforce region, on the health care labor market and
    related educational and training opportunities.
        (b) Contents.--The Web site maintained under this section shall
    include the following:
                (1) Information on the types of jobs that are currently or
            are projected to be in high demand in the health care field,
            including--
                        (A) salary information; and
                        (B) training requirements, such as requirements for
                    educational credentials, licensure, or certification.
                (2) Information on training and educational opportunities
            within each region for the type jobs described in paragraph
            (1), including by--
                        (A) type of provider or program (such as public,
                    private nonprofit, or private for-profit);
                        (B) duration;
                        (C) cost (such as tuition, fees, books, laboratory
                    expenses, and other mandatory costs);
                        (D) performance outcomes (such as graduation rates,
                    job placement, average salary, job retention, and wage
                    progression);
                        (E) Federal financial aid participation;
                        (F) average graduate loan debt;
                        (G) student loan default rates;
                        (H) average institutional grant aid provided;
                        (I) Federal and State accreditation information;
                    and
                        (J) other information determined by the Secretary.
                (3) A mechanism for searching and comparing training and
            educational options for specific health care occupations to
            facilitate informed career and education choices.
                (4) Financial aid information, including with respect to
            loan forgiveness, loan cancellation, loan repayment, stipends,
            scholarships, and grants or other assistance authorized by this
            division or other Federal or State programs.
        (c) Public Accessibility.--The Web site maintained under this
    section shall--
                (1) be publicly accessible;
                (2) be user friendly and convey information in a manner
            that is easily understandable; and
                (3) be in English and the second most prevalent language
            spoken based on the latest Census information.

    SEC. 2572. ONLINE HEALTH WORKFORCE TRAINING PROGRAMS.

        Section 171 of the Workforce Investment Act of 1998 (29 U.S.C.
    2916) (as amended by section 2553) is further amended by adding at the
    end the following:
        ``(g) Online Health Workforce Training Program.--
                ``(1) Grant program.--
                        ``(A) In general.--The Secretary shall award
                    National Health Workforce Online Training Grants on a
                    competitive basis to eligible entities to enable such
                    entities to carry out training for individuals to
                    attain or advance in health care occupations. An entity
                    may leverage such grant with other Federal, State,
                    local, and private resources, in order to expand the
                    participation of businesses, employees, and individuals
                    in such training programs.
                        ``(B) Eligibility.--In order to receive a grant
                    under the program established under this paragraph--
                                ``(i) an entity shall be an educational
                            institution, community-based organization, non-
                            profit organization, workforce investment
                            board, or local or county government; and
                                ``(ii) an entity shall provide online
                            workforce training for individuals seeking to
                            attain or advance in health care occupations,
                            including nursing, nursing assistants,
                            dentistry, pharmacy, health care management and
                            administration, public health, health
                            information systems analysis, medical
                            assistants, and other health care practitioner
                            and support occupations.
                        ``(C) Priority.--Priority in awarding grants under
                    this paragraph shall be given to entities that--
                                ``(i) have demonstrated experience in
                            implementing and operating online worker skills
                            training and education programs;
                                ``(ii) have demonstrated experience
                            coordinating activities, where appropriate,
                            with the workforce investment system; and
                                ``(iii) conduct training for occupations
                            with national or local shortages.
                        ``(D) Data collection.--Grantees under this
                    paragraph shall collect and report information on--
                                ``(i) the number of participants;
                                ``(ii) the services received by the
                            participants;
                                ``(iii) program completion rates;
                                ``(iv) factors determined as significantly
                            interfering with program participation or
                            completion;
                                ``(v) the rate of job placement; and
                                ``(vi) other information as determined as
                            needed by the Secretary.
                        ``(E) Outreach.--Grantees under this paragraph
                    shall conduct outreach activities to disseminate
                    information about their program and results to
                    workforce investment boards, local governments,
                    educational institutions, and other workforce training
                    organizations.
                        ``(F) Performance levels.--The Secretary shall
                    establish indicators of performance that will be used
                    to evaluate the performance of grantees under this
                    paragraph in carrying out the activities described in
                    this paragraph. The Secretary shall negotiate and reach
                    agreement with each grantee regarding the levels of
                    performance expected to be achieved by the grantee on
                    the indicators of performance.
                        ``(G) Authorization of appropriations.--There are
                    authorized to be appropriated to the Secretary to carry
                    out this subsection $50,000,000 for fiscal years 2011
                    through 2020.
                ``(2) Online health professions training program
            clearinghouse.--
                        ``(A) Description of grant.--The Secretary shall
                    award one grant to an eligible postsecondary
                    educational institution to provide the services
                    described in this paragraph.
                        ``(B) Eligibility.--To be eligible to receive a
                    grant under this paragraph, a postsecondary educational
                    institution shall--
                                ``(i) have demonstrated the ability to
                            disseminate research on best practices for
                            implementing workforce investment programs; and
                                ``(ii) be a national leader in producing
                            cutting-edge research on technology related to
                            workforce investment systems under subtitle B.
                        ``(C) Services.--The postsecondary educational
                    institution that receives a grant under this paragraph
                    shall use such grant--
                                ``(i) to provide technical assistance to
                            entities that receive grants under paragraph
                            (1);
                                ``(ii) to collect and nationally
                            disseminate the data gathered by entities that
                            receive grants under paragraph (1); and
                                ``(iii) to disseminate the best practices
                            identified by the National Health Workforce
                            Online Training Grant Program to other
                            workforce training organizations.
                        ``(D) Authorization of appropriations.--There are
                    authorized to be appropriated to the Secretary to carry
                    out this subsection $1,000,000 for fiscal years 2011
                    through 2020.''.

      DIVISION III--HOUSE COMMITTEE ON EDUCATION AND LABOR: INVESTING IN
                                   EDUCATION

    SECTION 1. SHORT TITLE.

        This division may be cited as the ``Student Aid and Fiscal
    Responsibility Act of 2009''.

    SEC. 2. TABLE OF CONTENTS.

        The table of contents is as follows:

    Sec. 1. Short title.
    Sec. 2. Table of contents.
    Sec. 3. References.
                  TITLE I--INVESTING IN STUDENTS AND FAMILIES

              Subtitle A--Increasing College Access and Completion

    Sec. 101. Federal Pell Grants.
    Sec. 102. College Access and Completion Innovation Fund.
    Sec. 103. Investment in historically Black colleges and universities
                                and other minority-serving institutions.
    Sec. 104. Investment in cooperative education.
    Sec. 105. Loan forgiveness for servicemembers activated for duty.
    Sec. 106. Veterans Educational Equity Supplemental Grant Program.
             Subtitle B--Student Financial Aid Form Simplification

    Sec. 121. General effective date.
    Sec. 122. Treatment of assets in need analysis.
    Sec. 123. Changes to total income; aid eligibility.
                         TITLE II--STUDENT LOAN REFORM

                        Subtitle A--Stafford Loan Reform

    Sec. 201. Federal Family Education Loan appropriations.
    Sec. 202. Scope and duration of Federal loan insurance program.
    Sec. 203. Applicable interest rates.
    Sec. 204. Federal payments to reduce student interest costs.
    Sec. 205. Federal PLUS Loans.
    Sec. 206. Federal Consolidation Loan.
    Sec. 207. Unsubsidized Stafford loans for middle-income borrowers.
    Sec. 208. Loan repayment for civil legal assistance attorneys.
    Sec. 209. Special allowances.
    Sec. 210. Revised special allowance calculation.
    Sec. 211. Origination of Direct Loans at institutions located outside
                                the United States.
    Sec. 212. Agreements with institutions.
    Sec. 213. Terms and conditions of loans.
    Sec. 214. Contracts.
    Sec. 215. Interest rates.
                        Subtitle B--Perkins Loan Reform

    Sec. 221. Federal Direct Perkins Loans terms and conditions.
    Sec. 222. Authorization of appropriations.
    Sec. 223. Allocation of funds.
    Sec. 224. Federal Direct Perkins Loan allocation.
    Sec. 225. Agreements with institutions of higher education.
    Sec. 226. Student loan information by eligible institutions.
    Sec. 227. Terms of loans.
    Sec. 228. Distribution of assets from student loan funds.
    Sec. 229. Implementation of non-title IV revenue requirement.
    Sec. 230. Administrative expenses.
                TITLE III--MODERNIZATION, RENOVATION, AND REPAIR

                 Subtitle A--Elementary and Secondary Education

    Sec. 301. Definitions.
     Chapter 1--Grants for Modernization, Renovation, or Repair of Public
                               School Facilities

    Sec. 311. Purpose.
    Sec. 312. Allocation of funds.
    Sec. 313. Allowable uses of funds.
    Sec. 314. Priority projects.
     Chapter 2--Supplemental Grants for Louisiana, Mississippi, and Alabama

    Sec. 321. Purpose.
    Sec. 322. Allocation to local educational agencies.
    Sec. 323. Allowable uses of funds.
                         Chapter 3--General Provisions

    Sec. 331. Impermissible uses of funds.
    Sec. 332. Supplement, not supplant.
    Sec. 333. Prohibition regarding State aid.
    Sec. 334. Maintenance of effort.
    Sec. 335. Special rule on contracting.
    Sec. 336. Use of American iron, steel, and manufactured goods.
    Sec. 337. Labor standards.
    Sec. 338. Charter schools.
    Sec. 339. Green schools.
    Sec. 340. Reporting.
    Sec. 341. Special rules.
    Sec. 342. Promotion of employment experiences.
    Sec. 343. Advisory Council on Green, High-Performing Public School
                                Facilities.
    Sec. 344. Education regarding projects.
    Sec. 345. Availability of funds.
                          Subtitle B--Higher Education

    Sec. 351. Federal assistance for community college modernization and
                                construction.
                    TITLE IV--EARLY LEARNING CHALLENGE FUND

    Sec. 401. Purpose.
    Sec. 402. Programs authorized.
    Sec. 403. Quality pathways grants.
    Sec. 404. Development grants.
    Sec. 405. Research and evaluation.
    Sec. 406. Reporting requirements.
    Sec. 407. Construction.
    Sec. 408. Definitions.
    Sec. 409. Availability of funds.
                    TITLE V--AMERICAN GRADUATION INITIATIVE

    Sec. 501. Authorization and appropriation.
    Sec. 502. Definitions; grant priority.
    Sec. 503. Grants to eligible entities for community college reform.
    Sec. 504. Grants to eligible States for community college programs.
    Sec. 505. National activities.

    SEC. 3. REFERENCES.

        Except as otherwise expressly provided, whenever in this division
    an amendment or repeal is expressed in terms of an amendment to, or
    repeal of, a section or other provision, the reference shall be
    considered to be made to a section or other provision of the Higher
    Education Act of 1965 (20 U.S.C. 1001 et seq.).

                  TITLE I--INVESTING IN STUDENTS AND FAMILIES

              Subtitle A--Increasing College Access and Completion

    SEC. 101. FEDERAL PELL GRANTS.

        (a) Amount of Grants.--Section 401(b) (20 U.S.C. 1070a(b)) is
    amended--
                (1) by amending paragraph (2)(A) to read as follows:
                        ``(A) The amount of the Federal Pell Grant for a
                    student eligible under this part shall be--
                                ``(i) the maximum Federal Pell Grant, as
                            specified in the last enacted appropriation Act
                            applicable to that award year, plus
                                ``(ii) the amount of the increase
                            calculated under paragraph (8)(B) for that
                            year, less
                                ``(iii) an amount equal to the amount
                            determined to be the expected family
                            contribution with respect to that student for
                            that year.''; and
                (2) by amending paragraph (8), as amended by the Higher
            Education Opportunity Act (Public Law 110-315), to read as
            follows:
                ``(8) Additional funds.--
                        ``(A) In general.--There are authorized to be
                    appropriated, and there are appropriated, to carry out
                    subparagraph (B) of this paragraph (in addition to any
                    other amounts appropriated to carry out this section
                    and out of any money in the Treasury not otherwise
                    appropriated) the following amounts--
                                ``(i) $2,030,000,000 for fiscal year 2008;
                                ``(ii) $2,733,000,000 for fiscal year 2009;
                            and
                                ``(iii) such sums as may be necessary for
                            fiscal year 2010 and each subsequent fiscal
                            year to provide the amount of increase of the
                            maximum Federal Pell Grant required by clauses
                            (ii) and (iii) of subparagraph (B).
                        ``(B) Increase in federal pell grants.--The amounts
                    made available pursuant to subparagraph (A) shall be
                    used to increase the amount of the maximum Federal Pell
                    Grant for which a student shall be eligible during an
                    award year, as specified in the last enacted
                    appropriation Act applicable to that award year, by--
                                ``(i) $490 for each of the award years
                            2008-2009 and 2009-2010;
                                ``(ii) $690 for the award year 2010-2011;
                            and
                                ``(iii) the amount determined under
                            subparagraph (C) for each succeeding award
                            year.
                        ``(C) Inflation-adjusted amounts.--
                                ``(i) Award year 2011-2012.--For award year
                            2011-2012, the amount determined under this
                            subparagraph for purposes of subparagraph
                            (B)(iii) shall be equal to--
                                        ``(I) $5,550 or the total maximum
                                    Federal Pell Grant for the preceding
                                    award year (as determined under clause
                                    (iv)(II)), whichever is greater,
                                    increased by a percentage equal to the
                                    annual adjustment percentage for award
                                    year 2011-2012; reduced by
                                        ``(II) $4,860 or the maximum
                                    Federal Pell Grant for which a student
                                    was eligible for the preceding award
                                    year, as specified in the last enacted
                                    appropriation Act applicable to that
                                    year, whichever is greater; and
                                        ``(III) rounded to the nearest $5.
                                ``(ii) Subsequent award years.--For award
                            year 2012-2013 and each of the subsequent award
                            years, the amount determined under this
                            subparagraph for purposes of subparagraph
                            (B)(iii) shall be equal to--
                                        ``(I) the total maximum Federal
                                    Pell Grant for the preceding award year
                                    (as determined under clause (iv)(II)),
                                    increased by a percentage equal to the
                                    annual adjustment percentage for the
                                    award year for which the amount under
                                    this subparagraph is being determined;
                                    reduced by
                                        ``(II) $4,860 or the maximum
                                    Federal Pell Grant for which a student
                                    was eligible for the preceding award
                                    year, as specified in the last enacted
                                    appropriation Act applicable to that
                                    year, whichever is greater; and
                                        ``(III) rounded to the nearest $5.
                                ``(iii) Limitation on decreases.--
                            Notwithstanding clauses (i) and (ii), if the
                            amount determined under clause (i) or (ii) for
                            an award year is less than the amount
                            determined under this paragraph for the
                            preceding award year, the amount determined
                            under such clause for such award year shall be
                            the amount determined under this paragraph for
                            the preceding award year.
                                ``(iv) Definitions.--For purposes of this
                            subparagraph--
                                        ``(I) the term `annual adjustment
                                    percentage' as it applies to an award
                                    year is equal to the sum of--
                                                ``(aa) the estimated
                                            percentage change in the
                                            Consumer Price Index (as
                                            determined by the Secretary,
                                            using the definition in section
                                            478(f)) for the most recent
                                            calendar year ending prior to
                                            the beginning of that award
                                            year; and
                                                ``(bb) one percentage
                                            point; and
                                        ``(II) the term `total maximum
                                    Federal Pell Grant' as it applies to a
                                    preceding award year is equal to the
                                    sum of--
                                                ``(aa) the maximum Federal
                                            Pell Grant for which a student
                                            is eligible during an award
                                            year, as specified in the last
                                            enacted appropriation Act
                                            applicable to that preceding
                                            award year; and
                                                ``(bb) the amount of the
                                            increase in the maximum Federal
                                            Pell Grant required by this
                                            paragraph for that preceding
                                            award year.
                        ``(D) Program requirements and operations otherwise
                    unaffected.--Except as provided in subparagraphs (B)
                    and (C), nothing in this paragraph shall be construed
                    to alter the requirements and operations of the Federal
                    Pell Grant Program as authorized under this section, or
                    to authorize the imposition of additional requirements
                    or operations for the determination and allocation of
                    Federal Pell Grants under this section.
                        ``(E) Availability of funds.--The amounts made
                    available by subparagraph (A) for any fiscal year shall
                    be available beginning on October 1 of that fiscal
                    year, and shall remain available through September 30
                    of the succeeding fiscal year.''.
        (b) Conforming Amendments.--Title IV (20 U.S.C. 1070 et seq.) is
    further amended--
                (1) in section 401(b)(6), as amended by the Higher
            Education Opportunity Act (Public Law 110-315), by striking
            ``the grant level specified in the appropriate Appropriation
            Act for this subpart for such year'' and inserting ``the
            Federal Pell Grant amount, determined under paragraph (2)(A),
            for which a student is eligible during such award year'';
                (2) in section 402D(d)(1), by striking ``exceed the maximum
            appropriated Pell Grant'' and inserting ``exceed the Federal
            Pell Grant amount, determined under section 401(b)(2)(A), for
            which a student is eligible'';
                (3) in section 435(a)(5)(A)(i)(I), by striking ``one-half
            the maximum Federal Pell Grant award for which a student would
            be eligible'' and inserting ``one-half the Federal Pell Grant
            amount, determined under section 401(b)(2)(A), for which a
            student would be eligible'';
                (4) in section 483(e)(3)(ii), by striking ``based on the
            maximum Federal Pell Grant award at the time of application''
            and inserting ``based on the Federal Pell Grant amount,
            determined under section 401(b)(2)(A), for which a student is
            eligible at the time of application'';
                (5) in section 485E(b)(1)(A), by striking ``of such
            students' potential eligibility for a maximum Federal Pell
            Grant under subpart 1 of part A'' and inserting ``of such
            students' potential eligibility for the Federal Pell Grant
            amount, determined under section 401(b)(2)(A), for which the
            student would be eligible''; and
                (6) in section 894(f)(2)(C)(ii)(I), by striking ``the
            maximum Federal Pell Grant for each award year'' and inserting
            ``the Federal Pell Grant amount, determined under section
            401(b)(2)(A), for which a student may be eligible for each
            award year''.
        (c) Effective Date.--The amendments made by subsections (a) and (b)
    of this section shall take effect on July 1, 2010.

    SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVATION FUND.

        (a) Header.--Part E of title VII (20 U.S.C. 1141 et seq.) is
    amended by striking the header of such part and inserting the
    following:

           ``PART E--COLLEGE ACCESS AND COMPLETION INNOVATION FUND''.

        (b) Purpose.--Part E of title VII (20 U.S.C. 1141 et seq.) is
    further amended by inserting before section 781 the following:

    ``SEC. 780. PURPOSES.

        ``The purposes of this part are--
                ``(1) to promote innovation in postsecondary education
            practices and policies by institutions of higher education,
            States, and nonprofit organizations to improve student success,
            completion, and post-completion employment, particularly for
            students from groups that are underrepresented in postsecondary
            education; and
                ``(2) to assist States in developing longitudinal data
            systems, common metrics, and reporting systems to enhance the
            quality and availability of information about student success,
            completion, and post-completion employment.''.
        (c) Authorization and Appropriation.--Section 781(a) (20 U.S.C.
    1141(a)) is amended to read as follows:
        ``(a) Authorization and Appropriation.--
                ``(1) In general.--There are authorized to be appropriated,
            and there are appropriated, to carry out this part (in addition
            to any other amounts appropriated to carry out this part and
            out of any money in the Treasury not otherwise appropriated),
            $600,000,000 for each of the fiscal years 2010 through 2014.
                ``(2) Allocations.--Of the amount appropriated for any
            fiscal year under paragraph (1)--
                        ``(A) 25 percent shall be made available to carry
                    out section 781;
                        ``(B) 50 percent shall be made available to carry
                    out section 782;
                        ``(C) 23 percent shall be made available to carry
                    out section 783; and
                        ``(D) 2 percent shall be made available to carry
                    out section 784.''.
        (d) State Grants and Grants to Eligible Entities.--Part E of title
    VII (20 U.S.C. 1141 et seq.) is further amended by adding at the end
    the following:

    ``SEC. 782. STATE INNOVATION COMPLETION GRANTS.

        ``(a) Program Authorization.--From the amount appropriated under
    section 781(a)(2)(B) to carry out this section, the Secretary shall
    award grants to States on a competitive basis to promote student
    persistence in, and completion of, postsecondary education.
        ``(b) Federal Share; Non-Federal Share.--
                ``(1) Federal share.--The amount of the Federal share under
            this section for a fiscal year shall be equal to \2/3\ of the
            costs of the activities and services described in subsection
            (d)(1) that are carried out under the grant.
                ``(2) Non-federal share.--The amount of the non-Federal
            share under this section shall be equal to \1/3\ of the costs
            of the activities and services described in subsection (d)(1).
            The non-Federal share may be in cash or in kind, and may be
            provided from State resources, contributions from private
            organizations, or both.
                ``(3) Supplement, not supplant.--The Federal and non-
            Federal shares required by this paragraph shall be used to
            supplement, and not supplant, State and private resources that
            would otherwise be expended to carry out activities and
            services to promote student persistence in and completion of
            postsecondary education.
        ``(c) Application and Selection.--
                ``(1) Application requirements.--For each fiscal year for
            which a State desires to receive a grant under this section,
            the State agency with jurisdiction over higher education, or
            another agency designated by the Governor or chief executive of
            the State to administer the grant program under this section,
            shall submit an application to the Secretary at such time, in
            such manner, and containing such information as the Secretary
            may require. Such application shall include--
                        ``(A) a description of the State's capacity to
                    administer the grant under this section;
                        ``(B) a description of the State's plans for using
                    the grant funds for activities described in subsection
                    (d)(1), including plans for how the State will make
                    special efforts to provide benefits to students in the
                    State who are from groups that are underrepresented in
                    postsecondary education;
                        ``(C) a description of how the State will provide
                    for the non-Federal share from State resources, private
                    contributions, or both;
                        ``(D) a description of--
                                ``(i) the administrative system that the
                            State has in place to administer the activities
                            and services described in subsection (d)(1); or
                                ``(ii) the plan to develop such
                            administrative system;
                        ``(E) a description of the data system the State
                    has or will have in place to measure the performance
                    and progress toward the State's goals included in the
                    Access and Completion Plan submitted, or that will be
                    submitted, under paragraph (2)(A); and
                        ``(F) the assurances under paragraph (2).
                ``(2) State assurances.--The assurances required in
            paragraph (1)(F) shall include an assurance of each of the
            following:
                        ``(A) That the State will submit, not later than
                    July 1, 2011, an Access and Completion Plan to increase
                    the State's rate of persistence in and completion of
                    postsecondary education. Such plan shall include--
                                ``(i) the State's annual and long-term
                            quantifiable goals with respect to--
                                        ``(I) the rates of postsecondary
                                    enrollment, persistence, and
                                    completion, disaggregated by income,
                                    race, ethnicity, sex, disability, and
                                    age of students;
                                        ``(II) closing gaps in enrollment,
                                    persistence, and completion rates for
                                    students from groups that are
                                    underrepresented in postsecondary
                                    education;
                                        ``(III) targeting education and
                                    training programs to address labor
                                    market needs in the State, as such
                                    needs are determined by the State, or
                                    the State in coordination with the
                                    State public employment service, the
                                    State workforce investment board, or
                                    industry or sector partnerships in the
                                    State; and
                                        ``(IV) improving coordination
                                    between two-year and four-year
                                    institutions of higher education in the
                                    State, including supporting
                                    comprehensive articulation agreements
                                    between such institutions; and
                                ``(ii) the State's plan to develop an
                            interoperable statewide longitudinal data
                            system that--
                                        ``(I) can be linked to other data
                                    systems, as applicable, including
                                    elementary and secondary education and
                                    workforce data systems;
                                        ``(II) will collect, maintain,
                                    disaggregate (by institution, income,
                                    race, ethnicity, sex, disability, and
                                    age of students), and analyze
                                    postsecondary education and workforce
                                    information, including--
                                                ``(aa) postsecondary
                                            education enrollment,
                                            persistence, and completion
                                            information;
                                                ``(bb) post-completion
                                            employment outcomes of students
                                            who enrolled in postsecondary
                                            programs and training programs
                                            offered by eligible training
                                            providers under the Workforce
                                            Investment Act of 1998 (29
                                            U.S.C. 2801 et seq.);
                                                ``(cc) postsecondary
                                            education and employment
                                            outcomes of students who move
                                            out of the State; and
                                                ``(dd) postsecondary
                                            instructional workforce
                                            information; and
                                        ``(III) makes the information
                                    described in subclause (I) available to
                                    the general public in a manner that is
                                    transparent and user-friendly.
                        ``(B) That the State has a comprehensive planning
                    or policy formulation process with respect to
                    increasing postsecondary enrollment, persistence, and
                    completion that--
                                ``(i) encourages coordination between the
                            State administration of grants under this
                            section and similar State programs;
                                ``(ii) encourages State policies that are
                            designed to improve rates of enrollment and
                            persistence in, and completion of,
                            postsecondary education for all categories of
                            institutions of higher education described in
                            section 132(d) in the State;
                                ``(iii) considers the postsecondary
                            education needs of students from groups that
                            are underrepresented in postsecondary
                            education;
                                ``(iv) considers the resources of public
                            and private institutions of higher education,
                            organizations, and agencies within the State
                            that are capable of providing access to
                            postsecondary education opportunities within
                            the State; and
                                ``(v) provides for direct, equitable, and
                            active participation in the comprehensive
                            planning or policy formulation process or
                            processes, through membership on State planning
                            commissions, State advisory councils, or other
                            State entities established by the State and
                            consistent with State law, by representatives
                            of--
                                        ``(I) institutions of higher
                                    education, including at least one
                                    member from a junior or community
                                    college (as defined in section 312(f));
                                        ``(II) students;
                                        ``(III) other providers of
                                    postsecondary education services
                                    (including organizations providing
                                    access to such services);
                                        ``(IV) the general public in the
                                    State; and
                                        ``(V) postsecondary education
                                    faculty members, including at least one
                                    faculty member whose primary
                                    responsibilities are teaching and
                                    scholarship.
                        ``(C) That the State will incorporate policies and
                    practices that, through the activities funded under
                    this section, are determined to be effective in
                    improving rates of postsecondary education enrollment,
                    persistence, and completion into the future
                    postsecondary education policies and practices of the
                    State to ensure that the benefits achieved through the
                    activities funded under this section continue beyond
                    the period of the grant.
                        ``(D) That the State will participate in the
                    evaluation required under section 784.
                ``(3) Subgrants to nonprofit organizations.--A State
            receiving a payment under this section may elect to make a
            subgrant to one or more nonprofit organizations in the State,
            including agencies with agreements with the Secretary under
            subsections (b) and (c) of section 428 on the date of the
            enactment of the Student Aid and Fiscal Responsibility Act of
            2009, or a partnership of such organizations, to carry out
            activities and services described in subsection (d)(1), if the
            nonprofit organization or partnership--
                        ``(A) was in existence on the day before the date
                    of the enactment of the Student Aid and Fiscal
                    Responsibility Act of 2009; and
                        ``(B) as of such day, was participating in
                    activities and services related to promoting
                    persistence in, and completion of, postsecondary
                    education, such as the activities and services
                    described in subsection (d)(1).
                ``(4) Priority.--In awarding grants under this section, the
            Secretary shall give priority to States that enter into a
            partnership with one of the following entities to carry out the
            activities and services described in subsection (d)(1):
                        ``(A) A philanthropic organization, as such term is
                    defined in section 781(i)(1).
                        ``(B) An agency with an agreement with the
                    Secretary under subsections (b) and (c) of section 428
                    on the date of the enactment of Student Aid and Fiscal
                    Responsibility Act of 2009.
        ``(d) Uses of Funds.--
                ``(1) Authorized uses.--A State receiving a grant under
            this section shall use the grant funds to--
                        ``(A) provide programs in such State that increase
                    persistence in, and completion of, postsecondary
                    education, which may include--
                                ``(i) assisting institutions of higher
                            education in providing financial literacy,
                            education, and counseling to enrolled students;
                                ``(ii) assisting students enrolled in an
                            institution of higher education to reduce the
                            amount of loan debt incurred by such students;
                                ``(iii) providing grants to students
                            described in section 415A(a)(1), in accordance
                            with the terms of that section; and
                                ``(iv) carrying out the activities
                            described in section 415E(a); and
                        ``(B) support the development and implementation of
                    a statewide longitudinal data system, as described in
                    subsection (c)(2)(A)(ii).
                ``(2) Prohibited uses.--Funds made available under this
            section shall not be used to promote any lender's loans.
                ``(3) Restrictions on use of funds.--A State--
                        ``(A) shall use not less than \1/3\ of the sum of
                    the Federal and non-Federal share used for paragraph
                    (1)(A) on activities that benefit students enrolled in
                    junior or community colleges (as defined in section
                    312(f)), two-year public institutions, or two-year
                    programs of instruction at four-year public
                    institutions;
                        ``(B) may use not more than 10 percent of the sum
                    of the Federal and non-Federal share under this section
                    for activities described in paragraph (1)(B); and
                        ``(C) may use not more than 6 percent of the sum of
                    the Federal and non-Federal share under this section
                    for administrative purposes relating to the grant under
                    this section.
        ``(e) Annual Report.--Each State receiving a grant under this
    section shall submit to the Secretary an annual report on--
                ``(1) the activities and services described in subsection
            (d)(1) that are carried out with such grant;
                ``(2) the effectiveness of such activities and services in
            increasing postsecondary persistence and completion, as
            determined by measurable progress in achieving the State's
            goals for persistence and completion described in the Access
            and Completion Plan submitted by the State under subsection
            (c)(2)(A), if such plan has been submitted; and
                ``(3) any other information or assessments the Secretary
            may require.
        ``(f) Definitions.--In this section:
                ``(1) Industry or sector partnership.--The term `industry
            or sector partnership' means a workforce collaborative that
            organizes key stakeholders in a targeted industry cluster into
            a working group that focuses on the human capital needs of a
            targeted industry cluster and that includes, at the appropriate
            stage of development of the partnership--
                        ``(A) representatives of multiple firms or
                    employers (including workers) in a targeted industry
                    cluster, including small- and medium-sized employers
                    when practicable;
                        ``(B) 1 or more representatives of State labor
                    organizations, central labor coalitions, or other labor
                    organizations;
                        ``(C) 1 or more representatives of local workforce
                    investment boards;
                        ``(D) 1 or more representatives of postsecondary
                    educational institutions or other training providers;
                    and
                        ``(E) 1 or more representatives of State workforce
                    agencies or other entities providing employment
                    services.
                ``(2) State public employment service.--The term `State
            public employment service' has the meaning given such term in
            section 502(a)(9) of the Student Aid and Fiscal Responsibility
            Act of 2009.
                ``(3) State workforce investment board; local workforce
            investment board.--The terms `State workforce investment board'
            and `local workforce investment board' have the meanings given
            such terms in section 502(a)(10) of the Student Aid and Fiscal
            Responsibility Act of 2009.

    ``SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLETION NATIONAL
                  ACTIVITIES.

        ``(a) Programs Authorized.--From the amount appropriated under
    section 781(a)(2)(C) to carry out this section, the Secretary shall
    award grants, on a competitive basis, to eligible entities in
    accordance with this section to conduct innovative programs that
    advance knowledge about, and adoption of, policies and practices that
    increase the number of individuals with postsecondary degrees or
    certificates.
        ``(b) Eligible Entities.--The Secretary is authorized to award
    grants under subsection (a) to--
                ``(1) institutions of higher education;
                ``(2) States;
                ``(3) nonprofit organizations with demonstrated experience
            in the operation of programs to increase postsecondary
            completion;
                ``(4) philanthropic organizations (as such term is defined
            in section 781(i)(1));
                ``(5) entities receiving a grant under chapter 1 of subpart
            2 of part A of title IV; and
                ``(6) consortia of any of the entities described in
            paragraphs (1) through (5).
        ``(c) Innovation Grants.--
                ``(1) Minimum award.--A grant awarded under subsection (a)
            shall be not less than $1,000,000.
                ``(2) Grants uses.--The Secretary's authority to award
            grants under subsection (a) includes--
                        ``(A) the authority to award to an eligible entity
                    a grant in an amount equal to all or part of the amount
                    of funds received by such entity from philanthropic
                    organizations (as such term is defined in section
                    781(i)(1)) to conduct innovative programs that advance
                    knowledge about, and adoption of, policies and
                    practices that increase the number of individuals with
                    postsecondary degrees or certificates; and
                        ``(B) the authority to award an eligible entity a
                    grant to develop 2-year programs that provide
                    supplemental grant or loan benefits to students that--
                                ``(i) are designed to improve student
                            outcomes, including degree completion,
                            graduation without student loan debt, and post-
                            completion employment;
                                ``(ii) are in addition to the student
                            financial aid available under title IV of this
                            Act; and
                                ``(iii) do not result in the reduction of
                            the amount of that aid or any other student
                            financial aid for which a student is otherwise
                            eligible under Federal law.
                ``(3) Application.--To be eligible to receive a grant under
            subsection (a), an eligible entity shall submit an application
            at such time, in such manner, and containing such information
            as the Secretary shall require.
                ``(4) Priorities.--In awarding grants under subsection (a),
            the Secretary shall give priority to applications that--
                        ``(A) are from an eligible entity with demonstrated
                    experience in serving students from groups that are
                    underrepresented in postsecondary education, including
                    institutions of higher education that are eligible for
                    assistance under title III or V, or are from a
                    consortium that includes an eligible entity with such
                    experience;
                        ``(B) are from an eligible entity that is a public
                    institution of higher education that does not
                    predominantly provide an educational program for which
                    it awards a bachelor's degree (or an equivalent
                    degree), or from a consortium that includes at least
                    one such institution;
                        ``(C) include activities to increase degree or
                    certificate completion in the fields of science,
                    technology, engineering, and mathematics, including
                    preparation for, or entry into, postbaccaluareate
                    study, especially for women and other groups of
                    students who are underrepresented in such fields;
                        ``(D) are from an eligible entity that is a
                    philanthropic organization with the primary purpose of
                    providing scholarships and support services to students
                    from groups that are underrepresented in postsecondary
                    education, or are from a consortium that includes such
                    an organization; or
                        ``(E) are from an eligible entity that encourages
                    partnerships between institutions of higher education
                    with high degree-completion rates and institutions of
                    higher education with low degree-completion rates from
                    the same category of institutions described in section
                    132(d) to facilitate the sharing of information
                    relating to, and the implementation of, best practices
                    for increasing postsecondary completion.
                ``(5) Technical assistance.--The Secretary may reserve up
            to $5,000,000 per year to award grants and contracts to provide
            technical assistance to eligible entities receiving a grant
            under subsection (a), including technical assistance on the
            evaluation conducted in accordance with section 784 and
            establishing networks of eligible entities receiving grants
            under such subsection.
        ``(d) Reports.--
                ``(1) Annual reports by entities.--Each eligible entity
            receiving a grant under subsection (a) shall submit to the
            Secretary an annual report on--
                        ``(A) the effectiveness of the program carried out
                    with such grant in increasing postsecondary completion,
                    as determined by measurable progress in achieving the
                    goals of the program, as described in the application
                    for such grant; and
                        ``(B) any other information or assessments the
                    Secretary may require.
                ``(2) Annual report to congress.--The Secretary shall
            submit to the authorizing committees an annual report on grants
            awarded under subsection (a), including--
                        ``(A) the amount awarded to each eligible entity
                    receiving a grant under such subsection; and
                        ``(B) a description of the activities conducted by
                    each such eligible entity.

    ``SEC. 784. EVALUATION.

        ``From the amount appropriated under section 781(a)(2)(D), the
    Director of the Institute of Education Sciences shall evaluate the
    programs funded under this part. Not later than January 30, 2016, the
    Director shall issue a final report on such evaluation to the
    authorizing committees and the Secretary, and shall make such report
    available to the public.

    ``SEC. 785. VETERANS RESOURCE OFFICER GRANTS.

        ``(a) Program Authorized.--The Secretary shall award grants, on a
    competitive basis, to eligible institutions of higher education to hire
    a Veterans Resource Officer to increase the college completion rates
    for veterans enrolled at such institutions.
        ``(b) Definitions.--In this section:
                ``(1) Eligible institution of higher education.--The term
            `eligible institution of higher education' means an institution
            of higher education that has an enrollment of at least 100
            full-time equivalent students who are veterans.
                ``(2) Full-time equivalent students.--The term `full-time
            equivalent students' has the meaning given such term in section
            312(e).
                ``(3) Veteran.--The term `veteran' has the meaning give
            such term in section 480(c).
        ``(c) Application.--To be eligible to receive a grant under this
    section, an eligible institution of higher education shall submit an
    application at such time, in such manner, and containing such
    information as the Secretary shall require.
        ``(d) Uses of Funds.--
                ``(1) In general.--An eligible institution of higher
            education receiving a grant under this section shall use such
            grant to hire 1 or 2 Veterans Resource Officers (in the case of
            an institution that has an enrollment of at least 200 full-time
            equivalent students who are veterans) to serve in the office of
            campus programs, or a similar office, at such institution and
            carry out the activities described in paragraph (2).
                ``(2) Activities.--A Veterans Resource Officer shall carry
            out activities at an eligible institution of higher education
            to help increase the completion rates for veterans enrolled at
            such institution, which shall include the following activities:
                        ``(A) Serving as a link between student veterans
                    and the staff of the institution.
                        ``(B) Serving as a link between student veterans
                    and local facilities of the Department of Veterans
                    Affairs.
                        ``(C) Organizing and advising student veterans
                    organization.
                        ``(D) Organizing veterans oriented group functions
                    and events.
                        ``(E) Maintaining newsletters and listserves to
                    distribute news and information to all student
                    veterans.
                        ``(F) Organizing new student veterans campus
                    orientation.
                        ``(G) Ensuring that the Department of Veterans
                    Affairs certifying official at such institution is
                    properly trained.
                ``(3) Priority.--To the extent practicable, each
            institution described in paragraph (1) shall give priority to
            hiring a veteran to serve as a Veterans Resource Officer.
        ``(e) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary
    for fiscal year 2010 and each succeeding fiscal year.''.

    SEC. 103. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
                  AND OTHER MINORITY-SERVING INSTITUTIONS.

        Section 371 (20 U.S.C. 1067q) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (2), by striking ``section 502''
                    and inserting ``section 502(a)'';
                        (B) in paragraph (3), by striking ``section 316''
                    and inserting ``section 316(b)'';
                        (C) in paragraph (5), by striking ``in subsection
                    (c)'' and inserting ``in section 318(b)'';
                        (D) in paragraph (6), by striking ``in subsection
                    (c)'' and inserting ``in section 320(b)''; and
                        (E) in paragraph (7), by striking ``in subsection
                    (c)'' and inserting ``in section 319(b)'';
                (2) in subsection (b)--
                        (A) in paragraph (1)(A), by striking
                    ``$255,000,000'' and all that follows and inserting
                    ``$255,000,000 for each of the fiscal years 2008
                    through 2019.''; and
                        (B) by amending paragraph (2)(B) to read as
                    follows:
                        ``(B) Stem and articulation programs.--From the
                    amount made available for allocation under this
                    subparagraph by subparagraph (A)(i) for any fiscal
                    year--
                                ``(i) 90 percent shall be available for
                            Hispanic-serving institutions for activities
                            described in sections 503 and 513, with a
                            priority given to applications that propose--
                                        ``(I) to increase the number of
                                    Hispanic and other low-income students
                                    attaining degrees in the fields of
                                    science, technology, engineering, or
                                    mathematics; and
                                        ``(II) to develop model transfer
                                    and articulation agreements between 2-
                                    year Hispanic-serving institutions and
                                    4-year institutions in such fields; and
                                ``(ii) 10 percent shall be available for
                            grants under section 355.'';
                        (C) in paragraph (2)(C)(ii), by striking ``and
                    shall be available for a competitive'' and all that
                    follows and inserting ``and shall be made available as
                    grants under section 318 and allotted among such
                    institutions under section 318(e), treating such
                    amount, plus the amount appropriated for such fiscal
                    year in a regular or supplemental appropriation Act to
                    carry out section 318, as the amount appropriated to
                    carry out section 318 for purposes of allotments under
                    section 318(e)''; and
                        (D) in paragraph (2)(D)--
                                (i) in clause (iii), by striking ``for
                            activities described in section 311(c)'' and
                            inserting ``and shall be made available as
                            grants under section 320, treating such
                            $5,000,000 as part of the amount appropriated
                            for such fiscal year in a regular or
                            supplemental appropriation Act to carry out
                            such section and using such $5,000,000 for
                            purposes described in subsection (c) of such
                            section''; and
                                (ii) in clause (iv), by striking
                            ``described in subsection (a)(7)--'' and all
                            that follows and inserting ``and shall be made
                            available as grants under section 319, treating
                            such $5,000,000 as part of the amount
                            appropriated for such fiscal year in a regular
                            or supplemental appropriation Act to carry out
                            such section and using such $5,000,000 for
                            purposes described in subsection (c) of such
                            section''; and
                (3) by striking subsection (c).

    SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION.

        There are authorized to be appropriated, and there are
    appropriated, to carry out part N of title VIII of the Higher Education
    Act of 1965 (20 U.S.C. 1161n) (in addition to any other amounts
    appropriated to carry out such part and out of any money in the
    Treasury not otherwise appropriated), $10,000,000 for fiscal year 2010.

    SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS ACTIVATED FOR DUTY.

        (a) In General.--Section 484B(b)(2) (20 U.S.C. 1091b(b)(2)) is
    amended by adding at the end the following:
                        ``(F) Tuition relief for students called to
                    military service.--
                                ``(i) Waiver of repayment by students
                            called to military service.--In addition to the
                            waivers authorized by subparagraphs (D) and
                            (E), the Secretary shall waive the amounts that
                            students are required to return under this
                            section if the withdrawals on which the returns
                            are based are withdrawals necessitated by
                            reason of service in the uniformed services.
                                ``(ii) Loan forgiveness authorized.--
                            Whenever a student's withdrawal from an
                            institution of higher education is necessitated
                            by reason of service in the uniformed services,
                            the Secretary shall, with respect to the
                            payment period or period of enrollment for
                            which such student did not receive academic
                            credit as a result of such withdrawal, carry
                            out a program--
                                        ``(I) through the holder of the
                                    loan, to assume the obligation to
                                    repay--
                                                ``(aa) the outstanding
                                            principal and accrued interest
                                            on any loan assistance awarded
                                            to the student under part B
                                            (including to a parent on
                                            behalf of the student under
                                            section 428B) for such payment
                                            period or period of enrollment;
                                            minus
                                                ``(bb) any amount of such
                                            loan assistance returned by the
                                            institution in accordance with
                                            paragraph (1) of this
                                            subsection for such payment
                                            period or period of enrollment;
                                            and
                                        ``(II) to cancel--
                                                ``(aa) the outstanding
                                            principal and accrued interest
                                            on the loan assistance awarded
                                            to the student under part D or
                                            E (including a Federal Direct
                                            PLUS loan awarded to a parent
                                            on behalf of the student) for
                                            such payment period or period
                                            of enrollment; minus
                                                ``(bb) any amount of such
                                            loan assistance returned by the
                                            institution in accordance with
                                            paragraph (1) of this
                                            subsection for such payment
                                            period or period of enrollment.
                                ``(iii) Reimbursement for cancellation of
                            perkins loans.--The Secretary shall pay to each
                            institution for each fiscal year an amount
                            equal to the aggregate of the amounts of
                            Federal Perkins loans in such institutions's
                            student loan fund which are cancelled pursuant
                            to clause (iii)(II) for such fiscal year, minus
                            an amount equal to the aggregate of the amounts
                            of any such loans so canceled which were made
                            from Federal capital contributions to its
                            student loan fund provided by the Secretary
                            under section 468. None of the funds
                            appropriated pursuant to section 461(b) shall
                            be available for payments pursuant to this
                            paragraph. To the extent feasible, the
                            Secretary shall pay the amounts for which any
                            institution qualifies under this paragraph not
                            later than 3 months after the institution files
                            an institutional application for campus-based
                            funds.
                                ``(iv) Loan eligibility and limits for
                            students.--Any amounts that are returned by an
                            institution in accordance with paragraph (1),
                            or forgiven or waived by the Secretary under
                            this subparagraph, with respect to a payment
                            period or period of enrollment for which a
                            student did not receive academic credit as a
                            result of withdrawal necessitated by reason of
                            service in the uniformed services, shall not be
                            included in the calculation of the student's
                            annual or aggregate loan limits for assistance
                            under this title, or otherwise affect the
                            student's eligibility for grants or loans under
                            this title.
                                ``(v) Definition.--In this subparagraph,
                            the term `service in the uniformed services'
                            has the meaning given such term in section
                            484C(a).''.
        (b) Effective Date.--
                (1) In general.--The amendments made by this section shall
            take effect for periods of service in the uniformed services
            beginning after the date of the enactment of this Act.
                (2) Definition.--In this paragraph, the term ``period of
            service in the uniformed services'' means the period beginning
            30 days prior to the date a student is required to report to
            service in the uniformed services (as defined in section
            484C(a) of the Higher Education Act of 1965 (20 U.S.C.
            1091c(a)) and ending when such student returns from such
            service.

    SEC. 106. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

        (a) Veterans Educational Equity Supplemental Grant Program.--
    Subpart 1 of part A of title IV (20 U.S.C. 1070a et seq.) is amended by
    adding at the end the following:

    ``SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

        ``(a) Veterans Educational Equity Supplemental Grants Authorized.--
    The Secretary shall award a grant to each eligible student, in an
    amount determined in accordance with subsection (c), to assist such
    student with paying the cost of tuition incurred by the student for a
    program of education at an institution of higher education.
        ``(b) Definitions.--In this section--
                ``(1) Eligible student.--The term `eligible student' means
            a student who--
                        ``(A) is a covered individual, as such term is
                    defined in section 3311(b) of title 38, United States
                    Code;
                        ``(B) is enrolled at an institution of higher
                    education that--
                                ``(i) is not a public institution of higher
                            education; and
                                ``(ii) is located in a State with a zero,
                            or very low, maximum tuition charge per credit
                            hour compared to the maximum tuition charge per
                            credit hour in all other States, as determined
                            by the Secretary of Veterans Affairs (based on
                            the determinations of maximum tuition charged
                            per credit hour in each State for the purposes
                            of chapter 33 of title 38, United States Code);
                            and
                        ``(C) is eligible for educational assistance for an
                    academic year, and will receive an amount of such
                    assistance for such year for fees charged the
                    individual that is less than the maximum amount of such
                    assistance available for fees charged for such year in
                    such State.
                ``(2) Educational assistance.--The term `educational
            assistance' means the amount of educational assistance from the
            Secretary of Veterans Affairs an eligible student receives or
            will receive under section 3313(c)(1)(A) of title 38, United
            States Code, or a similar amount of such assistance under
            paragraphs (2) through (7) of such section 3313(c).
        ``(c) Grant Amount.--A grant to an eligible student under this
    section be equal to an amount that is--
                ``(1) the maximum amount of educational assistance for fees
            charged that the eligible student would receive, in accordance
            with section 3313(c) of title 38, United States Code, if such
            student attended the public institution of higher education in
            the State in which the eligible student is enrolled that has
            the highest fees charged to an individual for a year in such
            State (as determined by the Secretary of Veterans Affairs for
            the purposes of chapter 33 of such title 38), less
                ``(2) the educational assistance the eligible student will
            receive, in accordance with such section, for fees charged to
            the student for such year at the institution of higher
            education at which the student is enrolled.
        ``(d) Uses of Funds.--An eligible student who receives a grant
    under this section shall use such grant to pay tuition incurred by the
    student for a program of education at an institution of higher
    education.
        ``(e) Notification.--The Secretary, in coordination with Secretary
    of Veterans Affairs, shall establish a system of notification to ensure
    the timely delivery to each eligible student of--
                ``(1) educational assistance received by the student; and
                ``(2) grants awarded to the student under this section.
        ``(f) Authorization and Appropriation.--There are authorized to be
    appropriated, and there are appropriated, such sums as may be necessary
    to carry out this section (in addition to any other amounts
    appropriated to carry out this section and out of any money in the
    Treasury not otherwise appropriated).''.
        (b) Conforming Amendment.--The header for subpart 1 of part A of
    title IV (20 U.S.C. 1070a et seq.) is amended by inserting ``; Veterans
    Educational Equity Supplemental Grants'' after ``Pell Grants''.

             Subtitle B--Student Financial Aid Form Simplification

    SEC. 121. GENERAL EFFECTIVE DATE.

        Except as otherwise provided in this subtitle, amendments made by
    this subtitle shall be effective with respect to determinations of need
    for assistance under title IV of the Higher Education Act of 1965 (20
    U.S.C. 1070 et seq.) for award years beginning on or after July 1,
    2011.

    SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS.

        (a) Amount of Need.--Section 471 (20 U.S.C. 1087kk) is amended--
                (1) by striking ``Except'' and inserting the following:
        ``(a) In General.--Except'';
                (2) by inserting ``and subject to subsection (b)'' after
            ``therein''; and
                (3) by adding at the end the following:
        ``(b) Asset Cap for Need-based Aid.--Notwithstanding any other
    provision of this title, a student shall not be eligible to receive a
    Federal Pell Grant, a Federal Direct Stafford Loan, or work assistance
    under this title if--
                ``(1) in the case of a dependent student, the combined net
            assets of the student and the student's parents are equal to an
            amount greater than $150,000 (or a successor amount prescribed
            by the Secretary under section 478(c)); or
                ``(2) in the case of an independent student, the net assets
            of the student (and the student's spouse, if applicable) are
            equal to an amount greater than $150,000 (or a successor amount
            prescribed by the Secretary under section 478(c)).''.
        (b) Data Elements.--Section 474(b) (20 U.S.C. 1087nn(b)) is
    amended--
                (1) by striking paragraph (4); and
                (2) by redesignating paragraphs (5), (6), and (7) as
            paragraphs (4), (5), and (6), respectively.
        (c) Dependent Students.--Section 475 (20 U.S.C. 1087oo) is
    amended--
                (1) in subsection (a)--
                        (A) in paragraph (1)--
                                (i) by striking ``adjusted''; and
                                (ii) by inserting ``and'' after the
                            semicolon;
                        (B) in paragraph (2), by striking ``; and'' and
                    inserting a period; and
                        (C) by striking paragraph (3);
                (2) in subsection (b)--
                        (A) in the header, by striking ``Adjusted'';
                        (B) in the matter preceding paragraph (1), by
                    striking ``adjusted'';
                        (C) by striking paragraph (1);
                        (D) by redesignating paragraphs (2) and (3) as
                    paragraphs (1) and (2), respectively;
                        (E) in paragraph (1) (as redesignated by
                    subparagraph (D) of this paragraph), by striking
                    ``adjusted''; and
                        (F) in paragraph (2) (as redesignated by
                    subparagraph (D) of this paragraph), by striking
                    ``paragraph (2)'' and inserting ``paragraph (1)'';
                (3) by repealing subsection (d);
                (4) in subsection (e)--
                        (A) by striking ``The adjusted available'' and
                    inserting ``The available'';
                        (B) by striking ``to as `AAI')'' and inserting ``to
                    as `AI')'';
                        (C) by striking ``From Adjusted Available Income
                    (AAI)'' and inserting ``From Available Income (AI)'';
                    and
                        (D) in the table--
                                (i) by striking ``If AAI'' and inserting
                            ``If AI''; and
                                (ii) by striking ``of AAI'' each place it
                            appears and inserting ``of AI'';
                (5) in subsection (f)--
                        (A) by striking ``and assets'' each place it
                    appears;
                        (B) in paragraph (2)(B), by striking ``or assets'';
                    and
                        (C) in paragraph (3)--
                                (i) by striking ``are taken into'' and
                            inserting ``is taken into''; and
                                (ii) by striking ``adjusted'';
                (6) in subsection (g)(6), by striking ``exceeds the sum
            of'' and all that follows and inserting ``exceeds the parents'
            total income (as defined in section 480)'';
                (7) by repealing subsection (h); and
                (8) in subsection (i), by striking ``adjusted'' each place
            it appears.
        (d) Family Contribution for Independent Students Without Dependents
    Other Than a Spouse.--Section 476 (20 U.S.C. 1087pp) is amended--
                (1) in subsection (a)--
                        (A) by striking paragraph (1);
                        (B) by redesignating paragraphs (2) and (3) as
                    paragraphs (1) and (2), respectively;
                        (C) in paragraph (1) (as redesignated by
                    subparagraph (B)), by striking ``the sum resulting
                    under paragraph (1)'' and inserting ``the family's
                    contribution from available income (determined in
                    accordance with subsection (b))''; and
                        (D) in paragraph (2)(A) (as redesignated by
                    subparagraph (B)), by striking ``paragraph (2)'' and
                    inserting ``paragraph (1)'';
                (2) by repealing subsection (c); and
                (3) in subsection (d)--
                        (A) by striking ``and assets''; and
                        (B) by striking ``or assets''.
        (e) Family Contribution for Independent Students With Dependents
    Other Than a Spouse.--Section 477 (20 U.S.C. 1087qq) is amended--
                (1) in subsection (a)--
                        (A) by striking paragraph (1);
                        (B) by redesignating paragraphs (2), (3), and (4)
                    as paragraphs (1), (2), and (3), respectively;
                        (C) in paragraph (1) (as redesignated by
                    subparagraph (B)), by striking ``such adjusted
                    available income'' and inserting ``the family's
                    available income (determined in accordance with
                    subsection (b))'';
                        (D) in paragraph (2) (as redesignated by
                    subparagraph (B)), by striking ``paragraph (2)'' and
                    inserting ``paragraph (1)''; and
                        (E) in paragraph (3)(A) (as redesignated by
                    subparagraph (B)), by striking ``paragraph (3)'' and
                    inserting ``paragraph (2)'';
                (2) by repealing subsection (c); and
                (3) in subsection (d)--
                        (A) by striking ``The adjusted available'' and
                    inserting ``The available'';
                        (B) by striking ``to as `AAI')'' and inserting ``to
                    as `AI')'';
                        (C) by striking ``From Adjusted Available Income
                    (AAI)'' and inserting ``From Available Income (AI)'';
                    and
                        (D) in the table--
                                (i) by striking ``If AAI'' and inserting
                            ``If AI''; and
                                (ii) by striking ``of AAI'' each place it
                            appears and inserting ``of AI''; and
                        (E) in subsection (e)--
                                (i) by striking ``and assets''; and
                                (ii) by striking ``or assets''.
        (f) Regulations; Updated Tables.--Section 478 (20 U.S.C. 1087rr) is
    amended--
                (1) in subsection (a), by inserting ``or amounts, as the
            case may be,'' after ``tables'' each place the term appears;
                (2) by amending subsection (c) to read as follows:
        ``(c) Asset Cap for Need-based Aid.--For each award year after
    award year 2011-2012, the Secretary shall publish in the Federal
    Register a revised net asset cap for the purposes of section 471(b).
    Such revised cap shall be determined by increasing the dollar amount in
    such section by a percentage equal to the estimated percentage change
    in the Consumer Price Index (as determined by the Secretary) between
    December 2010 and the December preceding the beginning of such award
    year, and rounding the result to the nearest $5.'';
                (3) by repealing subsection (d); and
                (4) in subsection (e), by striking ``adjusted'' both places
            it appears.

    SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY.

        (a) Definition of Untaxed Income and Benefits.--Section 480(b)(1)
    (20 U.S.C. 1087vv(b)(1)), as amended by the Higher Education
    Opportunity Act (Public Law 110-315), is amended--
                (1) by striking subparagraphs (A), (B), (C), (E), (F), and
            (I);
                (2) by redesignating subparagraphs (D), (G), and (H) as
            subparagraphs (A), (B), and (C), respectively;
                (3) in subparagraph (B) (as redesignated by paragraph (2)),
            by inserting ``and'' after the semicolon; and
                (4) in subparagraph (C) (as redesignated by paragraph (2)),
            by striking ``; and'' and inserting a period.
        (b) Definition of Assets.--Section 480(f)(2) (20 U.S.C.
    1087vv(f)(2)) is amended--
                (1) by striking ``or'' at the end of subparagraph (B);
                (2) by striking the period at the end of subparagraph (C)
            and inserting ``; or''; and
                (3) by adding at the end the following:
                        ``(D) an employee pension benefit plan (as defined
                    in section 3(2) of the Employee Retirement Income
                    Security Act of 1974 (29 U.S.C. 1002(2))).''.
        (c) Financial Administrator Discretion.--Section 479A(b) (20 U.S.C.
    1087tt) is amended in the subsection heading, by striking ``to
    Assets''.
        (d) Suspension of Eligibility for Drug-related Offenses.--Section
    484(r)(1) (20 U.S.C. 1091(r)(1)) is amended to read as follows:
                ``(1) In general.--A student who is convicted of any
            offense under any Federal or State law involving the sale of a
            controlled substance for conduct that occurred during a period
            of enrollment for which the student was receiving any grant,
            loan, or work assistance under this title shall not be eligible
            to receive any grant, loan, or work assistance under this title
            from the date of that conviction for the period of time
            specified in the following subparagraphs:
                        ``(A) For a first offense, the period of
                    ineligibility shall be 2 years.
                        ``(B) For a second offense, the period of
                    ineligibility shall be indefinite.''.

                         TITLE II--STUDENT LOAN REFORM

                        Subtitle A--Stafford Loan Reform

    SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS.

        Section 421 (20 U.S.C. 1071) is amended--
                (1) in subsection (b), in the matter following paragraph
            (6), by inserting ``, except that no sums may be expended after
            June 30, 2010, with respect to loans under this part for which
            the first disbursement would be made after such date'' after
            ``expended''; and
                (2) by adding at the end the following new subsection:
        ``(d) Termination of Authority To Make or Insure New Loans.--
    Notwithstanding paragraphs (1) through (6) of subsection (b) or any
    other provision of law--
                ``(1) no new loans (including consolidation loans) may be
            made or insured under this part after June 30, 2010; and
                ``(2) no funds are authorized to be appropriated, or may be
            expended, under this Act or any other Act to make or insure
            loans under this part (including consolidation loans) for which
            the first disbursement would be made after June 30, 2010,
    except as expressly authorized by an Act of Congress enacted after the
    date of enactment of Student Aid and Fiscal Responsibility Act of
    2009.''.

    SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.

        Section 424(a) (20 U.S.C. 1074(a)) is amended by striking
    ``September 30, 1976,'' and all that follows and inserting ``September
    30, 1976, for each of the succeeding fiscal years ending prior to
    October 1, 2009, and for the period from October 1, 2009, to June 30,
    2010, for loans first disbursed on or before June 30, 2010.''.

    SEC. 203. APPLICABLE INTEREST RATES.

        Section 427A(l) (20 U.S.C. 1077a(l)) is amended--
                (1) in paragraph (1), by inserting ``and before July 1,
            2010,'' after ``July 1, 2006,'';
                (2) in paragraph (2), by inserting ``and before July 1,
            2010,'' after ``July 1, 2006,'';
                (3) in paragraph (3), by inserting ``and that was disbursed
            before July 1, 2010,'' after ``July 1, 2006,''; and
                (4) in paragraph (4)--
                        (A) in the matter preceding subparagraph (A), by
                    striking ``July 1, 2012'' and inserting ``July 1,
                    2010''; and
                        (B) by repealing subparagraphs (D) and (E).

    SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

        (a) Higher Education Act of 1965.--Section 428 (20 U.S.C. 1078) is
    amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), in the matter preceding
                    subparagraph (A), by inserting ``for which the first
                    disbursement is made before July 1, 2010, and'' after
                    ``eligible institution''; and
                        (B) in paragraph (5), by striking ``September 30,
                    2014,'' and all that follows through the period and
                    inserting ``June 30, 2010.'';
                (2) in subsection (b)(1)--
                        (A) in subparagraph (G)(ii), by inserting ``and
                    before July 1, 2010,'' after ``July 1, 2006,''; and
                        (B) in subparagraph (H)(ii), by inserting ``and
                    that are first disbursed before July 1, 2010,'' after
                    ``July 1, 2006,'';
                (3) in subsection (f)(1)(A)(ii)--
                        (A) by striking ``during fiscal years beginning'';
                    and
                        (B) by inserting ``and first disbursed before July
                    1, 2010,'' after ``October 1, 2003,''; and
                (4) in subsection (j)(1), by inserting ``, before July 1,
            2010,'' after ``section 435(d)(1)(D) of this Act shall''.
        (b) College Cost Reduction and Access Act.--Section 303 of the
    College Cost Reduction and Access Act (Public Law 110-84) is repealed.

    SEC. 205. FEDERAL PLUS LOANS.

        Section 428B(a)(1) (20 U.S.C. 1078-2(a)(1)) is amended by striking
    ``A graduate'' and inserting ``Prior to July 1, 2010, a graduate''.

    SEC. 206. FEDERAL CONSOLIDATION LOAN.

        (a) Amendments.--Section 428C (20 U.S.C. 1078-3) is amended--
                (1) in subsection (a)--
                        (A) by amending paragraph (3)(B)(i)(V) to read as
                    follows:
                                ``(V) an individual who has a consolidation
                            loan under this section and does not have a
                            consolidation loan under section 455(g) may
                            obtain a subsequent consolidation loan under
                            section 455(g).''; and
                        (B) in paragraph (4)(A), by inserting ``, and first
                    disbursed before July 1, 2010'' after ``under this
                    part'';
                (2) in subsection (b)--
                        (A) in paragraph (1)(E), by inserting before the
                    semicolon ``, and before July 1, 2010''; and
                        (B) in paragraph (5), by striking ``In the event
                    that'' and inserting ``If, before July 1, 2010,'';
                (3) in subsection (c)(1)--
                        (A) in subparagraph (A)(ii), by inserting ``and
                    that is disbursed before July 1, 2010,'' after
                    ``2006,''; and
                        (B) in subparagraph (C), by inserting ``and first
                    disbursed before July 1, 2010,'' after ``1994,''; and
                (4) in subsection (e), by striking ``September 30, 2014.''
            and inserting ``June 30, 2010. No loan may be made under this
            section for which the first disbursement would be on or after
            July 1, 2010.''.
        (b) Effective Date.--The amendments made by subsection (a)(1)(A)
    shall be effective at the close of June 30, 2010.

    SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.

        Section 428H (20 U.S.C. 1078-8) is amended--
                (1) in subsection (a), by inserting ``that are first
            disbursed before July 1, 2010,'' after ``under this part'';
                (2) in subsection (b)--
                        (A) by striking ``Any student'' and inserting
                    ``Prior to July 1, 2010, any student''; and
                        (B) by inserting ``for which the first disbursement
                    is made before such date'' after ``unsubsidized Federal
                    Stafford Loan''; and
                (3) in subsection (h), by inserting ``and that are first
            disbursed before July 1, 2010,'' after ``July 1, 2006,''.

    SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.

        Section 428L(b)(2)(A) (20 U.S.C. 1078-12(b)(2)(A)) is amended--
                (1) by amending clause (i) to read as follows:
                                ``(i) subject to clause (ii)--
                                        ``(I) a loan made, insured, or
                                    guaranteed under this part, and that is
                                    first disbursed before July 1, 2010; or
                                        ``(II) a loan made under part D or
                                    part E; and''; and
                (2) in clause (ii)--
                        (A) by striking ``428C or 455(g)'' and inserting
                    ``428C, that is disbursed before July 1, 2010, or
                    section 455(g)''; and
                        (B) in subclause (II), by inserting ``for which the
                    first disbursement is made before July 1, 2010,'' after
                    ``or 428H''.

    SEC. 209. SPECIAL ALLOWANCES.

        Section 438 (20 U.S.C. 1087-1) is amended--
                (1) in subsection (b)(2)(I)--
                        (A) in the header, by inserting ``, and before july
                    1, 2010'' after ``2000'';
                        (B) in clause (i), by inserting ``and before July
                    1, 2010,'' after ``2000,'';
                        (C) in clause (ii)(II), by inserting ``and before
                    July 1, 2010,'' after ``2006,'';
                        (D) in clause (iii), by inserting ``and before July
                    1, 2010,'' after ``2000,'';
                        (E) in clause (iv), by inserting ``and that is
                    disbursed before July 1, 2010,'' after ``2000,'';
                        (F) in clause (v)(I), by inserting ``and before
                    July 1, 2010,'' after ``2006,''; and
                        (G) in clause (vi)--
                                (i) in the header, by inserting ``, and
                            before july 1, 2010'' after ``2007''; and
                                (ii) in the matter preceding subclause (I),
                            by inserting ``and before July 1, 2010,'' after
                            ``2007,'';
                (2) in subsection (c)--
                        (A) in paragraph (2)(B)--
                                (i) in clause (iii), by inserting ``and''
                            after the semicolon;
                                (ii) in clause (iv), by striking ``; and''
                            and inserting a period; and
                                (iii) by striking clause (v); and
                        (B) in paragraph (6), by inserting ``and first
                    disbursed before July 1, 2010,'' after ``1992,''; and
                (3) in subsection (d)(2)(B), by inserting ``, and before
            July 1, 2010'' after ``2007''.

    SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION.

        (a) Revised Calculation Rule.--Section 438(b)(2)(I) of the Higher
    Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(I)) is amended by adding
    at the end the following new clause:
                                ``(vii) Revised calculation rule to reflect
                            financial market conditions.--
                                        ``(I) Calculation based on libor.--
                                    For the calendar quarter beginning on
                                    October 1, 2009, and each subsequent
                                    calendar quarter, in computing the
                                    special allowance paid pursuant to this
                                    subsection with respect to loans
                                    described in subclause (II), clause
                                    (i)(I) of this subparagraph shall be
                                    applied by substituting `of the 1-month
                                    London Inter Bank Offered Rate (LIBOR)
                                    for United States dollars in effect for
                                    each of the days in such quarter as
                                    compiled and released by the British
                                    Bankers Association' for `of the quotes
                                    of the 3-month commercial paper
                                    (financial) rates in effect for each of
                                    the days in such quarter as reported by
                                    the Federal Reserve in Publication H-15
                                    (or its successor) for such 3-month
                                    period'.
                                        ``(II) Loans eligible for libor-
                                    based calculation.--The special
                                    allowance paid pursuant to this
                                    subsection shall be calculated as
                                    described in subclause (I) with respect
                                    to special allowance payments for the
                                    3-month period ending December 31,
                                    2009, and each succeeding 3-month
                                    period, on loans for which the first
                                    disbursement is made--
                                                ``(aa) on or after the date
                                            of enactment of the Student Aid
                                            and Fiscal Responsibility Act
                                            of 2009, and before July 1,
                                            2010; and
                                                ``(bb) on or after January
                                            1, 2000, and before the date of
                                            enactment of the Student Aid
                                            and Fiscal Responsibility Act
                                            of 2009, if, not later than the
                                            last day of the second full
                                            fiscal quarter after the date
                                            of enactment of such Act, the
                                            holder of the loan
                                            affirmatively and permanently
                                            waives all contractual,
                                            statutory or other legal rights
                                            to a special allowance paid
                                            pursuant to this subsection
                                            that is calculated using the
                                            formula in effect at the time
                                            the loans were first disbursed.
                                        ``(III) Terms of waiver.--A waiver
                                    pursuant to subclause (II)(bb) shall--
                                                ``(aa) be applicable to all
                                            loans described in such
                                            subclause that are held under
                                            any lender identification
                                            number associated with the
                                            holder (pursuant to section
                                            487B); and
                                                ``(bb) apply with respect
                                            to all future calculations of
                                            the special allowance on loans
                                            described in such subclause
                                            that are held on the date of
                                            such waiver or that are
                                            acquired by the holder after
                                            such date.
                                        ``(IV) Participant's yield.--For
                                    the calendar quarter beginning on
                                    October 1, 2009, and each subsequent
                                    calendar quarter, the Secretary's
                                    participant yield in any loan for which
                                    the first disbursement is made on or
                                    after January 1, 2000, and before
                                    October 1, 2009, and that is held by a
                                    lender that has sold any participation
                                    interest in such loan to the Secretary
                                    shall be determined by using the LIBOR-
                                    based rate described in subclause (I)
                                    as the substitute rate (for the
                                    commercial paper rate) referred to in
                                    the participation agreement between the
                                    Secretary and such lender.'';
        (b) Conforming Amendment.--Section 438(b)(2)(I) (20 U.S.C. 1087-
    1(b)(2)(I)) is further amended--
                (1) in clause (i)(II), by striking ``such average bond
            equivalent rate'' and inserting ``the rate determined under
            subclause (I)''; and
                (2) in clause (v)(III) by striking ``(iv), and (vi)'' and
            inserting ``(iv), (vi), and (vii)''.

    SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS LOCATED OUTSIDE
                  THE UNITED STATES.

        (a) Loans for Students Attending Institutions Located Outside the
    United States.--Section 452 (20 U.S.C. 1087b) is amended by adding at
    the end the following:
        ``(d) Institutions Located Outside the United States.--Loan funds
    for students (and parents of students) attending institutions located
    outside the United States shall be disbursed through a financial
    institution located in the United States and designated by the
    Secretary to serve as the agent of such institutions with respect to
    the receipt of the disbursements of such loan funds and the transfer of
    such funds to such institutions. To be eligible to receive funds under
    this part, an otherwise eligible institution located outside the United
    States shall make arrangements, subject to regulations by the
    Secretary, with the agent designated by the Secretary under this
    subsection to receive funds under this part.''.
        (b) Conforming Amendments.--
                (1) Amendments.--Section 102 (20 U.S.C. 1002), as amended
            by section 102 of the Higher Education Opportunity Act (Public
            Law 110-315) and section 101 of Public Law 111-39, is amended--
                        (A) by striking ``part B'' each place it appears
                    and inserting ``part D'';
                        (B) in subsection (a)(1)(C), by inserting ``,
                    consistent with the requirements of section 452(d)''
                    before the period at the end; and
                        (C) in subsection (a)(2)(A)--
                                (i) in the matter preceding clause (i), by
                            striking ``made, insured, or guaranteed'' and
                            inserting ``made''; and
                                (ii) in clause (iii)--
                                        (I) in subclause (III), by striking
                                    ``only Federal Stafford'' and all that
                                    follows through ``section 428B'' and
                                    inserting ``only Federal Direct
                                    Stafford Loans under section
                                    455(a)(2)(A), Federal Direct
                                    Unsubsidized Stafford Loans under
                                    section 455(a)(2)(D), or Federal Direct
                                    PLUS Loans under section
                                    455(a)(2)(B)''; and
                                        (II) in subclause (V), by striking
                                    ``a Federal Stafford'' and all that
                                    follows through ``section 428B'' and
                                    inserting ``a Federal Direct Stafford
                                    Loan under section 455(a)(2)(A), a
                                    Federal Direct Unsubsidized Stafford
                                    Loan under section 455(a)(2)(D), or a
                                    Federal Direct PLUS Loan under section
                                    455(a)(2)(B)''.
                (2) Effective date.--The amendments made by subparagraph
            (C) of paragraph (1) shall be effective on July 1, 2010, as if
            enacted as part of section 102(a)(1) of the Higher Education
            Opportunity Act (Public Law 110-315).

    SEC. 212. AGREEMENTS WITH INSTITUTIONS.

        Section 454 (20 U.S.C. 1087d) is amended--
                (1) in subsection (a), by striking paragraph (4) and
            redesignating the succeeding paragraphs accordingly; and
                (2) in subsection (b)(2), by striking ``(5), (6), and (7)''
            and inserting ``(5), and (6)''.

    SEC. 213. TERMS AND CONDITIONS OF LOANS.

        (a) Amendments.--Section 455 (20 U.S.C. 1087e) is amended--
                (1) in subsection (a)(1), by inserting ``, and first
            disbursed on June 30, 2010,'' before ``under sections 428'';
            and
                (2) in subsection (g)--
                        (A) by inserting ``, including any loan made under
                    part B and first disbursed before July 1, 2010'' after
                    ``section 428C(a)(4)''; and
                        (B) by striking the third sentence.
        (b) Effective Date.--The amendment made by subsection (a)(1) shall
    apply with respect to loans first disbursed under part D of title IV of
    the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after
    July 1, 2010.

    SEC. 214. CONTRACTS.

        Section 456 (20 U.S.C. 1087f) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (1)--
                                (i) in the header, by striking ``In
                            general'' and inserting ``Awarding of
                            contracts'';
                                (ii) by striking ``The Secretary'' and
                            inserting the following:
                        ``(A) In general.--The Secretary''; and
                                (iii) by adding at the end the following:
                        ``(B) Awarding contracts for servicing loans.--The
                    Secretary shall, if practicable, award multiple
                    contracts, through a competitive bidding process, to
                    entities, including eligible not-for-profit servicers,
                    to service loans originated under this part. The
                    competitive bidding process shall take into account
                    price, servicing capacity, and capability, and may take
                    into account the capacity and capability to provide
                    default aversion activities and outreach services.
                        ``(C) Job retention incentive payment.--(i) In a
                    contract with an entity under subparagraph (B) for the
                    servicing of loans, the Secretary shall provide a job
                    retention incentive payment, in an amount and manner
                    determined by the Secretary, if such entity agrees to
                    give priority for hiring for positions created as a
                    result of such a contract to those geographical
                    locations at which the entity performed student loan
                    origination or servicing activities under the Federal
                    Family Education Loan Program as of the date of
                    enactment of the Student Aid and Fiscal Responsibility
                    Act of 2009.
                        ``(ii) In determining the allocation of loans to be
                    serviced by an entity awarded such a contract, the
                    Secretary shall consider the retention of highly
                    qualified employees of such entity a positive factor in
                    determining such allocation.'';
                        (B) in paragraph (2)--
                                (i) in the first sentence, by inserting ``,
                            including eligible not-for-profit servicers,''
                            after ``The entities'';
                                (ii) by amending the third sentence to read
                            as follows: ``The entities with which the
                            Secretary may enter into such contracts shall
                            include, where practicable, agencies with
                            agreements with the Secretary under sections
                            428(b) and (c) on the date of the enactment of
                            the Student Aid and Fiscal Responsibility Act
                            of 2009, and eligible not-for-profit servicers,
                            if such agencies or servicers meet the
                            qualifications as determined by the Secretary
                            under this subsection and if those agencies or
                            servicers have such experience and demonstrated
                            effectiveness.''; and
                                (iii) by striking the last sentence and
                            inserting the following: ``In awarding
                            contracts to such State agencies, and such
                            eligible not-for-profit servicers, the
                            Secretary shall, to the extent practicable and
                            consistent with the purposes of this part, give
                            special consideration to State agencies and
                            such servicers with a history of high quality
                            performance and demonstrated integrity in
                            conducting operations with institutions of
                            higher education and the Secretary.'';
                        (C) by redesignating paragraph (3) as paragraph
                    (4), and by inserting in such paragraph ``, or of any
                    eligible not-for-profit servicer to enter into an
                    agreement for the purposes of this section as a member
                    of a consortium of such entities'' before the period at
                    the end; and
                        (D) by inserting after paragraph (2) the following
                    new paragraph:
                ``(3) Servicing by eligible not-for-profit servicers.--
                        ``(A) In general.--Notwithstanding any other
                    provision of this section, in each State where one or
                    more eligible not-for-profit servicer has its principal
                    place of business, the Secretary shall contract with
                    each such servicer to service loans originated under
                    this part on behalf of borrowers attending institutions
                    located within such State, provided that the servicer
                    demonstrates that it meets the standards for servicing
                    Federal assets and providing quality service and agrees
                    to service the loans at a competitive market rate, as
                    determined by the Secretary. In determining such a
                    competitive market rate, the Secretary may take into
                    account the volume of loans serviced by the servicer.
                    Contracts awarded under this paragraph shall be subject
                    to the same requirements for quality, performance, and
                    accountability as contracts awarded under paragraph (2)
                    for similar activities.
                        ``(B) Allocations.--(i) One servicer.--In the case
                    of a State with only one eligible not-for-profit
                    servicer with a contract described in subparagraph (A),
                    the Secretary shall, at a minimum, allocate to such
                    servicer, on an annual basis and subject to such
                    contract, the servicing rights for the lesser of--
                                ``(I) the loans of 100,000 borrowers
                            (including borrowers who borrowed loans in a
                            prior year that were serviced by the servicer)
                            attending institutions located within the
                            State; or
                                ``(II) the loans of all the borrowers
                            attending institutions located within the
                            State.
                        ``(ii) Multiple servicers.--In the case of a State
                    with more than one eligible not-for-profit servicer
                    with a contract described in subparagraph (A), the
                    Secretary shall, at a minimum, allocate to each such
                    servicer, on an annual basis and subject to such
                    contract, the servicing rights for the lesser of--
                                ``(I) the loans of 100,000 borrowers
                            (including borrowers who borrowed loans in a
                            prior year that were serviced by the servicer)
                            attending institutions located within the
                            State; or
                                ``(II) an equal share of the loans of all
                            borrowers attending institutions located within
                            the State, except the Secretary shall adjust
                            such shares as necessary to ensure that the
                            loans of any single borrower remain with a
                            single servicer.
                        ``(iii) Additional allocation.--The Secretary may
                    allocate additional servicing rights to an eligible
                    not-for-profit servicer based on the performance of
                    such servicer, as determined by the Secretary,
                    including performance in the areas of customer service
                    and default aversion.
                        ``(C) Multiple loans.--Notwithstanding the
                    allocations required by subparagraph (B), the Secretary
                    may transfer loans among servicers who are awarded
                    contracts to service loans pursuant to this section to
                    ensure that the loans of any single borrower remain
                    with a single servicer.''; and
                (2) by adding at the end the following:
        ``(c) Report to Congress.--Not later than 3 years after the date of
    the enactment of the Student Aid and Fiscal Responsibility Act of 2009,
    the Secretary shall prepare and submit to the authorizing committees, a
    report evaluating the performance of all eligible not-for-profit
    servicers awarded a contract under this section to service loans
    originated under this part. Such report shall give consideration to--
                ``(1) customer satisfaction of borrowers and institutions
            with respect to the loan servicing provided by the servicers;
                ``(2) compliance with applicable regulations by the
            servicers; and
                ``(3) the effectiveness of default aversion activities, and
            outreach services (if any), provided by the servicers.
        ``(d) Definitions.--In this section:
                ``(1) Default aversion activities.--The term `default
            aversion activities' means activities that are directly related
            to providing collection assistance to the Secretary on a
            delinquent loan, prior to the loan being legally in a default
            status, including due diligence activities required pursuant to
            regulations.
                ``(2) Eligible not-for-profit servicer.--
                        ``(A) In general.--The term `eligible not-for-
                    profit servicer' means an entity that, on the date of
                    enactment of the Student Aid and Fiscal Responsibility
                    Act of 2009--
                                ``(i) meets the definition of an eligible
                            not-for-profit holder under section 435(p),
                            except that such term does not include eligible
                            lenders described in paragraph (1)(D) of such
                            section;
                                ``(ii) notwithstanding clause (i), is the
                            sole beneficial owner of a loan for which the
                            special allowance rate is calculated under
                            section 438(b)(2)(I)(vi)(II) because the loan
                            is held by an eligible lender trustee that is
                            an eligible not-for-profit holder as defined
                            under section 435(p)(1)(D); or
                                ``(iii) is an affiliated entity of an
                            eligible not-for-profit servicer described in
                            clause (i) or (ii) that--
                                        ``(I) directly employs, or will
                                    directly employ (on or before the date
                                    the entity begins servicing loans under
                                    a contract awarded by the Secretary
                                    pursuant to subsection (a)(3)(A)), the
                                    majority of individuals who perform
                                    student loan servicing functions; and
                                        ``(II) on such date of enactment,
                                    was performing, or had entered into a
                                    contract with a third party servicer
                                    (as such term is defined in section
                                    481(c)) who was performing, student
                                    loan servicing functions for loans made
                                    under part B of this title.
                        ``(B) Affiliated entity.--For the purposes of
                    subparagraph (A), the term `affiliated entity' means an
                    entity contracted to perform services for an eligible
                    not-for-profit servicer that--
                                ``(i) is a nonprofit entity or is wholly
                            owned by a nonprofit entity; and
                                ``(ii) is not owned or controlled, in whole
                            or in part, by--
                                        ``(I) a for-profit entity; or
                                        ``(II) an entity having its
                                    principal place of business in another
                                    State.
                ``(3) Outreach services.--The term `outreach services'
            means programs offered to students and families, including
            programs delivered in coordination with institutions of higher
            education that--
                        ``(A) encourage--
                                ``(i) students to attend and complete a
                            degree or certification program at an
                            institution of higher education; and
                                ``(ii) students and families to obtain
                            financial aid, but minimize the borrowing of
                            education loans; and
                        ``(B) deliver financial literacy and counseling
                    tools.''.

    SEC. 215. INTEREST RATES.

        Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding at
    the end the following new subparagraph:
                        ``(E) Reduced rates for undergraduate fdsl on and
                    after july 1, 2012.--Notwithstanding the preceding
                    paragraphs of this subsection and subparagraph (A) of
                    this paragraph, for Federal Direct Stafford Loans made
                    to undergraduate students for which the first
                    disbursement is made on or after July 1, 2012, the
                    applicable rate of interest shall, during any 12-month
                    period beginning on July 1 and ending on June 30, be
                    determined on the preceding June 1 and be equal to--
                                ``(i) the bond equivalent rate of 91-day
                            Treasury bills auctioned at the final auction
                            held prior to such June 1; plus
                                ``(ii) 2.5 percent,
                    except that such rate shall not exceed 6.8 percent.''.

                        Subtitle B--Perkins Loan Reform

    SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND CONDITIONS.

        Part D of title IV (20 U.S.C. 1087a et seq.) is amended by
    inserting after section 455 the following new section:

    ``SEC. 455A. FEDERAL DIRECT PERKINS LOANS.

        ``(a) Designation of Loans.--Loans made to borrowers under this
    section shall be known as `Federal Direct Perkins Loans'.
        ``(b) In General.--It is the purpose of this section to authorize
    loans to be awarded by institutions of higher education through
    agreements established under section 463(f). Unless otherwise specified
    in this section, all terms and conditions and other requirements
    applicable to Federal Direct Unsubsidized Stafford loans established
    under section 455(a)(2)(D) shall apply to loans made pursuant to this
    section.
        ``(c) Eligible Borrowers.--Any student meeting the requirements for
    student eligibility under section 464(b) (including graduate and
    professional students as defined in regulations promulgated by the
    Secretary) shall be eligible to borrow a Federal Direct Perkins Loan,
    provided the student attends an eligible institution with an agreement
    with the Secretary under section 463(f), and the institution uses its
    authority under that agreement to award the student a loan.
        ``(d) Loan Limits.--The annual and aggregate limits for loans under
    this section shall be the same as those established under section 464,
    and aggregate limits shall include loans made by institutions under
    agreements under section 463(a).
        ``(e) Applicable Rates of Interest.--Loans made pursuant to this
    section shall bear interest, on the unpaid balance of the loan, at the
    rate of 5 percent per year.''.

    SEC. 222. AUTHORIZATION OF APPROPRIATIONS.

        Section 461 (20 U.S.C. 1087aa) is amended--
                (1) in subsection (a), by inserting ``, before July 1,
            2010,'' after ``The Secretary shall'';
                (2) in subsection (b)--
                        (A) in paragraph (1)--
                                (i) by striking ``(1) For the purpose'' and
                            inserting ``For the purpose''; and
                                (ii) by striking ``and for each of the five
                            succeeding fiscal years''; and
                        (B) by striking paragraph (2); and
                (3) by striking subsection (c).

    SEC. 223. ALLOCATION OF FUNDS.

        Section 462 (20 U.S.C. 1087bb) is amended--
                (1) in subsection (a)(1), by striking ``From'' and
            inserting ``For any fiscal year before fiscal year 2010,
            from''; and
                (2) in subsection (i)(1), by striking ``for any fiscal
            year,'' and inserting ``for any fiscal year before fiscal year
            2010,''.

    SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

        Part E of title IV is further amended by inserting after section
    462 (20 U.S.C. 1087bb) the following:

    ``SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

        ``(a) Purposes.--The purposes of this section are--
                ``(1) to allocate, among eligible and participating
            institutions (as such terms are defined in this section), the
            authority to make Federal Direct Perkins Loans under section
            455A with a portion of the annual loan authority described in
            subsection (b); and
                ``(2) to make funds available, in accordance with section
            452, to each participating institution from a portion of the
            annual loan authority described in subsection (b), in an amount
            not to exceed the sum of an institution's allocation of funds
            under subparagraphs (A), (B), and (C) of subsection (b)(1) to
            enable each such institution to make Federal Direct Perkins
            Loans to eligible students at the institution.
        ``(b) Available Direct Perkins Annual Loan Authority.--
                ``(1) Availability and allocations.--There are hereby made
            available, from funds made available for loans made under part
            D, not to exceed $6,000,000,000 of annual loan authority for
            award year 2010-2011 and each succeeding award year, to be
            allocated as follows:
                        ``(A) The Secretary shall allocate not more than
                    \1/2\ of such funds for each award year by allocating
                    to each participating institution an amount equal to
                    the adjusted self-help need amount of the institution,
                    as determined in accordance with subsection (c) for
                    such award year.
                        ``(B) The Secretary shall allocate not more than
                    \1/4\ of such funds for each award year by allocating
                    to each participating institution an amount equal to
                    the low tuition incentive amount of the institution, as
                    determined in accordance with subsection (d).
                        ``(C) The Secretary shall allocate not more than
                    \1/4\ of such funds for each award year by allocating
                    to each participating institution an amount which bears
                    the same ratio to the funds allocated under this
                    subparagraph as the ratio determined in accordance with
                    subsection (e) for the calculation of the Federal Pell
                    Grant and degree recipient amount of the institution.
                ``(2) No funds to non-participating institutions.--The
            Secretary shall not make funds available under this subsection
            to any eligible institution that is not a participating
            institution. The adjusted self-help need amount (determined in
            accordance with subsection (c)) of an eligible institution that
            is not a participating institution shall not be made available
            to any other institution.
        ``(c) Adjusted Self-help Need Amount.--For the purposes of
    subsection (b)(1)(A), the Secretary shall calculate the adjusted self-
    help need amount of each eligible institution for an award year as
    follows:
                ``(1) Use of base self-help need amounts.--
                        ``(A) In general.--Except as provided in paragraphs
                    (2), (3), and (4), the adjusted self-help need amount
                    of each eligible institution shall be the institution's
                    base self-help need amount, which is the sum of--
                                ``(i) the self-help need of the
                            institution's eligible undergraduate students
                            for such award year; and
                                ``(ii) the self-help need of the
                            institution's eligible graduate and
                            professional students for such award year.
                        ``(B) Undergraduate student self-help need.--To
                    determine the self-help need of an institution's
                    eligible undergraduate students, the Secretary shall
                    determine the sum of each eligible undergraduate
                    student's average cost of attendance for the second
                    preceding award year less each such student's expected
                    family contribution (computed in accordance with part
                    F) for the second preceding award year, except that,
                    for each such eligible undergraduate student, the
                    amount computed by such subtraction shall not be less
                    than zero or more than the lesser of--
                                ``(i) 25 percent of the average cost of
                            attendance with respect to such eligible
                            student; or
                                ``(ii) $5,500.
                        ``(C) Graduate and professional student self-help
                    need.--To determine the self-help need of an
                    institution's eligible graduate and professional
                    students, the Secretary shall determine the sum of each
                    eligible graduate and professional student's average
                    cost of attendance for the second preceding award year
                    less each such student's expected family contribution
                    (computed in accordance with part F) for such second
                    preceding award year, except that, for each such
                    eligible graduate and professional student, the amount
                    computed by such subtraction shall not be less than
                    zero or more than $8,000.
                ``(2) Ratable reduction adjustments.--If the sum of the
            base self-help need amounts of all eligible institutions for an
            award year as determined under paragraph (1) exceeds \1/2\ of
            the annual loan authority under subsection (b) for such award
            year, the Secretary shall ratably reduce the base self-help
            need amounts of all eligible institutions until the sum of such
            amounts is equal to the amount that is \1/2\ of the annual loan
            authority under subsection (b).
                ``(3) Required minimum amount.--Notwithstanding paragraph
            (2), the adjusted self-help need amount of each eligible
            institution shall not be less than the average of the
            institution's total principal amount of loans made under this
            part for each of the 5 most recent award years.
                ``(4) Additional adjustments.--If the Secretary determines
            that a ratable reduction under paragraph (2) results in the
            adjusted self-help need amount of any eligible institution
            being reduced below the minimum amount required under paragraph
            (3), the Secretary shall--
                        ``(A) for each institution for which the minimum
                    amount under paragraph (3) is not satisfied, increase
                    the adjusted self-help need amount to the amount of the
                    required minimum under such subparagraph; and
                        ``(B) ratably reduce the adjusted self-help need
                    amounts of all eligible institutions not described in
                    subparagraph (A) until the sum of the adjusted self-
                    help need amounts of all eligible institutions is equal
                    to the amount that is \1/2\ of the annual loan
                    authority under subsection (b).
        ``(d) Low Tuition Incentive Amount.--
                ``(1) In general.--For purposes of subsection (b)(1)(B),
            the Secretary shall determine the low tuition incentive amount
            for each participating institution for each award year, by
            calculating for each such institution the sum of--
                        ``(A) the total amount, if any (but not less than
                    zero), by which--
                                ``(i) the average tuition and required fees
                            for the institution's sector for the second
                            preceding award year; exceeds
                                ``(ii) the tuition and required fees for
                            the second preceding award year for each
                            undergraduate and graduate student attending
                            the institution who had financial need (as
                            determined under part F); plus
                        ``(B) the total amount, if any (but not less than
                    zero), by which--
                                ``(i) the total amount for the second
                            preceding award year of non-Federal grant aid
                            provided to meet the financial need of all
                            undergraduate students attending the
                            institution (as determined without regard to
                            financial aid not received under this title);
                            exceeds
                                ``(ii) the total amount for the second
                            preceding award year, if any, by which--
                                        ``(I) the tuition and required fees
                                    of each such student with such
                                    financial need; exceeds
                                        ``(II) the average tuition and
                                    required fees for the institution's
                                    sector.
                ``(2) Ratable reduction.--If the sum of the low tuition
            incentive amounts of all participating institutions for an
            award year as determined under paragraph (1) exceeds \1/4\ of
            the annual loan authority under subsection (b) for such award
            year, the Secretary shall ratably reduce the low tuition
            incentive amounts of all participating institutions until the
            sum of such amounts is equal to the amount that is \1/4\ of the
            annual loan authority under subsection (b).
        ``(e) Federal Pell Grant and Degree Recipient Amount.--For purposes
    of subsection (b)(1)(C), the Secretary shall determine the Federal Pell
    Grant and degree recipient amount for each participating institution
    for each award year, by calculating for each such institution the ratio
    of--
                ``(1) the number of students who, during the most recent
            year for which data are available, obtained an associate's
            degree or other postsecondary degree from such participating
            institution and, prior to obtaining such degree, received a
            Federal Pell Grant for attendance at any institution of higher
            education; to
                ``(2) the sum of the number of students who, during the
            most recent year for which data are available, obtained an
            associate's degree or other postsecondary degree from each
            participating institution and, prior to obtaining such degree,
            received a Federal Pell Grant for attendance at any institution
            of higher education.
        ``(f) Definitions.--As used in this section:
                ``(1) Annual loan authority.--The term `annual loan
            authority' means the total original principal amount of loans
            that may be allocated and made available for an award year to
            make Federal Direct Perkins Loans under section 455A.
                ``(2) Average cost of attendance.--
                        ``(A) In general.--The term `average cost of
                    attendance' means the average of the attendance costs
                    for undergraduate students and for graduate and
                    professional students, respectively, for the second
                    preceding award year which shall include--
                                ``(i) tuition and required fees determined
                            in accordance with subparagraph (B);
                                ``(ii) standard living expenses determined
                            in accordance with subparagraph (C); and
                                ``(iii) books and supplies determined in
                            accordance with subparagraph (D).
                        ``(B) Tuition and required fees.--The average
                    undergraduate and graduate and professional tuition and
                    required fees described in subparagraph (A)(i) shall be
                    computed on the basis of information reported by the
                    institution to the Secretary, which shall include--
                                ``(i) total revenue received by the
                            institution from undergraduate and graduate and
                            professional students, respectively, for
                            tuition and required fees for the second
                            preceding award year; and
                                ``(ii) the institution's full-time
                            equivalent enrollment of undergraduate and
                            graduate and professional students,
                            respectively, for such second preceding award
                            year.
                        ``(C) Standard living expenses.--The standard
                    living expense described in subparagraph (A)(ii) is
                    equal to the allowance, determined by an institution,
                    for room and board costs incurred by a student, as
                    computed in accordance with part F for the second
                    preceding award year.
                        ``(D) Books and supplies.--The allowance for books
                    and supplies described in subparagraph (A)(iii) is
                    equal to the allowance, determined by an institution,
                    for books, supplies, transportation, and miscellaneous
                    personal expenses, including a reasonable allowance for
                    the documented rental or purchase of a personal
                    computer, as computed in accordance with part F for the
                    second preceding award year.
                ``(3) Average tuition and required fees for the
            institution's sector.--The term `average tuition and required
            fees for the institution's sector' shall be determined by the
            Secretary for each of the categories described in section
            132(d).
                ``(4) Eligible institution.--The term `eligible
            institution' means an institution of higher education that
            participates in the Federal Direct Stafford Loan Program.
                ``(5) Participating institution.--The term `participating
            institution' means an institution of higher education that has
            an agreement under section 463(f).
                ``(6) Sector.--The term `sector' means each of the
            categories described in section 132(d).''.

    SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

        (a) Amendments.--Section 463 (20 U.S.C. 1087cc) is amended--
                (1) in subsection (a)--
                        (A) in the heading, by inserting ``for Loans Made
                    Before July 1, 2010'' after ``Agreements'';
                        (B) in paragraph (3)(A), by inserting ``before July
                    1, 2010'' after ``students'';
                        (C) in paragraph (4), by striking ``thereon--'' and
                    all that follows and inserting ``thereon, if the
                    institution has failed to maintain an acceptable
                    collection record with respect to such loan, as
                    determined by the Secretary in accordance with criteria
                    established by regulation, the Secretary may require
                    the institution to assign such note or agreement to the
                    Secretary, without recompense;''; and
                        (D) in paragraph (5), by striking ``and the
                    Secretary shall apportion'' and all that follows
                    through ``in accordance with section 462'' and
                    inserting ``and the Secretary shall return a portion of
                    funds from loan repayments to the institution as
                    specified in section 466(b)'';
                (2) by amending subsection (b) to read as follows:
        ``(b) Administrative Expenses.--An institution that has entered
    into an agreement under subsection (a) shall be entitled, for each
    fiscal year during which it services student loans from a student loan
    fund established under such agreement, to a payment in lieu of
    reimbursement for its expenses in servicing student loans made before
    July 1, 2010. Such payment shall be equal to 0.50 percent of the
    outstanding principal and interest balance of such loans being serviced
    by the institution as of September 30 of each fiscal year.''; and
                (3) by adding at the end the following:
        ``(f) Contents of Agreements for Loans Made on or After July 1,
    2010.--An agreement with any institution of higher education that
    elects to participate in the Federal Direct Perkins Loan program under
    section 455A shall provide--
                ``(1) for the establishment and maintenance of a Direct
            Perkins Loan program at the institution under which the
            institution shall use loan authority allocated under section
            462A to make loans to eligible students attending the
            institution;
                ``(2) that the institution, unless otherwise specified in
            this subsection, shall operate the program consistent with the
            requirements of agreements established under section 454;
                ``(3) that the institution will pay matching funds,
            quarterly, in an amount agreed to by the institution and the
            Secretary, to an escrow account approved by the Secretary, for
            the purpose of providing loan benefits to borrowers;
                ``(4) that if the institution fails to meet the
            requirements of paragraph (3), the Secretary shall suspend or
            terminate the institution's eligibility to make Federal Direct
            Perkins Loans under section 455A until such time as the
            Secretary determines, in accordance with section 498, that the
            institution has met the requirements of such paragraph; and
                ``(5) that if the institution ceases to be an eligible
            institution within the meaning of section 435(a) by reason of
            having a cohort default rate that exceeds the threshold
            percentage specified paragraph (2) of such section, the
            Secretary shall suspend or terminate the institution's
            eligibility to make Federal Direct Perkins Loans under section
            455A unless and until the institution would qualify for a
            resumption of eligible institution status under such
            section.''.
        (b) Effective Date.--The amendments made by paragraph (2) of
    subsection (a) shall take effect on October 1, 2010.

    SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.

        Section 463A (20 U.S.C. 1087cc-1) is amended--
                (1) in subsection (a), by striking ``Each institution'' and
            inserting ``For loans made before July 1, 2010, each
            institution''; and
                (2) in subsection (b), by striking ``Each institution'' and
            inserting ``For loans made before July 1, 2010, each
            institution''.

    SEC. 227. TERMS OF LOANS.

        (a) Section 464 (20 U.S.C. 1087dd) is amended--
                (1) in subsection (a)(1), by striking ``section 463'' and
            inserting ``section 463(a)'';
                (2) in subsection (b)(1), by inserting ``made before July
            1, 2010,'' after ``A loan'';
                (3) in subsection (c)--
                        (A) in paragraph (1), by inserting ``made before
                    July 1, 2010,'' after ``a loan'';
                        (B) in paragraph (2)--
                                (i) in subparagraph (A), by inserting
                            ``made before July 1, 2010,'' after ``any
                            loan''; and
                                (ii) in subparagraph (B), by inserting
                            ``made before July 1, 2010,'' after ``any
                            loan'';
                        (C) in paragraph (3)(B), by inserting ``for a loan
                    made before July 1, 2010,'' after ``during the
                    repayment period'';
                        (D) in paragraph (4), by inserting ``before July 1,
                    2010,'' after ``for a loan made'';
                        (E) in paragraph (5), by striking ``The
                    institution'' and inserting ``For loans made before
                    July 1, 2010, the institution''; and
                        (F) in paragraph (6), by inserting ``made before
                    July 1, 2010,'' after ``of loans'';
                (4) in subsection (d), by inserting ``made before July 1,
            2010,'' before ``from the student loan fund'';
                (5) in subsection (e), by inserting ``with respect to loans
            made before July 1, 2010, and'' before ``as documented in
            accordance with paragraph (2),'';
                (6) by repealing subsection (f);
                (7) in subsection (g)(1), by inserting ``and before July 1,
            2010,'' after ``January 1, 1986,'';
                (8) in subsection (h)--
                        (A) in paragraph (1)(A) by inserting ``before July
                    1, 2010,'' after ``made under this part''; and
                        (B) in paragraph (2), by inserting ``before July 1,
                    2010,'' after ``under this part''; and
                (9) in subsection (j)(1), by inserting ``before July 1,
            2010,'' after ``under this part''.

    SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

        (a) Section 465 (20 U.S.C. 1087ee) is amended--
                (1) in subsection (a), by inserting ``and before July 1,
            2010,'' after ``June 30, 1972,''; and
                (2) by amending subsection (b) to read as follows:
        ``(b) Reimbursement for Cancellations.--
                ``(1) Assigned loans.--In the case of loans made under this
            part before July 1, 2010, and that are assigned to the
            Secretary, the Secretary shall, from amounts repaid each
            quarter on assigned Perkins Loans made before July 1, 2010, pay
            to each institution for each quarter an amount equal to--
                        ``(A) the aggregate of the amounts of loans from
                    its student loan fund that are canceled pursuant to
                    this section for such quarter, minus
                        ``(B) an amount equal to the aggregate of the
                    amounts of any such loans so canceled that were made
                    from Federal capital contributions to its student loan
                    fund.
                ``(2) Retained loans.--In the case of loans made under this
            part before July 1, 2010, and that are retained by the
            institution for servicing, the institution shall deduct from
            loan repayments owed to the Secretary under section 466, an
            amount equal to--
                        ``(A) the aggregate of the amounts of loans from
                    its student loan fund that are canceled pursuant to
                    this section for such quarter, minus
                        ``(B) an amount equal to the aggregate of the
                    amounts of any such loans so canceled that were made
                    from Federal capital contributions to its student loan
                    fund.''.
        (b) Section 466 (20 U.S.C. 1087ff) is amended to read as follows:

    ``SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

        ``(a) Capital Distribution.--Beginning July 1, 2010, there shall be
    a capital distribution of the balance of the student loan fund
    established under this part by each institution of higher education as
    follows:
                ``(1) For the quarter beginning July 1, 2010, the Secretary
            shall first be paid, no later than September 30, 2010, an
            amount that bears the same ratio to the cash balance in such
            fund at the close of June 30, 2010, as the total amount of the
            Federal capital contributions to such fund by the Secretary
            under this part bears to--
                        ``(A) the sum of such Federal contributions and the
                    institution's capital contributions to such fund, less
                        ``(B) an amount equal to--
                                ``(i) the institution's outstanding
                            administrative costs as calculated under
                            section 463(b),
                                ``(ii) outstanding charges assessed under
                            section 464(c)(1)(H), and
                                ``(iii) outstanding loan cancellation costs
                            incurred under section 465.
                ``(2) At the end of each quarter subsequent to the quarter
            ending September 30, 2010, the Secretary shall first be paid an
            amount that bears the same ratio to the cash balance in such
            fund at the close of the preceding quarter, as the total amount
            of the Federal capital contributions to such fund by the
            Secretary under this part bears to--
                        ``(A) the sum of such Federal contributions and the
                    institution's capital contributions to such fund, less
                        ``(B) an amount equal to--
                                ``(i) the institution's administrative
                            costs incurred for that quarter as calculated
                            under section 463(b),
                                ``(ii) charges assessed for that quarter
                            under section 464(c)(1)(H), and
                                ``(iii) loan cancellation costs incurred
                            for that quarter under section 465.
                ``(3)(A) The Secretary shall calculate the amounts due to
            the Secretary under paragraph (1) (adjusted in accordance with
            subparagraph (B), as appropriate) and paragraph (2) and shall
            promptly inform the institution of such calculated amounts.
                ``(B) In the event that, prior to the date of enactment of
            the Student Aid and Fiscal Responsibility Act of 2009, an
            institution made a short-term, interest-free loan to the
            institution's student loan fund established under this part in
            anticipation of collections or receipt of Federal capital
            contributions, and the institution demonstrates to the
            Secretary, on or before June 30, 2010, that such loan will
            still be outstanding after June 30, 2010, the Secretary shall
            subtract the amount of such outstanding loan from the cash
            balance of the institution's student loan fund that is used to
            calculate the amount due to the Secretary under paragraph (1).
            An adjustment of an amount due to the Secretary under this
            subparagraph shall be made by the Secretary on a case-by-case
            basis.
                ``(4) Any remaining balance at the end of a quarter after a
            payment under paragraph (1) or (2) shall be retained by the
            institution for use at its discretion. Any balance so retained
            shall be withdrawn from the student loan fund and shall not be
            counted in calculating amounts owed to the Secretary for
            subsequent quarters.
                ``(5) Each institution shall make the quarterly payments to
            the Secretary described in paragraph (2) until all outstanding
            Federal Perkins Loans at that institution have been assigned to
            the Secretary and there are no funds remaining in the
            institution's student loan fund.
                ``(6) In the event that the institution's administrative
            costs, charges, and cancellation costs described in paragraph
            (2) for a quarter exceed the amount owed to the Secretary under
            paragraphs (1) and (2) for that quarter, no payment shall be
            due to the Secretary from the institution for that quarter and
            the Secretary shall pay the institution, from funds realized
            from the collection of assigned Federal Perkins Loans made
            before July 1, 2010, an amount that, when combined with the
            amount retained by the institution under paragraphs (1) and
            (2), equals the full amount of such administrative costs,
            charges, and cancellation costs.
        ``(b) Assignment of Outstanding Loans.--Beginning July 1, 2010, an
    institution of higher education may assign all outstanding loans made
    under this part before July 1, 2010, to the Secretary, consistent with
    the requirements of section 463(a)(5). In collecting loans so assigned,
    the Secretary shall pay an institution an amount that constitutes the
    same fraction of such collections as the fraction of the cash balance
    that the institution retains under subsection (a)(2), but determining
    such fraction without regard to subparagraph (B)(i) of such
    subsection.''.

    SEC. 229. IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.

        (a) Amendments.--Section 487(d) (20 U.S.C. 1094(d)) is amended--
                (1) in paragraph (1)(E), by striking ``July 1, 2011'' and
            inserting ``July 1, 2012'';
                (2) in paragraph (1)(F)--
                        (A) by redesignating clauses (iii), (iv), and (v)
                    as clauses (iv), (v), and (vi), respectively; and
                        (B) by inserting after clause (ii) the following
                    new clause:
                                ``(iii) for the period beginning July 1,
                            2010, and ending July 1, 2012, the amount of
                            funds the institution received from loans
                            disbursed under section 455A;'';.
                (3) in paragraph (2)(A), by striking ``two consecutive''
            and inserting ``three consecutive''; and
                (4) in paragraph (2)(B)--
                        (A) by striking ``any institutional fiscal year''
                    and inserting ``two consecutive institutional fiscal
                    years'';
                        (B) by striking ``the two institutional fiscal
                    years after the institutional fiscal year'' and
                    inserting ``the institutional fiscal year after the
                    second consecutive institutional fiscal year''; and
                        (C) by striking ``two consecutive'' in clause (ii)
                    of such paragraph and inserting ``three consecutive''.
        (b) Temporary Effect.--The amendments made by paragraphs (3) and
    (4) of subsection (a)--
                (1) shall take effect on the date of enactment of this Act;
            and
                (2) shall cease to be effective on July 1, 2012.

    SEC. 230. ADMINISTRATIVE EXPENSES.

        Section 489(a) (20 U.S.C. 1096(a)) is amended--
                (1) in the second sentence, by striking ``or under part E
            of this title''; and
                (2) in the third sentence--
                        (A) by inserting ``and'' after ``subpart 3 of part
                    A,''; and
                        (B) by striking ``compensation of students,'' and
                    all that follows through the period and inserting
                    ``compensation of students.''.

                TITLE III--MODERNIZATION, RENOVATION, AND REPAIR

                 Subtitle A--Elementary and Secondary Education

    SEC. 301. DEFINITIONS.

        In this subtitle:
                (1) The term ``Bureau-funded school'' has the meaning given
            such term in section 1141 of the Education Amendments of 1978
            (25 U.S.C. 2021).
                (2) The term ``charter school'' has the meaning given such
            term in section 5210 of the Elementary and Secondary Education
            Act of 1965 (20 U.S.C. 7221i).
                (3) The term ``CHPS Criteria'' means the green building
            rating program developed by the Collaborative for High
            Performance Schools.
                (4) The term ``Energy Star'' means the Energy Star program
            of the United States Department of Energy and the United States
            Environmental Protection Agency.
                (5) The term ``Green Globes'' means the Green Building
            Initiative environmental design and rating system referred to
            as Green Globes.
                (6) The term ``LEED Green Building Rating System'' means
            the United States Green Building Council Leadership in Energy
            and Environmental Design green building rating standard
            referred to as LEED Green Building Rating System.
                (7) The term ``local educational agency''--
                        (A) has the meaning given such term in section 9101
                    of the Elementary and Secondary Education Act of 1965
                    (20 U.S.C. 7801);
                        (B) includes any public charter school that
                    constitutes a local educational agency under State law;
                    and
                        (C) includes the Recovery School District of
                    Louisiana.
                (8) The term ``outlying area''--
                        (A) means the United States Virgin Islands, Guam,
                    American Samoa, and the Commonwealth of the Northern
                    Mariana Islands; and
                        (B) includes the Republic of Palau.
                (9) The term ``public school facilities'' means existing
            public elementary or secondary school facilities, including
            public charter school facilities and other existing facilities
            planned for adaptive reuse as public charter school facilities.
                (10) The term ``Secretary'' means the Secretary of
            Education.
                (11) The term ``State'' means each of the 50 States, the
            District of Columbia, and the Commonwealth of Puerto Rico.

     CHAPTER 1--GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF PUBLIC
                               SCHOOL FACILITIES

    SEC. 311. PURPOSE.

        Grants under this chapter shall be for the purpose of modernizing,
    renovating, or repairing public school facilities (including early
    learning facilities, as appropriate), based on the need of the
    facilities for such improvements, to ensure that public school
    facilities are safe, healthy, high-performing, and technologically up-
    to-date.

    SEC. 312. ALLOCATION OF FUNDS.

        (a) Reservation.--
                (1) In general.--From the amount appropriated to carry out
            this chapter for each fiscal year pursuant to section 345(a),
            the Secretary shall reserve 2 percent of such amount,
            consistent with the purpose described in section 311--
                        (A) to provide assistance to the outlying areas;
                    and
                        (B) for payments to the Secretary of the Interior
                    to provide assistance to Bureau-funded schools.
                (2) Use of reserved funds.--In each fiscal year, the amount
            reserved under paragraph (1) shall be divided between the uses
            described in subparagraphs (A) and (B) of such paragraph in the
            same proportion as the amount reserved under section 1121(a) of
            the Elementary and Secondary Education Act of 1965 (20 U.S.C.
            6331(a)) is divided between the uses described in paragraphs
            (1) and (2) of such section 1121(a) in such fiscal year.
                (3) Distressed areas and natural disasters.--From the
            amount appropriated to carry out this chapter for each fiscal
            year pursuant to section 345(a), the Secretary shall reserve 5
            percent of such amount for grants to--
                        (A) local educational agencies serving geographic
                    areas with significant economic distress, to be used
                    consistent with the purpose described in section 311
                    and the allowable uses of funds described in section
                    313; and
                        (B) local educational agencies serving geographic
                    areas recovering from a natural disaster, to be used
                    consistent with the purpose described in section 321
                    and the allowable uses of funds described in section
                    323.
        (b) Allocation to States.--
                (1) State-by-state allocation.--Of the amount appropriated
            to carry out this chapter for each fiscal year pursuant to
            section 345(a), and not reserved under subsection (a), each
            State shall be allocated an amount in proportion to the amount
            received by all local educational agencies in the State under
            part A of title I of the Elementary and Secondary Education Act
            of 1965 (20 U.S.C. 6311 et seq.) for the previous fiscal year
            relative to the total amount received by all local educational
            agencies in every State under such part for such fiscal year.
                (2) State administration.--A State may reserve up to 1
            percent of its allocation under paragraph (1) to carry out its
            responsibilities under this chapter, which include--
                        (A) providing technical assistance to local
                    educational agencies;
                        (B) developing an online, publicly searchable
                    database that includes an inventory of public school
                    facilities in the State, including for each such
                    facility, its design, condition, modernization,
                    renovation and repair needs, utilization, energy use,
                    and carbon footprint; and
                        (C) creating voluntary guidelines for high-
                    performing school buildings, including guidelines
                    concerning the following:
                                (i) Site location, storm water management,
                            outdoor surfaces, outdoor lighting, and
                            transportation, including public transit and
                            pedestrian and bicycle accessability.
                                (ii) Outdoor water systems, landscaping to
                            minimize water use, including elimination of
                            irrigation systems for landscaping, and indoor
                            water use reduction.
                                (iii) Energy efficiency (including minimum
                            and superior standards, such as for heating,
                            ventilation, and air conditioning systems), use
                            of alternative energy sources, commissioning,
                            and training.
                                (iv) Use of durable, sustainable materials
                            and waste reduction.
                                (v) Indoor environmental quality, such as
                            day lighting in classrooms, lighting quality,
                            indoor air quality (including with reference to
                            reducing the incidence and effects of asthma
                            and other respiratory illnesses), acoustics,
                            and thermal comfort.
                                (vi) Operations and management, such as use
                            of energy-efficient equipment, indoor
                            environmental management plan, maintenance
                            plan, and pest management.
                (3) Grants to local educational agencies.--From the amount
            allocated to a State under paragraph (1), each eligible local
            educational agency in the State shall receive an amount in
            proportion to the amount received by such local educational
            agency under part A of title I of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 6311 et seq.) for the previous
            fiscal year relative to the total amount received by all local
            educational agencies in the State under such part for such
            fiscal year, except that no local educational agency that
            received funds under such part for such fiscal year shall
            receive a grant of less than $5,000 in any fiscal year under
            this chapter.
                (4) Special rule.--Section 1122(c)(3) of the Elementary and
            Secondary Education Act of 1965 (20 U.S.C. 6332(c)(3)) shall
            not apply to paragraph (1) or (3).
        (c) Special Rules.--
                (1) Distributions by secretary.--The Secretary shall make
            and distribute the reservations and allocations described in
            subsections (a) and (b) not later than 120 days after an
            appropriation of funds for this chapter is made.
                (2) Distributions by states.--A State shall make and
            distribute the allocations described in subsection (b)(3)
            within 90 days of receiving such funds from the Secretary.

    SEC. 313. ALLOWABLE USES OF FUNDS.

        A local educational agency receiving a grant under this chapter
    shall use the grant for modernization, renovation, or repair of public
    school facilities (including early learning facilities, as
    appropriate), including--
                (1) repair, replacement, or installation of roofs,
            including extensive, intensive or semi-intensive green roofs,
            electrical wiring, water supply and plumbing systems, sewage
            systems, storm water runoff systems, lighting systems, building
            envelope, windows, ceilings, flooring, or doors, including
            security doors;
                (2) repair, replacement, or installation of heating,
            ventilation, or air conditioning systems, including insulation,
            and conducting indoor air quality assessments;
                (3) compliance with fire, health, seismic, and safety
            codes, including professional installation of fire and life
            safety alarms, and modernizations, renovations, and repairs
            that ensure that schools are prepared for emergencies, such as
            improving building infrastructure to accommodate security
            measures and installing or upgrading technology to ensure that
            schools are able to respond to emergencies such as acts of
            terrorism, campus violence, and natural disasters;
                (4) retrofitting necessary to increase the energy
            efficiency and water efficiency of public school facilities;
                (5) modifications necessary to make facilities accessible
            in compliance with the Americans with Disabilities Act of 1990
            (42 U.S.C. 12101 et seq.) and section 504 of the Rehabilitation
            Act of 1973 (29 U.S.C. 794);
                (6) abatement, removal, or interim controls of asbestos,
            polychlorinated biphenyls, mold, mildew, lead-based hazards,
            including lead-based paint hazards, or a proven carcinogen;
                (7) measures designed to reduce or eliminate human exposure
            to classroom noise and environmental noise pollution;
                (8) modernization, renovation, or repair necessary to
            reduce the consumption of coal, electricity, land, natural gas,
            oil, or water;
                (9) installation or upgrading of educational technology
            infrastructure;
                (10) modernization, renovation, or repair of science and
            engineering laboratories, libraries, and career and technical
            education facilities, and improvements to building
            infrastructure to accommodate bicycle and pedestrian access;
                (11) installation or upgrading of renewable energy
            generation and heating systems, including solar, photovoltaic,
            wind, biomass (including wood pellet and woody biomass), waste-
            to-energy, and solar-thermal and geothermal systems, and for
            energy audits;
                (12) measures designed to reduce or eliminate human
            exposure to airborne particles such as dust, sand, and pollens;
                (13) creating greenhouses, gardens (including trees), and
            other facilities for environmental, scientific, or other
            educational purposes, or to produce energy savings;
                (14) modernizing, renovating, or repairing physical
            education facilities for students, including upgrading or
            installing recreational structures made from post-consumer
            recovered materials in accordance with the comprehensive
            procurement guidelines prepared by the Administrator of the
            Environmental Protection Agency under section 6002(e) of the
            Solid Waste Disposal Act (42 U.S.C. 6962(e));
                (15) other modernization, renovation, or repair of public
            school facilities to--
                        (A) improve teachers' ability to teach and
                    students' ability to learn;
                        (B) ensure the health and safety of students and
                    staff;
                        (C) make them more energy efficient; or
                        (D) reduce class size; and
                (16) required environmental remediation related to
            modernization, renovation, or repair described in paragraphs
            (1) through (15).

    SEC. 314. PRIORITY PROJECTS.

        In selecting a project under section 313, a local educational
    agency may give priority to projects involving the abatement, removal,
    or interim controls of asbestos, polychlorinated biphenyls, mold,
    mildew, lead-based hazards, including lead-based paint hazards, or a
    proven carcinogen.

     CHAPTER 2--SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND ALABAMA

    SEC. 321. PURPOSE.

        Grants under this chapter shall be for the purpose of modernizing,
    renovating, repairing, or constructing public school facilities,
    including, where applicable, early learning facilities, based on the
    need for such improvements or construction, to ensure that public
    school facilities are safe, healthy, high-performing, and
    technologically up-to-date.

    SEC. 322. ALLOCATION TO LOCAL EDUCATIONAL AGENCIES.

        (a) In General.--Of the amount appropriated to carry out this
    chapter for each fiscal year pursuant to section 345(b), the Secretary
    shall allocate to local educational agencies in Louisiana, Mississippi,
    and Alabama an amount equal to the infrastructure damage inflicted on
    public school facilities in each such district by Hurricane Katrina or
    Hurricane Rita in 2005 relative to the total of such infrastructure
    damage so inflicted in all such districts, combined.
        (b) Distribution by Secretary.--The Secretary shall determine and
    distribute the allocations described in subsection (a) not later than
    120 days after an appropriation of funds for this chapter is made.

    SEC. 323. ALLOWABLE USES OF FUNDS.

        A local educational agency receiving a grant under this chapter
    shall use the grant for one or more of the activities described in
    section 313, except that an agency receiving a grant under this chapter
    also may use the grant for the construction of new public school
    facilities.

                         CHAPTER 3--GENERAL PROVISIONS

    SEC. 331. IMPERMISSIBLE USES OF FUNDS.

        No funds received under this subtitle may be used for--
                (1) payment of maintenance costs, including routine repairs
            classified as current expenditures under State or local law;
                (2) stadiums or other facilities primarily used for
            athletic contests or exhibitions or other events for which
            admission is charged to the general public;
                (3) improvement or construction of facilities the purpose
            of which is not the education of children, including central
            office administration or operations or logistical support
            facilities; or
                (4) purchasing carbon offsets.

    SEC. 332. SUPPLEMENT, NOT SUPPLANT.

        A local educational agency receiving a grant under this subtitle
    shall use such Federal funds only to supplement and not supplant the
    amount of funds that would, in the absence of such Federal funds, be
    available for modernization, renovation, repair, and construction of
    public school facilities.

    SEC. 333. PROHIBITION REGARDING STATE AID.

        A State shall not take into consideration payments under this
    subtitle in determining the eligibility of any local educational agency
    in that State for State aid, or the amount of State aid, with respect
    to free public education of children.

    SEC. 334. MAINTENANCE OF EFFORT.

        (a) In General.--A local educational agency may receive a grant
    under this subtitle for any fiscal year only if either the combined
    fiscal effort per student or the aggregate expenditures of the agency
    and the State involved with respect to the provision of free public
    education by the agency for the preceding fiscal year was not less than
    90 percent of the combined fiscal effort or aggregate expenditures for
    the second preceding fiscal year.
        (b) Reduction in Case of Failure To Meet Maintenance of Effort
    Requirement.--
                (1) In general.--The State educational agency shall reduce
            the amount of a local educational agency's grant in any fiscal
            year in the exact proportion by which a local educational
            agency fails to meet the requirement of subsection (a) by
            falling below 90 percent of both the combined fiscal effort per
            student and aggregate expenditures (using the measure most
            favorable to the local agency).
                (2) Special rule.--No such lesser amount shall be used for
            computing the effort required under subsection (a) for
            subsequent years.
        (c) Waiver.--The Secretary shall waive the requirements of this
    section if the Secretary determines that a waiver would be equitable
    due to--
                (1) exceptional or uncontrollable circumstances, such as a
            natural disaster; or
                (2) a precipitous decline in the financial resources of the
            local educational agency.

    SEC. 335. SPECIAL RULE ON CONTRACTING.

        Each local educational agency receiving a grant under this subtitle
    shall ensure that, if the agency carries out modernization, renovation,
    repair, or construction through a contract, the process for any such
    contract ensures the maximum number of qualified bidders, including
    local, small, minority, and women- and veteran-owned businesses,
    through full and open competition.

    SEC. 336. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS.

        (a) In General.--None of the funds appropriated or otherwise made
    available by this subtitle may be used for a project for the
    modernization, renovation, repair, or construction of a public school
    facility unless all of the iron, steel, and manufactured goods used in
    the project are produced in the United States.
        (b) Exceptions.--Subsection (a) shall not apply in any case or
    category of cases in which the Secretary finds that--
                (1) applying subsection (a) would be inconsistent with the
            public interest;
                (2) iron, steel, and the relevant manufactured goods are
            not produced in the United States in sufficient and reasonably
            available quantities and of a satisfactory quality; or
                (3) inclusion of iron, steel, and manufactured goods
            produced in the United States will increase the cost of the
            overall project by more than 25 percent.
        (c) Publication of Justification.--If the Secretary determines that
    it is necessary to waive the application of subsection (a) based on a
    finding under subsection (b), the Secretary shall publish in the
    Federal Register a detailed written justification of the determination.
        (d) Construction.--This section shall be applied in a manner
    consistent with United States obligations under international
    agreements.

    SEC. 337. LABOR STANDARDS.

        The grant programs under this subtitle are applicable programs (as
    that term is defined in section 400 of the General Education Provisions
    Act (20 U.S.C. 1221)) subject to section 439 of such Act (20 U.S.C.
    1232b).

    SEC. 338. CHARTER SCHOOLS.

        (a) In General.--A local educational agency receiving an allocation
    under this subtitle shall reserve an amount of that allocation for
    charter schools within its jurisdiction for modernization, renovation,
    repair, and construction of charter school facilities.
        (b) Determination of Reserved Amount.--The amount to be reserved by
    a local educational agency under subsection (a) shall be determined
    based on the combined percentage of students counted under section
    1113(a)(5) of the Elementary and Secondary Education Act of 1965 (20
    U.S.C. 6313(a)(5)) in the schools of the agency who--
                (1) are enrolled in charter schools; and
                (2) the local educational agency, in consultation with the
            authorized public chartering agency, expects to be enrolled,
            during the year with respect to which the reservation is made,
            in charter schools that are scheduled to commence operation
            during such year.
        (c) School Share.--Individual charter schools shall receive a share
    of the amount reserved under subsection (a) based on the need of each
    school for modernization, renovation, repair, or construction, as
    determined by the local educational agency in consultation with charter
    school administrators.
        (d) Excess Funds.--After the consultation described in subsection
    (c), if the local educational agency determines that the amount of
    funds reserved under subsection (a) exceeds the modernization,
    renovation, repair, and construction needs of charter schools within
    the local educational agency's jurisdiction, the agency may use the
    excess funds for other public school facility modernization,
    renovation, repair, or construction consistent with this subtitle and
    is not required to carry over such funds to the following fiscal year
    for use for charter schools.

    SEC. 339. GREEN SCHOOLS.

        (a) In General.--Of the funds appropriated for a given fiscal year
    and made available to a local educational agency to carry out this
    subtitle, the local educational agency shall use not less than the
    applicable percentage (described in subsection (b)) of such funds for
    public school modernization, renovation, repair, or construction that
    are certified, verified, or consistent with any applicable provisions
    of--
                (1) the LEED Green Building Rating System;
                (2) Energy Star;
                (3) the CHPS Criteria;
                (4) Green Globes; or
                (5) an equivalent program adopted by the State, or another
            jurisdiction with authority over the local educational agency,
            that includes a verifiable method to demonstrate compliance
            with such program.
        (b) Applicable Percentages.--The applicable percentage described in
    subsection (a) is--
                (1) for funds appropriated in fiscal year 2010, 50 percent;
            and
                (2) for funds appropriated in fiscal year 2011, 75 percent.
        (c) Rule of Construction.--Nothing in this section shall be
    construed to prohibit a local educational agency from using
    sustainable, domestic hardwood lumber as ascertained through the forest
    inventory and analysis program of the Forest Service of the Department
    of Agriculture under the Forest and Rangeland Renewable Resources
    Research Act of 1978 (16 U.S.C. 1641 et seq.) for public school
    modernization, renovation, repairs, or construction.
        (d) Technical Assistance.--The Secretary, in consultation with the
    Secretary of Energy and the Administrator of the Environmental
    Protection Agency, shall provide outreach and technical assistance to
    States and local educational agencies concerning the best practices in
    school modernization, renovation, repair, and construction, including
    those related to student academic achievement, student and staff
    health, energy efficiency, and environmental protection.

    SEC. 340. REPORTING.

        (a) Reports by Local Educational Agencies.--Local educational
    agencies receiving a grant under this subtitle shall annually compile a
    report describing the projects for which such funds were used,
    including--
                (1) the number and identity of public schools in the
            agency, including the number of charter schools, and for each
            school, the total number of students, and the number of
            students counted under section 1113(a)(5) of the Elementary and
            Secondary Education Act of 1965 (20 U.S.C. 6313(a)(5));
                (2) the total amount of funds received by the local
            educational agency under this subtitle, and for each public
            school in the agency, including each charter school, the amount
            of such funds expended, and the types of modernization,
            renovation, repair, or construction projects for which such
            funds were used;
                (3) the number of students impacted by such projects,
            including the number of students so impacted who are counted
            under section 1113(a)(5) of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 6313(a)(5));
                (4) the number of public schools in the agency with a
            metro-centric locale code of 41, 42, or 43 as determined by the
            National Center for Education Statistics and the percentage of
            funds received by the agency under chapter 1 or chapter 2 of
            this subtitle that were used for projects at such schools;
                (5) the number of public schools in the agency that are
            eligible for schoolwide programs under section 1114 of the
            Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314)
            and the percentage of funds received by the agency under
            chapter 1 or chapter 2 of this subtitle that were used for
            projects at such schools;
                (6) for each project--
                        (A) the cost;
                        (B) the standard described in section 339(a) with
                    which the use of the funds complied or, if the use of
                    funds did not comply with a standard described in
                    section 339(a), the reason such funds were not able to
                    be used in compliance with such standards and the
                    agency's efforts to use such funds in an
                    environmentally sound manner; and
                        (C) any demonstrable or expected benefits as a
                    result of the project (such as energy savings, improved
                    indoor environmental quality, student and staff health,
                    including the reduction of the incidence and effects of
                    asthma and other respiratory illnesses, and improved
                    climate for teaching and learning); and
                (7) the total number and amount of contracts awarded, and
            the number and amount of contracts awarded to local, small,
            minority, women, and veteran-owned businesses.
        (b) Availability of Reports.--A local educational agency shall--
                (1) submit the report described in subsection (a) to the
            State educational agency, which shall compile such information
            and report it annually to the Secretary; and
                (2) make the report described in subsection (a) publicly
            available, including on the agency's website.
        (c) Reports by Secretary.--Not later than March 31 of each fiscal
    year, the Secretary shall submit to the Committee on Education and
    Labor of the House of Representatives and the Committee on Health,
    Education, Labor and Pensions of the Senate, and make available on the
    Department of Education's website, a report on grants made under this
    subtitle, including the information from the reports described in
    subsection (b)(1).

    SEC. 341. SPECIAL RULES.

        Notwithstanding any other provision of this subtitle, none of the
    funds authorized by this subtitle may be--
                (1) used to employ workers in violation of section 274A of
            the Immigration and Nationality Act (8 U.S.C. 1324a); or
                (2) distributed to a local educational agency that does not
            have a policy that requires a criminal background check on all
            employees of the agency.

    SEC. 342. PROMOTION OF EMPLOYMENT EXPERIENCES.

        The Secretary of Education, in consultation with the Secretary of
    Labor, shall work with recipients of funds under this subtitle to
    promote appropriate opportunities to gain employment experience working
    on modernization, renovation, repair, and construction projects funded
    under this subtitle for--
                (1) participants in a YouthBuild program (as defined in
            section 173A of the Workforce Investment Act of 1998 (29 U.S.C.
            2918a));
                (2) individuals enrolled in the Job Corps program carried
            out under subtitle C of title I of the Workforce Investment Act
            of 1998 (29 U.S.C. 2881 et seq.);
                (3) individuals enrolled in a junior or community college
            (as defined in section 312(f) of the Higher Education Act of
            1965 (20 U.S.C. 1088(f))) certificate or degree program
            relating to projects described in section 339(a); and
                (4) participants in preapprenticeship programs that have
            direct linkages with apprenticeship programs that are
            registered with the Department of Labor or a State
            Apprenticeship Agency under the National Apprenticeship Act of
            1937 (29 U.S.C. 50 et seq.).

    SEC. 343. ADVISORY COUNCIL ON GREEN, HIGH-PERFORMING PUBLIC SCHOOL
                  FACILITIES.

        (a) Establishment of Advisory Council.--The Secretary shall
    establish an advisory council to be known as the ``Advisory Council on
    Green, High-Performing Public School Facilities'' (in this section
    referred to as the ``Advisory Council'') which shall be composed of--
                (1) appropriate officials from the Department of Education;
                (2) representatives of the academic, architectural,
            business, education, engineering, environmental, labor, and
            scientific communities; and
                (3) such other representatives as the Secretary deems
            appropriate.
        (b) Duties of Advisory Council.--
                (1) Advisory duties.--The Advisory Council shall advise the
            Secretary on the impact of green, high-performing schools, on--
                        (A) teaching and learning;
                        (B) health;
                        (C) energy costs;
                        (D) environmental impact; and
                        (E) other areas that the Secretary and the Advisory
                    Council deem appropriate.
                (2) Other duties.--The Advisory Council shall assist the
            Secretary in--
                        (A) making recommendations on Federal policies to
                    increase the number of green, high-performing schools;
                        (B) identifying Federal policies that are barriers
                    to helping States and local educational agencies make
                    green, high-performing schools;
                        (C) providing technical assistance and outreach to
                    States and local educational agencies under section
                    339(d); and
                        (D) providing the Secretary such other assistance
                    as the Secretary deems appropriate.
        (c) Consultation.--In carrying out its duties under subsection (b),
    the Advisory Council shall consult with the Chair of the Council on
    Environmental Quality and the heads of appropriate Federal agencies,
    including the Secretary of Commerce, the Secretary of Energy, the
    Secretary of Health and Human Services, the Secretary of Labor, the
    Administrator of the Environmental Protection Agency, and the
    Administrator of the General Services Administration (through the
    Office of Federal High-Performance Green Buildings).

    SEC. 344. EDUCATION REGARDING PROJECTS.

        A local educational agency receiving funds under this subtitle may
    encourage schools at which projects are undertaken with such funds to
    educate students about the project, including, as appropriate, the
    functioning of the project and its environmental, energy,
    sustainability, and other benefits.

    SEC. 345. AVAILABILITY OF FUNDS.

        (a) Chapter 1.--There are authorized to be appropriated, and there
    are appropriated, to carry out chapter 1 of this subtitle (in addition
    to any other amounts appropriated to carry out such chapter and out of
    any money in the Treasury not otherwise appropriated), $2,020,000,000
    for each of fiscal years 2010 and 2011.
        (b) Chapter 2.--There are authorized to be appropriated, and there
    are appropriated, to carry out chapter 2 of this subtitle (in addition
    to any other amounts appropriated to carry out such chapter and out of
    any money in the Treasury not otherwise appropriated), $30,000,000 for
    each of fiscal years 2010 and 2011.
        (c) Prohibition on Earmarks.--None of the funds appropriated under
    this section may be used for a Congressional earmark as defined in
    clause 9(d) of rule XXI of the Rules of the House of Representatives.

                          Subtitle B--Higher Education

    SEC. 351. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION AND
                  CONSTRUCTION.

        (a) In General.--
                (1) Grant program.--From the amounts made available under
            subsection (i), the Secretary shall award grants to States for
            the purposes of constructing new community college facilities
            and modernizing, renovating, and repairing existing community
            college facilities. Grants awarded under this section shall be
            used by a State for one or more of the following:
                        (A) To reduce financing costs of loans for new
                    construction, modernization, renovation, or repair
                    projects at community colleges (such as paying interest
                    or points on such loans).
                        (B) To provide matching funds for a community
                    college capital campaign to attract private donations
                    of funds for new construction, modernization,
                    renovation, or repair projects at the community
                    college.
                        (C) To capitalize a revolving loan fund to finance
                    new construction, modernization, renovation, and repair
                    projects at community colleges.
                (2) Allocation.--
                        (A) Determination of available amount.--The
                    Secretary shall determine the amount available for
                    allocation to each State by determining the amount
                    equal to the total number of students in the State who
                    are enrolled in community colleges and who are pursuing
                    a degree or certificate that is not a bachelor's,
                    master's, professional, or other advanced degree,
                    relative to the total number of such students in all
                    States, combined.
                        (B) Allocation.--The Secretary shall allocate to
                    each State selected by the Secretary to receive a grant
                    under this section an amount equal to the amount
                    determined to be available for allocation to such State
                    under subparagraph (A), less any portion of that amount
                    that is subject to a limitation under paragraph (3).
                        (C) Reallocation.--Amounts not allocated under this
                    section to a State because--
                                (i) the State did not submit an application
                            under subsection (b);
                                (ii) the State submitted an application
                            that the Secretary determined did not meet the
                            requirements of such subsection; or
                                (iii) the State is subject to a limitation
                            under paragraph (3) that prevents the State
                            from using a portion of the allocation,
                    shall be proportionately reallocated under this
                    paragraph to the States that are not described in
                    clause (i), (ii), or (iii) of this subparagraph.
                (3) Grant amount limitations.--A grant awarded to a State
            under this section--
                        (A) to reduce financing costs of loans for new
                    construction, modernization, renovation, or repair
                    projects at community colleges under paragraph (1)(A)
                    shall be for an amount that is not more than 25 percent
                    of the total principal amount of the loans for which
                    financing costs are being reduced; and
                        (B) to provide matching funds for a community
                    college capital campaign under paragraph (1)(B) shall
                    be for an amount that is not more than 25 percent of
                    the total amount of the private donations of funds
                    raised through such campaign over the duration of such
                    campaign, as such duration is determined by the State
                    in the application submitted under subsection (b).
                (4) Supplement, not supplant.--Funds made available under
            this section shall be used to supplement, and not supplant,
            other Federal, State, and local funds that would otherwise be
            expended to construct new community college facilities or
            modernize, renovate, or repair existing community college
            facilities.
        (b) Application.--A State that desires to receive a grant under
    this section shall submit an application to the Secretary at such time,
    in such manner, and containing such information and assurances as the
    Secretary may require. Such application shall include a certification
    by the State that the funds provided under this section for the
    construction of new community college facilities and the modernization,
    renovation, and repair of existing community college facilities will
    improve instruction at such colleges and will improve the ability of
    such colleges to educate and train students to meet the workforce needs
    of employers in the State.
        (c) Use of Funds by Community Colleges.--
                (1) Permissible uses of funds.--Funds made available to
            community colleges through a loan described in subsection
            (a)(1)(A), a capital campaign described in subsection
            (a)(1)(B), or a loan from a revolving loan fund described in
            subsection (a)(1)(C) shall be used only for the construction,
            modernization, renovation, or repair of community college
            facilities that are primarily used for instruction, research,
            or student housing, which may include any of the following:
                        (A) Repair, replacement, or installation of roofs,
                    including extensive, intensive, or semi-intensive green
                    roofs, electrical wiring, water supply and plumbing
                    systems, sewage systems, storm water runoff systems,
                    lighting systems, building envelope, windows, ceilings,
                    flooring, or doors, including security doors.
                        (B) Repair, replacement, or installation of
                    heating, ventilation, or air conditioning systems,
                    including insulation, and conducting indoor air quality
                    assessments.
                        (C) Compliance with fire, health, seismic, and
                    safety codes, including professional installation of
                    fire and life safety alarms, and modernizations,
                    renovations, and repairs that ensure that the community
                    college's facilities are prepared for emergencies, such
                    as improving building infrastructure to accommodate
                    security measures and installing or upgrading
                    technology to ensure that the community college is able
                    to respond to emergencies such as acts of terrorism,
                    campus violence, and natural disasters.
                        (D) Retrofitting necessary to increase the energy
                    efficiency of the community college's facilities.
                        (E) Modifications necessary to make facilities
                    accessible in compliance with the Americans with
                    Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and
                    section 504 of the Rehabilitation Act of 1973 (29
                    U.S.C. 794).
                        (F) Abatement, removal, or interim controls of
                    asbestos, polychlorinated biphenyls, mold, mildew, or
                    lead-based hazards, including lead-based paint hazards
                    from the community college's facilities.
                        (G) Modernization, renovation, or repair necessary
                    to reduce the consumption of coal, electricity, land,
                    natural gas, oil, or water.
                        (H) Modernization, renovation, and repair relating
                    to improving science and engineering laboratories,
                    libraries, or instructional facilities.
                        (I) Installation or upgrading of educational
                    technology infrastructure.
                        (J) Installation or upgrading of renewable energy
                    generation and heating systems, including solar,
                    photovoltaic, wind, biomass (including wood pellet and
                    woody biomass), waste-to-energy, solar-thermal and
                    geothermal systems, and energy audits.
                        (K) Other modernization, renovation, or repair
                    projects that are primarily for instruction, research,
                    or student housing.
                        (L) Required environmental remediation related to
                    modernization, renovation, or repair described in
                    subparagraphs (A) through (K).
                (2) Green school requirement.--A community college
            receiving assistance through a loan described in subsection
            (a)(1)(A), a capital campaign described in subsection
            (a)(1)(B), or a loan from a revolving loan fund described in
            subsection (a)(1)(C) shall use not less than 50 percent of such
            assistance to carry out projects for construction,
            modernization, renovation, or repair that are certified,
            verified, or consistent with the applicable provisions of--
                        (A) the LEED Green Building Rating System;
                        (B) Energy Star;
                        (C) the CHPS Criteria, as applicable;
                        (D) Green Globes; or
                        (E) an equivalent program adopted by the State or
                    the State higher education agency that includes a
                    verifiable method to demonstrate compliance with such
                    program.
                (3) Prohibited uses of funds.--
                        (A) In general.--No funds awarded under this
                    section may be used for--
                                (i) payment of maintenance costs;
                                (ii) construction, modernization,
                            renovation, or repair of stadiums or other
                            facilities primarily used for athletic contests
                            or exhibitions or other events for which
                            admission is charged to the general public; or
                                (iii) construction, modernization,
                            renovation, or repair of facilities--
                                        (I) used for sectarian instruction,
                                    religious worship, or a school or
                                    department of divinity; or
                                        (II) in which a substantial portion
                                    of the functions of the facilities are
                                    subsumed in a religious mission.
                        (B) Four-year institutions.--No funds awarded to a
                    four-year public institution of higher education under
                    this section may be used for any facility, service, or
                    program of the institution that is not available to
                    students who are pursuing a degree or certificate that
                    is not a bachelor's, master's, professional, or other
                    advanced degree.
        (d) Application of GEPA.--The grant program authorized in this
    section is an applicable program (as that term is defined in section
    400 of the General Education Provisions Act (20 U.S.C. 1221)) subject
    to section 439 of such Act (20 U.S.C. 1232b). The Secretary shall,
    notwithstanding section 437 of such Act (20 U.S.C. 1232) and section
    553 of title 5, United States Code, establish such program rules as may
    be necessary to implement such grant program by notice in the Federal
    Register.
        (e) Concurrent Funding.--Funds made available under this section
    shall not be used to assist any community college that receives funding
    for the construction, modernization, renovation, and repair of
    facilities under any other program under this division, the Higher
    Education Act of 1965, or the American Recovery and Reinvestment Act of
    2009.
        (f) Reports by the States.--Each State that receives a grant under
    this section shall, not later than September 30, 2012, and annually
    thereafter for each fiscal year in which the State expends funds
    received under this section, submit to the Secretary a report that
    includes--
                (1) a description the projects for which the grant funding
            was, or will be, used;
                (2) a list of the community colleges that have received, or
            will receive, assistance from the grant through a loan
            described in subsection (a)(1)(A), a capital campaign described
            in subsection (a)(1)(B), or a loan from a revolving loan fund
            described in subsection (a)(1)(C); and
                (3) a description of the amount and nature of the
            assistance provided to each such college.
        (g) Report by the Secretary.--The Secretary shall submit to the
    authorizing committees (as defined in section 103 of the Higher
    Education Act of 1965) an annual report on the grants made under this
    section, including the information described in subsection (f).
        (h) Definitions.--
                (1) Community college.--As used in this section, the term
            ``community college'' means--
                        (A) a junior or community college, as such term is
                    defined in section 312(f) of the Higher Education Act
                    of 1965 (20 U.S.C. 1085(f)); or
                        (B) a four-year public institution of higher
                    education (as defined in section 101 of the Higher
                    Education Act of 1965) that awards a significant number
                    of degrees and certificates that are not--
                                (i) bachelor's degrees (or an equivalent);
                            or
                                (ii) master's, professional, or other
                            advanced degrees.
                (2) CHPS criteria.--The term ``CHPS Criteria'' means the
            green building rating program developed by the Collaborative
            for High Performance Schools.
                (3) Energy star.--The term ``Energy Star'' means the Energy
            Star program of the United States Department of Energy and the
            United States Environmental Protection Agency.
                (4) Green globes.--The term ``Green Globes'' means the
            Green Building Initiative environmental design and rating
            system referred to as Green Globes.
                (5) Leed green building rating system.--The term ``LEED
            Green Building Rating System'' means the United States Green
            Building Council Leadership in Energy and Environmental Design
            green building rating standard referred to as the LEED Green
            Building Rating System.
                (6) Secretary.--The term ``Secretary'' means the Secretary
            of Education.
                (7) State.--The term ``State'' has the meaning given such
            term in section 103 of the Higher Education Act of 1965 (20
            U.S.C. 1003).
        (i) Availability of Funds.--There are authorized to be
    appropriated, and there are appropriated, to carry out this section (in
    addition to any other amounts appropriated to carry out this section
    and out of any money in the Treasury not otherwise appropriated),
    $2,500,000,000 for fiscal year 2011, which shall remain available until
    expended.

                    TITLE IV--EARLY LEARNING CHALLENGE FUND

    SEC. 401. PURPOSE.

        The purpose of this title is to provide grants on a competitive
    basis to States for the following:
                (1) To promote standards reform of State early learning
            programs serving children from birth through age 5 in order to
            support the healthy development and improve the school
            readiness outcomes of young children.
                (2) To establish a high standard of quality in early
            learning programs that integrates appropriate early learning
            and development standards across early learning settings.
                (3) To fund and implement quality initiatives that improve
            the skills and effectiveness of early learning providers, and
            improve the quality of existing early learning programs, in
            order to increase the number of disadvantaged children who
            participate in comprehensive and high-quality early learning
            programs.
                (4) To ensure that a greater number of disadvantaged
            children enter kindergarten with the cognitive, social,
            emotional, and physical skills and abilities needed to be
            successful in school.
                (5) To increase parents' abilities to access comprehensive
            and high quality early learning programs across settings for
            their children.

    SEC. 402. PROGRAMS AUTHORIZED.

        (a) Quality Pathways Grants.--The Secretary shall use funds made
    available to carry out this title for a fiscal year to award grants on
    a competitive basis to States in accordance with section 403.
        (b) Development Grants.--The Secretary shall use funds made
    available to carry out this title for a fiscal year to award grants in
    accordance with section 404 on a competitive basis to States that
    demonstrate a commitment to establishing a system of early learning
    that will include the components described in section 403(c)(3) but are
    not--
                (1) eligible to be awarded a grant under subsection (a); or
                (2) are not awarded such a grant after application.
        (c) Reservations of Federal Funds.--
                (1) Research, evaluation, and administration.--From the
            amount made available to carry out this title for a fiscal
            year, the Secretary--
                        (A) shall reserve up to 2 percent jointly to
                    administer this title with the Secretary of Health and
                    Human Services; and
                        (B) shall reserve up to 3 percent to carry out
                    activities under section 405.
                (2) Tribal school readiness planning demonstration.--After
            making the reservations under paragraph (1), the Secretary
            shall reserve 0.25 percent for a competitive grant program for
            Indian tribes to develop and implement school readiness plans
            that--
                        (A) are coordinated with local educational agencies
                    serving children who are members of the tribe; and
                        (B) include American Indian and Alaska Native Head
                    Start and Early Head Start programs, tribal child care
                    programs, Indian Health Service programs, and other
                    tribal programs serving children.
                (3) Quality pathways grants.--
                        (A) In general.--From the amount made available to
                    carry out this title for a fiscal year and not reserved
                    under paragraph (1) or (2), the Secretary shall reserve
                    a percent (which shall be not greater than 65 percent
                    for fiscal years 2010 through 2012 and not greater than
                    85 percent for fiscal year 2013 and each succeeding
                    fiscal year) determined under subparagraph (B) to carry
                    out subsection (a).
                        (B) Determination of amount.--In determining the
                    amount to reserve under subparagraph (A), the
                    Secretary, consistent with section 403(e), shall take
                    into account the following:
                                (i) The total number of States determined
                            by the Secretary to qualify for receipt of a
                            grant under this title for the year.
                                (ii) The number of children under age 5
                            from low-income families in each State with an
                            approved application under section 403 for the
                            year.
                        (C) Reallocation.--For fiscal year 2013 and
                    subsequent fiscal years, the Secretary may reallocate
                    funds allocated for development grants under subsection
                    (b) for the purpose of providing additional grants
                    under subsection (a), if the Secretary determines that
                    there is an insufficient number of applications that
                    meet the requirements for a grant under subsection (b).
        (d) State Applications.--In applying for a grant under this title,
    a State--
                (1) shall designate a State-level entity for administration
            of the grant;
                (2) shall coordinate proposed activities with the State
            Advisory Council on Early Childhood Education and Care
            (established pursuant to section 642B(b)(1)(A) of the Head
            Start Act (42 U.S.C. 9837b(b)(1)(A))) and shall incorporate
            plans and recommendations from such Council in the application,
            where applicable; and
                (3) otherwise shall submit the application to the Secretary
            at such time, in such manner, and containing such information
            as the Secretary may reasonably require.
        (e) Priority in Awarding Grants.--In awarding grants under this
    title, the Secretary shall give priority to States--
                (1) whose applications contain assurances that the State
            will use, in part, funds reserved under section 658G of the
            Child Care and Development Block Grant Act of 1990 (42 U.S.C.
            9858e) for activities described in section 403(f);
                (2) that will commit to dedicating a significant increase,
            in comparison to recent fiscal years, in State expenditures on
            early learning programs and services; and
                (3) that demonstrate efforts to build public-private
            partnerships designed to accomplish the purposes of this title.
        (f) Maintenance of Effort.--
                (1) In general.--With respect to each period for which a
            State is awarded a grant under this title, the aggregate
            expenditures by the State and its political subdivisions on
            early learning programs and services shall be not less than the
            level of the expenditures for such programs and services by the
            State and its political subdivisions for fiscal year 2006.
                (2) State expenditures.--For purposes of paragraph (1),
            expenditures by the State on early learning programs and
            services shall include, at a minimum, the following:
                        (A) State matching and maintenance of effort funds
                    for the Child Care and Development Block Grant Act of
                    1990 (42 U.S.C. 9858 et seq.).
                        (B) State matching funds for the State Advisory
                    Council on Early Childhood Education and Care
                    (established pursuant to section 642B(b)(1)(A) of the
                    Head Start Act (42 U.S.C. 9837b(b)(1)(A))).
                        (C) State expenditures on public pre-kindergarten,
                    Head Start (including Early Head Start), and other
                    State early learning programs and services dedicated to
                    children (including State expenditures under part C of
                    the Individuals with Disabilities Education Act (20
                    U.S.C. 1431 et seq.)).
        (g) Prohibitions on Use of Funds.--Funds under this title may not
    be used for any of the following:
                (1) Assessments that provide rewards or sanctions for
            individual children or teachers.
                (2) A single assessment used as the primary or sole method
            for assessing program effectiveness.
                (3) Evaluating children other than for--
                        (A) improving instruction or classroom environment;
                        (B) targeting professional development;
                        (C) determining the need for health, mental health,
                    disability, or family support services;
                        (D) informing the quality improvement process at
                    the State level;
                        (E) program evaluation for the purposes of program
                    improvement and parent information; or
                        (F) research conducted as part of the national
                    evaluation required by section 405(2).
        (h) Federal Administration.--
                (1) In general.--With respect to this title, the Secretary
            shall bear responsibility for obligating and disbursing funds
            and ensuring compliance with applicable laws and administrative
            requirements, subject to paragraph (2).
                (2) Interagency agreement.--The Secretary of Education and
            the Secretary of Health and Human Services shall jointly
            administer this title on such terms as such secretaries shall
            set forth in an interagency agreement.

    SEC. 403. QUALITY PATHWAYS GRANTS.

        (a) Grant Period.--Grants under section 402(a)--
                (1) may be awarded for a period not to exceed 5 years; and
                (2) may be renewed, subject to approval by the Secretary,
            and based on the State's progress in--
                        (A) increasing the percentage of disadvantaged
                    children in each age group (infants, toddlers, and
                    preschoolers) who participate in high-quality early
                    learning programs;
                        (B) increasing the number of high-quality early
                    learning programs in low-income communities;
                        (C) implementing an early learning system that
                    includes the components described in subsection (c)(3);
                    and
                        (D) incorporating the findings and recommendations
                    reported by the commission established under section
                    405(1) into the State system of early learning.
        (b) Matching Requirement.--
                (1) In general.--Subject to subsection (g), to be eligible
            to receive a grant under section 402(a), a State shall
            contribute to the activities assisted under the grant non-
            Federal matching funds in an amount equal to not less than the
            applicable percent of the amount of the grant.
                (2) Applicable percent.--For purposes of paragraph (1), the
            applicable percent means--
                        (A) 10 percent in the first fiscal year of the
                    grant;
                        (B) 10 percent in the second fiscal year of the
                    grant;
                        (C) 15 percent in the third fiscal year of the
                    grant; and
                        (D) 20 percent in the fourth fiscal year of the
                    grant and subsequent fiscal years.
                (3) Non-federal funds.--A State may use the following to
            satisfy the requirement of paragraph (1):
                        (A) Cash.
                        (B) In-kind contributions for the acquisition,
                    construction, or improvement of early learning program
                    facilities serving disadvantaged children.
                        (C) Technical assistance related to subparagraph
                    (B).
                (4) Private contributions.--Private contributions made as
            part of public-private partnerships to increase the number of
            low-income children in high-quality early learning programs in
            a State may be used by the State to satisfy the requirement of
            paragraph (1).
                (5) Financial hardship waiver.--The Secretary may waive or
            reduce the non-Federal share of a State that has submitted an
            application for a grant under section 402(a) if the State
            demonstrates a need for such waiver or reduction due to extreme
            financial hardship, as defined by the Secretary by regulation.
        (c) State Applications.--In order to be considered for a grant
    under section 402(a), a State's application under section 402(d) shall
    include the following:
                (1) A description of how the State will use the grant to
            implement quality initiatives to improve early learning
            programs serving disadvantaged children from birth to age 5 to
            lead to a greater percentage of such children participating in
            higher quality early learning programs.
                (2) A description of the goals and benchmarks the State
            will establish to lead to a greater percentage of disadvantaged
            children participating in higher quality early learning
            programs to improve school readiness outcomes, including an
            established baseline of the number of disadvantaged children in
            high-quality early learning programs.
                (3) A description of how the State will implement a
            governance structure and a system of early learning programs
            and services that includes the following components:
                        (A) Not later than 12 months after receiving notice
                    of an award of the grant, complete State early learning
                    and development standards that include social and
                    emotional, cognitive, and physical development domains,
                    and approaches to learning that are developmentally
                    appropriate (including culturally and linguistically
                    appropriate) for all children.
                        (B) A process to ensure that State early learning
                    and development standards are integrated into the
                    instructional and programmatic practices of early
                    learning programs and services, including services
                    provided to children under section 619 and part C of
                    the Individuals with Disabilities Education Act (20
                    U.S.C. 1419, 1431 et seq.).
                        (C) A program rating system that builds on
                    licensing requirements, as appropriate, and other State
                    regulatory standards and that--
                                (i) is designed to improve quality and
                            effectiveness across different types of early
                            learning settings;
                                (ii) integrates evidence-based program
                            quality standards that reflect standard levels
                            of quality and has progressively higher levels
                            of program quality;
                                (iii) integrates the State's early learning
                            and development standards for the purpose of
                            improving instructional and programmatic
                            practices;
                                (iv) addresses quality and effective
                            inclusion of children with disabilities or
                            developmental delays across different types of
                            early learning settings;
                                (v) addresses staff qualifications and
                            professional development;
                                (vi) provides financial incentives and
                            other supports to help programs meet and
                            sustain higher levels of quality;
                                (vii) includes mechanisms for evaluating
                            how programs are meeting those standards and
                            progressively higher levels of quality; and
                                (viii) includes a mechanism for public
                            awareness and understanding of the program
                            rating system, including rating levels of
                            individual programs.
                        (D) A system of program review and monitoring that
                    is designed to rate providers using the system
                    described in subparagraph (C) and to assess and improve
                    programmatic practices, instructional practices, and
                    classroom environment.
                        (E) A process to support early learning programs
                    integrating instructional and programmatic practices
                    that--
                                (i) include developmentally appropriate
                            (including culturally and linguistically
                            appropriate), ongoing, classroom-based
                            instructional assessments for each domain of
                            child development and learning (including
                            social and emotional, cognitive, and physical
                            development domains and approaches to learning)
                            to guide and improve instructional practice,
                            professional development of staff, and
                            services; and
                                (ii) are aligned with the curricula used in
                            the early learning program and with the State
                            early learning and development standards or the
                            Head Start Child Outcomes Framework (as
                            described in the Head Start Act), as
                            applicable.
                        (F) Minimum preservice early childhood development
                    and education training requirements for providers in
                    early learning programs.
                        (G) A comprehensive plan for supporting the
                    professional preparation and the ongoing professional
                    development of an effective, well-compensated early
                    learning workforce, which plan includes training and
                    education that is sustained, intensive, and classroom-
                    focused and leads toward a credential or degree and is
                    tied to improved compensation.
                        (H) An outreach strategy to promote understanding
                    by parents and families of--
                                (i) how to support their child's early
                            development and learning;
                                (ii) the State's program rating system, as
                            described in subparagraph (C); and
                                (iii) the rating of the program in which
                            their child is enrolled.
                        (I) A coordinated system to facilitate screening,
                    referral, and provision of services related to health,
                    mental health, disability, and family support for
                    children participating in early learning programs.
                        (J) A process for evaluating school readiness in
                    children that reflects all of the major domains of
                    development, and that is used to guide practice and
                    improve early learning programs.
                        (K) A coordinated data infrastructure that
                    facilitates--
                                (i) uniform data collection about the
                            quality of early learning programs, essential
                            information about the children and families
                            that participate in such programs, and the
                            qualifications and compensation of the early
                            learning workforce in such programs; and
                                (ii) alignment and interoperability between
                            the data system for early learning programs for
                            children and data systems for elementary and
                            secondary education.
                (4) A description of how the funds provided under the grant
            will be targeted to prioritize increasing the number and
            percentage of low-income children in high-quality early
            learning programs, including children--
                        (A) in each age group (infants, toddlers, and
                    preschoolers);
                        (B) with developmental delays and disabilities;
                        (C) with limited English proficiency; and
                        (D) living in rural areas.
                (5) An assurance that the grant will be used to improve the
            quality of early learning programs across a range of types of
            settings and providers of such programs.
                (6) A description of the steps the State will take to make
            progress toward including all center-based child care programs,
            family child care programs, State-funded prekindergarten, Head
            Start programs, and other early learning programs, such as
            those funded under title I of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 6301 et seq.) or receiving
            funds under section 619 or part C of the Individuals with
            Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.) in
            the State program rating system described in paragraph (3)(C).
                (7) An assurance that the State, not later than 18 months
            after receiving notice of an award of the grant, will conduct
            an analysis of the alignment of the State's early learning and
            development standards with--
                        (A) appropriate academic content standards for
                    grades kindergarten through 3; and
                        (B) elements of program quality standards for early
                    learning programs.
                (8) An assurance that the grant will be used only to
            supplement, and not to supplant, Federal, State, and local
            funds otherwise available to support existing early learning
            programs and services.
                (9) A description of any disparity by age group (infants,
            toddlers, and preschoolers) of available high-quality early
            learning programs in low-income communities and the steps the
            State will take to decrease such disparity, if applicable.
                (10) A description of how the State early learning and
            development standards will address the needs of children with
            limited English proficiency, including by incorporating
            benchmarks related to English language development.
                (11) A description of how the State's professional
            development plan will prepare the early learning workforce to
            support the early learning needs of children with limited
            English proficiency.
                (12) A description of how the State will improve
            interagency collaboration and coordinate the purposes of this
            title with the activities funded under--
                        (A) section 658G of the Child Care and Development
                    Block Grant Act of 1990 (42 U.S.C. 9858e);
                        (B) section 619 and part C of the Individuals with
                    Disabilities Education Act (20 U.S.C. 1419, 1431 et
                    seq.);
                        (C) title I of the Elementary and Secondary
                    Education Act of 1965 (20 U.S.C. 6301 et seq.);
                        (D) State-funded pre-kindergarten programs (where
                    applicable);
                        (E) Head Start programs; and
                        (F) other early childhood programs and services.
                (13) A description of how the State's early learning
            policies, including child care policies, facilitate access to
            high-quality early learning programs for children from low-
            income families.
                (14) An assurance that the State will continue to
            participate in part C of the Individuals with Disabilities
            Education Act (20 U.S.C. 1431 et seq.) for the duration of the
            grant.
        (d) Criteria Used in Awarding Grants.--In awarding grants under
    section 402(a), the Secretary shall evaluate the applications, and
    award grants under such section on a competitive basis, based on--
                (1) the quality of the application submitted pursuant to
            section 402(d);
                (2) the priority factors described in section 402(e);
                (3) evidence of significant progress in establishing a
            system of early learning for children that includes the
            components described in subsection (c)(3); and
                (4) the State's capacity to fully complete implementation
            of such a system.
        (e) Criterion Used in Determining Amount of Award.--In determining
    the amount to award a State under section 402(a), the Secretary shall
    take into account--
                (1) the proportion of children under age 5 from low-income
            families in the State relative to such proportion in other
            States; and
                (2) the State plan and capacity to implement the criteria
            described in paragraphs (3) and (4) of subsection (d).
        (f) State Uses of Funds.--
                (1) In general.--A State receiving a grant under section
            402(a) shall use the grant as follows:
                        (A) Not less than 65 percent of the grant amount
                    shall be used for two or more of the following
                    activities to improve the quality of early learning
                    programs serving disadvantaged children:
                                (i) Initiatives that improve the
                            credentials of early learning providers and are
                            tied to increased compensation.
                                (ii) Initiatives that help early learning
                            programs meet and sustain higher program
                            quality standards, such as--
                                        (I) improving the ratio of early
                                    learning provider to children in early
                                    learning settings;
                                        (II) reducing group size;
                                        (III) improving the qualifications
                                    of early learning providers; and
                                        (IV) supporting effective education
                                    and training for early learning
                                    providers.
                                (iii) Implementing classroom observation
                            assessments and data-driven decisions (which
                            may include implementation of a research-based
                            prevention and intervention framework designed
                            to build social competence and prevent
                            challenging behaviors) tied to activities that
                            improve instructional practices, programmatic
                            practices, or classroom environment and promote
                            school readiness.
                                (iv) Providing financial incentives to
                            early learning programs--
                                        (I) for undertaking quality
                                    improvements that promote healthy
                                    development and school readiness; and
                                        (II) maintaining quality
                                    improvements that promote healthy
                                    development and school readiness.
                                (v) Integrating State early learning and
                            development standards into instructional and
                            programmatic practices in early learning
                            programs.
                                (vi) Providing high-quality, sustained,
                            intensive, and classroom-focused professional
                            development that improves the knowledge and
                            skills of early learning providers, including
                            professional development related to meeting the
                            needs of diverse populations.
                                (vii) Building the capacity of early
                            learning programs and communities to promote
                            the understanding of parents and families of
                            the State's early learning system and the
                            rating of the program in which their child is
                            enrolled and to encourage the active
                            involvement and engagement of parents and
                            families in the learning and development of
                            their children.
                                (viii) Building the capacity of early
                            learning programs and communities to facilitate
                            screening, referral, and provision of services
                            related to health, mental health, disability,
                            and family support for children participating
                            in early learning programs.
                                (ix) Other innovative activities, proposed
                            by the State and approved in advance by the
                            Secretary that are--
                                        (I) based on successful practices;
                                        (II) designed to improve the
                                    quality of early learning programs and
                                    services; and
                                        (III) advance the system components
                                    described in subsection (c)(3).
                        (B) The remainder of the grant amount may be used
                    for one or more of the following:
                                (i) Implementation or enhancement of the
                            State's data system described in subsection
                            (c)(3)(K), including interoperability across
                            agencies serving children, and unique child and
                            program identifiers.
                                (ii) Enhancement of the State's oversight
                            system for early learning programs, including
                            the implementation of a program rating system.
                                (iii) The development and implementation of
                            measures of school readiness of children that
                            reflect all of the major domains of child
                            development and that inform the quality
                            improvement process.
                (2) Priority.--A State receiving a grant under section
            402(a) shall use the grant so as to prioritize improving the
            quality of early learning programs serving children from low-
            income families.
        (g) Special Rule.--
                (1) In general.--Beginning with the second fiscal year of a
            grant under section 402(a), a State with respect to which the
            Secretary certifies that the State has made sufficient progress
            in implementing the requirements of the grant may apply to the
            Secretary to reserve up to 25 percent of the amount of the
            grant to expand access for children from low-income families to
            the highest quality early learning programs that offer full-day
            services, except that the State must agree to contribute for
            such purpose non-Federal matching funds in an amount equal to
            not less than 20 percent of the amount reserved under this
            subsection. One-half of such non-Federal matching funds may be
            provided by a private entity.
                (2) Non-federal funds.--A State may use the following to
            satisfy the matching requirement of paragraph (1):
                        (A) Cash.
                        (B) In-kind contributions for the acquisition,
                    construction, or improvement of early learning program
                    facilities serving disadvantaged children.
                        (C) Technical assistance related to subparagraph
                    (B).
                (3) Financial hardship waiver.--The Secretary may waive or
            reduce the non-Federal share of a State under paragraph (1) if
            the State demonstrates a need for such waiver or reduction due
            to extreme financial hardship, as defined by the Secretary by
            regulation.
        (h) Improvement Plan.--If the Secretary determines that a State
    receiving a grant under section 402(a) is encountering barriers to
    reaching goals described in subsection (c)(2), the State shall develop
    a plan for improvement in consultation with, and subject to approval
    by, the Secretary.

    SEC. 404. DEVELOPMENT GRANTS.

        (a) Grant Period.--Grants under section 402(b) may be awarded for a
    period not to exceed 3 years, and may not be renewed.
        (b) State Uses of Funds.--
                (1) In general.--A State receiving a grant under section
            402(b) shall use the grant to undertake activities to develop
            the early learning system components described in section
            403(c)(3) and that will allow a State to become eligible and
            competitive for a grant described in section 402(a).
                (2) Priority.--A State receiving a grant under section
            402(b) shall use the grant so as to prioritize improving the
            quality of early learning programs serving low-income children.
        (c) Matching Requirement.--
                (1) In general.--To be eligible to receive a grant under
            section 402(b), a State shall contribute to the activities
            assisted under the grant non-Federal matching funds in an
            amount equal to not less than the applicable percent of the
            amount of the grant.
                (2) Applicable percent.--For purposes of paragraph (1), the
            applicable percent means--
                        (A) 20 percent in the first fiscal year of the
                    grant;
                        (B) 25 percent in the second fiscal year of the
                    grant; and
                        (C) 30 percent in the third fiscal year of the
                    grant.
                (3) Non-federal funds.--A State may use the following to
            satisfy the requirement of paragraph (1):
                        (A) Cash.
                        (B) In-kind contributions for the acquisition,
                    construction, or improvement of early learning program
                    facilities serving disadvantaged children.
                        (C) Technical assistance related to subparagraph
                    (B).
                (4) Private contributions.--Private contributions made as
            part of public-private partnerships to increase the number of
            low-income children in high-quality early learning programs in
            a State may be used by the State to satisfy the requirement of
            paragraph (1).
                (5) Financial hardship waiver.--The Secretary may waive or
            reduce the non-Federal share of a State that has submitted an
            application for a grant under section 402(b) if the State
            demonstrates a need for such waiver or reduction due to extreme
            financial hardship, as defined by the Secretary by regulation.

    SEC. 405. RESEARCH AND EVALUATION.

        From funds reserved under section 402(c)(1), the Secretary of
    Education and the Secretary of Health and Human Services, acting
    jointly, shall carry out the following activities:
                (1) Establishing a national commission whose duties shall
            include--
                        (A) reviewing the status of State and Federal early
                    learning program quality standards and early learning
                    and development standards;
                        (B) recommending benchmarks for program quality
                    standards and early learning and development standards,
                    including taking into consideration the school
                    readiness needs of children with limited English
                    proficiency; and
                        (C) reporting to the Secretaries of Education and
                    Health and Human Services not later than 2 years after
                    the date of the enactment of this Act on the
                    commission's findings and recommendations.
                (2) Conducting a national evaluation of the grants made
            under this title through the Institute of Education Science in
            collaboration with the appropriate research divisions within
            the Department of Health and Human Services.
                (3) Supporting a research collaborative among the Institute
            of Education Sciences, the National Institute of Child Health
            and Human Development, the Office of Planning, Research, and
            Evaluation within the Administration for Children and Families
            in the Department of Health and Human Services, and, as
            appropriate, other Federal entities to support research on
            early learning that can inform improved State and other
            standards and licensing requirements and improved child
            outcomes, which collaborative shall--
                        (A) biennially prepare and publish for public
                    comment a detailed research plan;
                        (B) support early learning research activities that
                    could include determining--
                                (i) the characteristics of early learning
                            programs that produce positive developmental
                            outcomes for children;
                                (ii) the effects of program quality
                            standards on child outcomes;
                                (iii) the relationships between specific
                            interventions and types of child and family
                            outcomes;
                                (iv) the effectiveness of early learning
                            provider training in raising program quality
                            and improving child outcomes;
                                (v) the effectiveness of professional
                            development strategies in raising program
                            quality and improving child outcomes; and
                                (vi) how to improve the school readiness
                            outcomes of children with limited English
                            proficiency, special needs, and homeless
                            children, including evaluation of professional
                            development programs for working with such
                            children; and
                        (C) disseminate relevant research findings and best
                    practices.
                (4) Evaluating barriers to improving the quality of early
            learning programs serving low-income children, including
            evaluating barriers to successful interagency collaboration and
            coordination, by conducting a review of the statewide strategic
            reports developed by the State Advisory Councils on Early Care
            and Education and other relevant reports, reporting the
            findings of such review to Congress, and disseminating relevant
            research findings and best practices.

    SEC. 406. REPORTING REQUIREMENTS.

        (a) Reports to Congress.--For each year in which funding is
    provided under this title, the Secretary shall submit an annual report
    to the Committee on Education and Labor of the House of Representatives
    and the Committee on Health, Education, Labor and Pensions of the
    Senate on the activities carried out under this title, including, at a
    minimum, information on the following:
                (1) The activities undertaken by States to increase the
            availability of high-quality early learning programs.
                (2) The number of children in high-quality early learning
            programs, and the change from the prior year, disaggregated by
            State, age, and race.
                (3) The number of early learning providers enrolled, with
            assistance from funds under this title, in a program to obtain
            a credential or degree in early childhood education and the
            settings in which such providers work.
                (4) A summary of State progress in implementing a system of
            early learning with the components described in section
            403(c)(3).
                (5) A summary of the research activities being conducted
            under section 405 and the findings of such research.
        (b) Reports to Secretary.--Each State that receives a grant under
    this title shall submit to the Secretary an annual report that
    includes, at a minimum, information on the activities carried out by
    the State under this title, including the following:
                (1) The progress on fully implementing and integrating into
            a system of early learning each of the components described in
            section 403(c)(3).
                (2) The State's progress in meeting its goals for
            increasing the number of disadvantaged children participating
            in high-quality early learning programs, disaggregated by child
            age.
                (3) The number and percentage of disadvantaged children
            participating in early learning programs at each level of
            quality, disaggregated by race, family income, child age,
            disability, and limited English proficiency status.
                (4) The number of providers participating in the State
            quality rating system, disaggregated by setting, rating, and
            the number of high-quality providers available in low-income
            communities.
                (5) Information on how the funds provided under this title
            were used to increase the availability of high-quality early
            learning programs for each age group, disaggregated by race and
            limited English proficient status, to the maximum extent
            practicable.
                (6) Information on professional development and training
            expenditures, including--
                        (A) the number of early learning providers engaged
                    in such activities; and
                        (B) the number of early learning providers enrolled
                    in programs to obtain a credential or degree in early
                    childhood education, disaggregated by the type of
                    credential and degree.
                (7) The change in the number and percentage of early
            learning providers with appropriate credentials or degrees in
            early childhood education, including the change in compensation
            given to such providers, in comparison to the prior fiscal
            year, disaggregated by early learning setting and the type of
            credential or degree.
                (8) In the case of a State receiving a grant under section
            402(a), the percentage of children receiving assistance under
            the Child Care and Development Block Grant Act of 1990 (42
            U.S.C. 9858 et seq.) who participate in the highest quality
            early learning programs, disaggregated by program setting and
            child age.
                (9) Barriers to expanding access to high-quality early
            learning programs for disadvantaged children.

    SEC. 407. CONSTRUCTION.

        Nothing in this title--
                (1) shall be construed to require a child to participate in
            an early learning program; or
                (2) shall be used to deny entry to kindergarten for any
            individual if the individual is legally eligible, as defined by
            State or local law.

    SEC. 408. DEFINITIONS.

        For purposes of this title:
                (1) Child.--The term ``child'' refers to an individual from
            birth through the day the individual enters kindergarten.
                (2) Disadvantaged.--The term ``disadvantaged'', when used
            with respect to a child, means a child whose family income is
            described in section 658P(4)(B) of the Child Care and
            Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)).
                (3) Indian tribe.--The term ``Indian tribe'' has the
            meaning given such term in section 637 of the Head Start Act
            (42 U.S.C. 9832).
                (4) Limited english proficient.--The term ``limited English
            proficient'' has the meaning given such term in section 637 of
            the Head Start Act (42 U.S.C. 9832).
                (5) Secretary.--The term ``Secretary'' means the Secretary
            of Education.
                (6) State.--The term ``State'' has the meaning given such
            term in section 9101 of the Elementary and Secondary Education
            Act of 1965 (20 U.S.C. 7801).

    SEC. 409. AVAILABILITY OF FUNDS.

        There are authorized to be appropriated, and there are
    appropriated, to carry out this title (in addition to any other amounts
    appropriated to carry out this title and out of any money in the
    Treasury not otherwise appropriated) $1,000,000,000 for each of fiscal
    years 2010 through 2017.

                    TITLE V--AMERICAN GRADUATION INITIATIVE

    SEC. 501. AUTHORIZATION AND APPROPRIATION.

        (a) Authorization and Appropriation.--There are authorized to be
    appropriated, and there are appropriated, to carry out this title (in
    addition to any other amounts appropriated to carry out this title and
    out of any money in the Treasury not otherwise appropriated),
    $730,000,000 for each of the fiscal years 2010 through 2013, and
    $680,000,000 for each of the fiscal years 2014 through 2019.
        (b) Allocations.--Of the amount appropriated under subsection (a)--
                (1) $630,000,000 shall be made available for each of the
            fiscal years 2010 through 2013 to carry out section 503;
                (2) $630,000,000 shall be made available for each of the
            fiscal years 2014 through 2019 to carry out section 504;
                (3) $50,000,000 shall be made available for each of the
            fiscal years 2010 through 2019 to carry out subsection (a) of
            section 505; and
                (4) $50,000,000 shall be made available for each of the
            fiscal years 2010 through 2013 to carry out subsections (b) and
            (c) of section 505.
        (c) Responsibility.--
                (1) In general.--With respect to sections 503 and 504, the
            Secretary of Education shall bear the responsibility for
            obligating and disbursing funds under such sections and
            ensuring compliance with applicable law and administrative
            requirements, subject to paragraph (2).
                (2) Interagency agreement.--The Secretary of Education and
            the Secretary of Labor shall jointly administer sections 503
            and 504 on such terms as such Secretaries shall set forth in an
            interagency agreement.

    SEC. 502. DEFINITIONS; GRANT PRIORITY.

        (a) Definitions.--In this title:
                (1) Area career and technical education school.--The term
            ``area career and technical education school'' has the meaning
            given such term in section 3 of the Carl D. Perkins Career and
            Technical Education Act of 2006 (20 U.S.C. 2302).
                (2) Community college.--The term ``community college''
            means a public institution of higher education at which the
            highest degree that is predominantly awarded to students is an
            associate's degree.
                (3) Eligible entity.--The term ``eligible entity'' means--
                        (A) a community college or community college
                    district;
                        (B) an area career and technical education school;
                        (C) a public four-year institution of higher
                    education that--
                                (i) offers two-year degrees;
                                (ii) will use funds provided under this
                            section for activities at the certificate and
                            associate degree levels; and
                                (iii) is not reasonably close, as
                            determined by the Secretary, to a community
                            college;
                        (D) a public four-year institution of higher
                    education that is in partnership with an eligible
                    entity described in subparagraph (A), (B), or (C);
                        (E) a State that--
                                (i) is in compliance with section 137 of
                            the Higher Education Act of 1965 (20 U.S.C.
                            1015f);
                                (ii) has an articulation agreement pursuant
                            to section 486A of such Act (20 U.S.C. 1093a);
                            and
                                (iii) is in partnership with an eligible
                            entity described in subparagraph (A), (B), (C),
                            or (D); or
                        (F) a consortium of at least 2 entities described
                    in subparagraphs (A) through (E).
                (4) Industry or sector partnership.--The term ``industry or
            sector partnership'' has the meaning given such term in section
            782(f) of the Higher Education Act of 1965.
                (5) Institution of higher education.--The term
            ``institution of higher education'' has the meaning given such
            term in section 101 of the Higher Education Act of 1965 (20
            U.S.C. 1001).
                (6) Philanthropic organization.--The term ``philanthropic
            organization'' has the meaning given such term in section
            781(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)).
                (7) Secretary.--The term ``Secretary'' means the Secretary
            of Education.
                (8) State.--The term ``State'' has the meaning given such
            term in section 103 of the Higher Education Act of 1965 (20
            U.S.C. 1003).
                (9) State public employment service.--The term ``State
            public employment service'' refers to a State public employment
            service established under the Wagner-Peyser Act (29 U.S.C. 49
            et seq.).
                (10) State workforce investment board; local workforce
            investment board.--The terms ``State workforce investment
            board'' and ``local workforce investment board'' refer to a
            State workforce investment board established under section 111
            of the Workforce Investment Act (29 U.S.C. 2821) and a local
            workforce investment board established under section 117 of
            such Act (29 U.S.C. 2832), respectively.
                (11) Supportive services.--The term ``supportive services''
            has the meaning given such term in section 101(46) of the
            Workforce Investment Act of 1998 (29 U.S.C. 2801(46)).
        (b) Grant Priority.--In addition to any grant priorities
    established under any other provision of this title, the Secretary, in
    awarding grants under this title, shall give priority to applications
    focused on serving low-income, nontraditional students who do not have
    a bachelor's degree, and who have one or more of the following
    characteristics:
                (1) Are the first generation in their family to attend
            college.
                (2) Have delayed enrollment in college.
                (3) Have dependents.
                (4) Are independent students.
                (5) Work at least 25 hours per week.
                (6) Are out-of-school youth without a high school diploma.

    SEC. 503. GRANTS TO ELIGIBLE ENTITIES FOR COMMUNITY COLLEGE REFORM.

        (a) Program Authorization.--
                (1) Grants authorized.--
                        (A) In general.--Subject to paragraph (2), from the
                    amount appropriated to carry out this section, the
                    Secretary, in coordination with the Secretary of Labor,
                    shall award grants to eligible entities, on a
                    competitive basis, to establish and support programs
                    described in subparagraph (B) at eligible entities
                    described in subparagraphs (A) through (D) of section
                    502(a)(3).
                        (B) Programs.--The programs to be established and
                    supported with grants under subparagraph (A) (and
                    carried out through activities described in subsection
                    (f)) shall be programs--
                                (i) that are--
                                        (I) innovative programs; or
                                        (II) programs of demonstrated
                                    effectiveness, based on the evaluations
                                    of similar programs funded by the
                                    Department of Education or the
                                    Department of Labor, or other research
                                    of similar programs; and
                                (ii) that lead to the completion of a
                            postsecondary degree, certificate, or industry-
                            recognized credential leading to a skilled
                            occupation in a high-demand industry.
                (2) Limitation.--For each fiscal year for which funds are
            appropriated to carry out this section, the aggregate amount of
            the grants awarded to eligible entities that are States, or
            consortia that include a State, shall be not more than 50
            percent of the total amount appropriated under section
            501(b)(1) for such fiscal year.
                (3) Prohibition.--The Secretary shall not award a grant to
            an eligible entity for the same activities that are being
            supported by other Federal funds.
        (b) Grant Duration and Amount.--
                (1) Duration.--A grant under this section shall be awarded
            to an eligible entity for a 4-year period, except that if the
            Secretary determines that the eligible entity has not made
            demonstrable progress in achieving the benchmarks developed
            pursuant to subsection (g) by the end of the third year of such
            grant period, no further grant funds shall be made available to
            the entity after the date of such determination.
                (2) Amount.--The minimum amount of a total grant award
            under this section over the 4-year period of the award shall be
            $750,000.
        (c) Priority.--In awarding grants under this section, the Secretary
    shall give priority to eligible entities that--
                (1) enter into partnerships with--
                        (A) philanthropic or research organizations with
                    expertise in meeting the goals of this section;
                        (B) businesses or industry or sector partnerships
                    that--
                                (i) design and implement programs described
                            in subsection (a)(1)(B);
                                (ii) pay a portion of the costs of such
                            programs; and
                                (iii) agree to collaborate with one or more
                            eligible entities to hire individuals who have
                            completed a particular postsecondary degree,
                            certificate, or credential program; or
                        (C) labor organizations that provide technical
                    expertise for occupationally specific education
                    necessary for an industry-recognized credential leading
                    to a skilled occupation in a high-demand industry; or
                (2) are institutions of higher education eligible for
            assistance under title III or V of the Higher Education Act of
            1965, or consortia that include such an institution.
        (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
                (1) Federal share.--The amount of the Federal share under
            this section for a fiscal year shall be not greater than \1/2\
            of the costs of the programs, services, and policies described
            in subsection (f) that are carried out under the grant.
                (2) Non-federal share.--
                        (A) In general.--The amount of the non-Federal
                    share under this section for a fiscal year shall be not
                    less than \1/2\ of the costs of the programs, services,
                    and policies described in subsection (f) that are
                    carried out under the grant. The non-Federal share may
                    be in cash or in kind, and may be provided from State
                    resources, local resources, contributions from private
                    organizations, or a combination thereof.
                        (B) Financial hardship waiver.--The Secretary may
                    waive or reduce the non-Federal share of an eligible
                    entity that has submitted an application under this
                    section if the entity demonstrates a need for such
                    waiver or reduction due to extreme financial hardship,
                    as defined by the Secretary by regulation.
                (3) Supplement, not supplant.--The Federal and non-Federal
            shares required by this section shall be used to supplement,
            and not supplant, State and private resources that would
            otherwise be expended to establish and support programs
            described in subsection (a)(1)(B) at eligible entities.
        (e) Application.--An eligible entity seeking to receive a grant
    under this section shall submit to the Secretary an application at such
    time, in such manner, and containing such information as the Secretary
    may require. Such application shall describe the programs under
    subsection (a)(1)(B) that the eligible entity will carry out using the
    grant funds, (including the programs, services, and policies under
    subsection (f)), including--
                (1) the goals of such programs, services, and policies;
                (2) how the eligible entity will allocate grant funds for
            such programs, services, and policies;
                (3) how such programs, services, and policies, and the
            resources of the eligible entity, will enable the eligible
            entity to meet the benchmarks developed pursuant to subsection
            (g), and how the eligible entity will track and report the
            entity's progress in reaching such benchmarks;
                (4) how the eligible entity will use such programs,
            services, and policies to establish quantifiable targets for
            improving graduation rates and employment-related outcomes;
                (5) how the eligible entity will serve high-need
            populations through such programs, services, and policies;
                (6) how the eligible entity will partner with industry or
            sector partnerships in the State, the State public employment
            service, and State or local workforce investment boards in
            carrying out such programs, services, and policies;
                (7) an assurance that the eligible entity will share
            information with the Learning and Earning Research Center
            established under section 505(b), once such Center is
            established;
                (8) an assurance that the eligible entity will participate
            in the evaluation of such programs, services, and policies
            under subsection (i); and
                (9) the potential for such programs, services, and policies
            to be replicated at other institutions of higher education.
        (f) Uses of Funds.--An eligible entity receiving a grant under this
    section shall use the grant funds to carry out the programs described
    in subsection (a)(1)(B), which shall include at least 2 of the
    following activities:
                (1) Developing and implementing policies and programs to
            expand opportunities for students at eligible entities
            described in subparagraphs (A) through (D) of section 502(a)(3)
            to earn bachelor's degrees by--
                        (A) facilitating the transfer of academic credits
                    between institutions of higher education, including the
                    transfer of academic credits for courses in the same
                    field of study; and
                        (B) expanding articulation agreements and
                    guaranteed transfer agreements between such
                    institutions, including through common course numbering
                    and general core curriculum.
                (2) Expanding, enhancing, or creating academic programs or
            training programs, which shall be carried out with industry or
            sector partnerships or in partnership with employers and may
            include other relevant partners, that provide relevant job-
            skill training (including apprenticeships and worksite learning
            and training opportunities) for skilled occupations in high-
            demand industries.
                (3) Providing student support services, including--
                        (A) intensive career and academic advising;
                        (B) labor market information and job counseling;
                    and
                        (C) transitional job support, supportive services,
                    or assistance in connecting students with community
                    resources.
                (4) Creating workforce programs that provide a sequence of
            education and occupational training that leads to industry-
            recognized credentials, including programs that--
                        (A) blend basic skills and occupational training
                    that lead to industry-recognized credentials;
                        (B) integrate developmental education curricula and
                    instruction with for-credit coursework toward degree or
                    certificate pathways; or
                        (C) advance individuals on a career path toward
                    high-wage occupations in high-demand industries.
                (5) Building or enhancing linkages, including the
            development of dual enrollment programs and early college high
            schools, between--
                        (A) secondary education or adult education programs
                    (including programs established under the Carl D.
                    Perkins Career and Technical Education Act of 2006 and
                    title II of the Workforce Investment Act of 1998 (29
                    U.S.C. 9201 et seq.)); and
                        (B) eligible entities described in subparagraphs
                    (A) through (D) of section 502(a)(3).
                (6) Implementing other innovative programs, services, and
            policies designed to--
                        (A) increase postsecondary degree, certificate, and
                    industry-recognized credential completion rates,
                    particularly with respect to groups underrepresented in
                    higher education, at eligible entities described in
                    subparagraphs (A) through (D) of section 502(a)(3); and
                        (B) increase the provision of training for students
                    to enter skilled occupations in high-demand industries.
                (7) Improving the timeliness of the process for creating
            degree, certificate, and industry-recognized credential
            programs at eligible entities described in subparagraphs (A)
            through (D) of section 502(a)(3) that--
                        (A) reflect and respond to regional labor market
                    developments and trends;
                        (B) effectively address the workforce needs of
                    employers in the State; and
                        (C) are designed in consultation with such
                    employers.
        (g) Benchmarks.--
                (1) In general.--Each eligible entity receiving a grant
            under this section shall develop quantifiable benchmarks on the
            following indicators (where applicable), to be approved by the
            Secretary:
                        (A) Closing gaps in enrollment and completion rates
                    for--
                                (i) groups underrepresented in higher
                            education; and
                                (ii) groups of students enrolled at the
                            eligible entity (or at an institution of higher
                            education under the jurisdiction of the
                            eligible entity, in the case of an entity that
                            is not an institution) who have the lowest
                            enrollment and completion rates.
                        (B) Addressing local and regional workforce needs.
                        (C) Establishing articulation agreements between
                    two-year and four-year public institutions of higher
                    education within a State.
                        (D) Improving comprehensive employment and
                    educational outcomes for postsecondary education and
                    training programs, including--
                                (i) student persistence from one academic
                            year to the following academic year;
                                (ii) the number of credits students earn
                            toward a certificate or an associate's degree;
                                (iii) the number of students in
                            developmental education courses who
                            subsequently enroll in credit bearing
                            coursework;
                                (iv) transfer of general education credits
                            between institutions of higher education, as
                            applicable;
                                (v) completion of industry-recognized
                            credentials or associate's degrees to work in
                            skilled occupations in high-demand industries;
                                (vi) transfers to four-year institutions of
                            higher education; and
                                (vii) job placement related to skills
                            training or associate's degree completion.
                (2) Report.--The eligible entity receiving such a grant
            shall annually measure and report to the Secretary the progress
            of the entity in achieving the benchmarks developed pursuant to
            paragraph (1).
        (h) Provision of Transfer of Credit Information in Community
    College Course Schedules.--To the maximum extent practicable, each
    community college receiving a grant under this section shall include in
    each electronic and printed publication of the college's course
    schedule, in a manner of the college's choosing, for each course listed
    in the college's course schedule, whether such course is transferable
    for credit toward the completion of a 4-year baccalaureate degree at a
    public institution of higher education in the State in which the
    college is located.
        (i) Evaluation.--The Secretary shall allocate not more than two
    percent of the funds appropriated under section 501(b)(1) to the
    Institute of Education Sciences to conduct evaluations, ending not
    later than January 30, 2014, that--
                (1) assess the effectiveness of the grant programs carried
            out by each eligible entity receiving such a grant in--
                        (A) improving postsecondary education completion
                    rates (disaggregated by age, race, ethnicity, sex,
                    income, and disability);
                        (B) improving employment-related outcomes for
                    students served by such programs;
                        (C) serving high-need populations; and
                        (D) building or enhancing working partnerships with
                    the State public employment service or State or local
                    workforce investment boards; and
                (2) include any other information or assessments the
            Secretary may require.
        (j) Report.--The Secretary shall submit to the Committee on Health,
    Education, Labor, and Pensions of the Senate and the Committee on
    Education and Labor of the House of Representatives an annual report on
    grants awarded under this section, including--
                (1) the amount awarded to each eligible entity under this
            section;
                (2) a description of the activities conducted by each
            eligible entity receiving a grant under this section; and
                (3) a summary of the results of the evaluations submitted
            to the Secretary under subsection (i) and the progress each
            eligible entity made toward achieving the benchmarks developed
            under subsection (g).

    SEC. 504. GRANTS TO ELIGIBLE STATES FOR COMMUNITY COLLEGE PROGRAMS.

        (a) Program Authorization.--From the amount appropriated to carry
    out this section, the Secretary, in coordination with the Secretary of
    Labor, shall award grants to eligible States, on a competitive basis,
    to implement the systematic reform of community colleges located in the
    State by carrying out programs, services, and policies that
    demonstrated effectiveness under the evaluation described in section
    503(i).
        (b) Eligible State.--In this section, the term ``eligible State''
    means a State that demonstrates to the Secretary in the application
    submitted pursuant to subsection (e) that the State--
                (1) has a plan under section 782 of the Higher Education
            Act of 1965 to increase the State's rate of persistence in and
            completion of postsecondary education that takes into
            consideration and involves community colleges located in such
            State;
                (2) has a statewide longitudinal data system that includes
            data with respect to community colleges;
                (3) has an articulation agreement pursuant to section 486A
            of the Higher Education Act of 1965 (20 U.S.C. 1093a);
                (4) is in compliance with section 137 of such Act (20
            U.S.C. 1015f); and
                (5) meets any other requirements the Secretary may require.
        (c) Grant Duration; Renewal.--A grant awarded under this section
    shall be awarded to an eligible State for a 6-year period, except that
    if the Secretary determines that the eligible State has not made
    demonstrable progress in achieving the benchmarks developed pursuant to
    subsection (g) by the end of the third year of the grant period, no
    further grant funds shall be made available to the entity after the
    date of such determination.
        (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
                (1) Federal share.--The amount of the Federal share under
            this section for a fiscal year shall be not greater than \1/2\
            of the costs of the reform described in subsection (f) that is
            carried out with the grant.
                (2) Non-federal share.--
                        (A) In general.--The amount of the Non-Federal
                    share under this section for a fiscal year shall be not
                    less than \1/2\ of the costs of the reform described in
                    subsection (f) that is carried out with the grant. The
                    non-Federal share may be in cash or in kind, and may be
                    provided from State resources, local resources,
                    contributions from private organizations, or a
                    combination thereof.
                        (B) Financial hardship waiver.--The Secretary may
                    waive or reduce the non-Federal share of an eligible
                    State that has submitted an application under this
                    section if the State demonstrates a need for such
                    waiver or reduction due to extreme financial hardship,
                    as defined by the Secretary by regulation.
                (3) Supplement, not supplant.--The Federal and non-Federal
            share required by this section shall be used to supplement, and
            not supplant, State and private resources that would otherwise
            be expended to carry out the systematic reform of community
            colleges in a State.
        (e) Application.--An eligible State desiring to receive a grant
    under this section shall submit to the Secretary an application at such
    time, in such manner, and containing such information as the Secretary
    may require. Such application shall describe the programs, service, and
    policies to be used by the State to achieve the systematic reform
    described in subsection (f), including--
                (1) the goals of such programs, services, and policies;
                (2) how the State will allocate grant funds to carry out
            such programs, services, and policies, including identifying
            any State or private entity that will administer such programs,
            services, and policies;
                (3) how such programs, services, and policies will enable
            the State to--
                        (A) meet the benchmarks developed pursuant to
                    subsection (g), and how the State will track and report
                    the State's progress in reaching such benchmarks; and
                        (B) benefit students attending all community
                    colleges within the State;
                (4) how the State will use such programs, services, and
            policies to establish quantifiable targets for improving
            graduation rates and employment-related outcomes;
                (5) how the State will serve high-need populations through
            such programs, services, and policies;
                (6) how the State will partner with the State public
            employment service and State or local workforce investment
            boards in carrying out such programs, services, and policies;
                (7) how the State will evaluate such programs, services,
            and policies, which may include participation in national
            evaluations; and
                (8) how the State will involve community colleges and
            community college faculty in the planning, implementation, and
            evaluation of such programs, services, and policies.
        (f) Uses of Funds.--An eligible State receiving a grant under this
    section shall use the grant funds to implement the systematic reform of
    community colleges located in the State by carrying out programs,
    services, and policies that the Secretary has determined to have
    demonstrated effectiveness based on the results of the evaluation
    described in section 503(i). States shall allocate not less than 90
    percent of such grant funds to community colleges within the State.
        (g) Benchmarks.--
                (1) In general.--Each eligible State receiving a grant
            under this section shall, in consultation with the Secretary,
            develop quantifiable benchmarks on the indicators identified in
            section 503(f)(1).
                (2) Progress.--An eligible State receiving such a grant
            shall annually measure and report to the Secretary progress in
            achieving the benchmarks developed pursuant to paragraph (1).
        (h) Report.--
                (1) Reports to the secretary.--Each eligible State
            receiving a grant under this section shall annually submit to
            the Secretary and the Secretary of Labor a report on such
            grant, including--
                        (A) a description of the systematic reform carried
                    out by the State using such grant; and
                        (B) the outcome of such reform, including the
                    State's progress in achieving the benchmarks developed
                    under subsection (g).
                (2) Reports to congress.--Not later than 6 months after the
            end of the grant period, the Secretary shall submit to the
            Committee on Health, Education, Labor, and Pensions of the
            Senate and the Committee on Education and Labor of the House of
            Representatives a summary of the reports submitted under
            paragraph (1) with respect to such grant period.
        (i) Sense of Congress.--It is the sense of Congress that--
                (1) community colleges play an important role in preparing
            and training students seeking to enter the workforce;
                (2) it is vital that all States have access to the
            resources and assistance needed to compete for grants
            authorized under this section; and
                (3) in executing the grant program authorized under this
            section, the Secretary will make available any and all
            assistance, guidance, and support to States seeking to compete
            for grants authorized under this section and will work to
            ensure that such grants are distributed in a fair and equitable
            manner.

    SEC. 505. NATIONAL ACTIVITIES.

        (a) Open Online Education.--From the amount appropriated to carry
    out this section, the Secretary is authorized to make competitive
    grants to, or enter into contracts with, institutions of higher
    education, philanthropic organizations, and other appropriate entities
    to develop, evaluate, and disseminate freely-available high-quality
    online training, high school courses, and postsecondary education
    courses. Entities receiving funds under this subsection shall ensure
    that electronic and information technology activities meet the access
    standards established under section 508 of the Rehabilitation Act of
    1973 (29 U.S.C. 794d).
        (b) Learning and Earning Research Center.--
                (1) In general.--From the amount appropriated to carry out
            this section, the Director of the Institute of Education
            Sciences is authorized to award a grant to, or enter into a
            contract with, an organization with demonstrated expertise in
            the research and evaluation of community colleges to establish
            and operate the Learning and Earning Research Center (in this
            section referred to as the ``Center'').
                (2) Grant term.--The grant or contract awarded under this
            section shall be awarded for a period of not more than 4 years.
                (3) Board.--The Center shall have an independent advisory
            board of 9 individuals who--
                        (A) are appointed by the Secretary, based on
                    recommendations from the organization receiving the
                    grant or contract under this section; and
                        (B) who have demonstrated expertise in--
                                (i) data collection;
                                (ii) data analysis; and
                                (iii) econometrics, postsecondary
                            education, and workforce development research.
                (4) Center activities.--The Center shall--
                        (A) develop--
                                (i) peer-reviewed metrics to help consumers
                            make sound education and training choices, and
                            to help students, workers, schools, businesses,
                            researchers, and policymakers assess the
                            effectiveness of community colleges, and
                            courses of study at such colleges, in meeting
                            education and employment objectives and serving
                            groups that are underrepresented in
                            postsecondary education;
                                (ii) common metrics and data elements to
                            measure the education and employment outcomes
                            of students attending community colleges;
                        (B) coordinate with the Institute of Education
                    Sciences and States receiving a grant under subsection
                    (c) to develop--
                                (i) standardized data elements,
                            definitions, and data-sharing protocols to make
                            it possible for data systems related to
                            postsecondary education to be linked and
                            interoperable, and for best practices to be
                            shared among States;
                                (ii) standards and processes for
                            facilitating sharing of data in a manner that
                            safeguards student privacy; and
                        (C) develop and make widely available materials
                    analyzing best practices and research on successful
                    postsecondary education and training efforts;
                        (D) make the data and metrics developed pursuant to
                    subparagraph (A) available to the public in a
                    transparent, user-friendly format that is accessible to
                    individuals with disabilities; and
                        (E) consult with representatives from States with
                    respect to the activities of the Center.
        (c) State Systems.--
                (1) In general.--From the amount appropriated to carry out
            this section, the Secretary is authorized to award grants to
            States or consortia of States to establish cooperative
            agreements to develop, implement, and expand interoperable
            statewide longitudinal data systems that--
                        (A) collect, maintain, disaggregate (by
                    institution, income, race, ethnicity, sex, disability,
                    and age), and analyze student data from community
                    colleges, including data on the programs of study and
                    education and employment outcomes for particular
                    students, tracked over time; and
                        (B) can be linked to other data systems, as
                    applicable, including elementary and secondary
                    education and workforce data systems.
                (2) Supplement, not supplant.--Funds appropriated to carry
            out this subsection shall be used to supplement, and not
            supplant, other Federal and State resources that would
            otherwise be expended to carry out statewide longitudinal data
            systems, including funding appropriated for State Longitudinal
            Data Systems in the American Recovery and Reinvestment Act of
            2009 (Public Law 111-5; 123 Stat. 115).
                (3) Privacy and access to data.--
                        (A) In general.--Each State or consortia that
                    receives a grant under this subsection or any other
                    provision of this division shall implement measures
                    to--
                                (i) ensure that the statewide longitudinal
                            data system under this subsection and any other
                            data system the State or consortia is operating
                            for the purposes of this division meet the
                            requirements of section 444 of the General
                            Education Provisions Act (20 U.S.C. 1232g)
                            (commonly known as the ``Family Educational
                            Rights and Privacy Act of 1974'');
                                (ii) limit the use of information in any
                            such data system by governmental agencies in
                            the State, including State agencies, State
                            educational authorities, local educational
                            agencies, community colleges, and institutions
                            of higher education, to education and workforce
                            related activities under this division or
                            education and workforce related activities
                            otherwise permitted by Federal or State law;
                                (iii) prohibit the disclosure of personally
                            identifiable information except as permitted
                            under section 444 of the General Education
                            Provisions Act and any additional limitations
                            set forth in State law;
                                (iv) keep an accurate accounting of the
                            date, nature, and purpose of each disclosure of
                            personally identifiable information in any such
                            data system, a description of the information
                            disclosed, and the name and address of the
                            person, agency, institution, or entity to whom
                            the disclosure is made, which accounting shall
                            be made available on request to parents of any
                            student whose information has been disclosed;
                                (v) notwithstanding section 444 of the
                            General Education Provisions Act, require any
                            non-governmental party obtaining personally
                            identifiable information to sign a data use
                            agreement prior to disclosure that--
                                        (I) prohibits the party from
                                    further disclosing the information;
                                        (II) prohibits the party from using
                                    the information for any purpose other
                                    than the purpose specified in the
                                    agreement; and
                                        (III) requires the party to destroy
                                    the information when the purpose for
                                    which the disclosure was made is
                                    accomplished;
                                (vi) maintain adequate security measures to
                            ensure the confidentiality and integrity of any
                            such data system, such as protecting a student
                            record from identification by a unique
                            identifier;
                                (vii) where rights are provided to parents
                            under this clause, provide those rights to the
                            student instead of the parent if the student
                            has reached the age of 18 or is enrolled in a
                            postsecondary educational institution; and
                                (viii) ensure adequate enforcement of the
                            requirements of this paragraph.
                        (B) Use of unique identifiers.--It shall be
                    unlawful for any Federal, State, or local governmental
                    agency to--
                                (i) use the unique identifiers employed in
                            such data systems for any purpose other than as
                            authorized by Federal or State law; or
                                (ii) deny any individual any right,
                            benefit, or privilege provided by law because
                            of such individual's refusal to disclose the
                            individual's unique identifier.
        (d) Report.--The Secretary shall submit to the Committee on Health,
    Education, Labor, and Pensions of the Senate and the Committee on
    Education and Labor of the House of Representatives an annual report on
    the amounts awarded to entities receiving grants or contracts under
    this section, and the activities carried out by such entities under
    such grants and contracts.
                                                     Union Calendar No. 256

    111th CONGRESS

      2d Session

                                   H. R. 4872

    _______________________________________________________________________

                                     A BILL

    To provide for reconciliation pursuant to section 202 of the concurrent
                 resolution on the budget for fiscal year 2010.

    _______________________________________________________________________

                                 March 17, 2010

    Committed to the Committee of the Whole House on the State of the Union
                           and ordered to be printed