[Congressional Record Volume 155, Number 186 (Friday, December 11, 2009)]
[Senate]
[Pages S13039-S13061]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3164. Mr. CASEY submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 330, strike lines 7 through 11 and inserting the 
     following:
     ``individual is--
       ``(i) a member of a recognized religious sect or division 
     thereof which is described in section 1402(g)(1), and
       ``(ii) an adherent of established tenets or teachings of 
     such sect or division as described in such section.
                                 ______
                                 
  SA 3165. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1395, strike line 11 and all that follows through 
     ``SEC. 778.'' on line 15 and insert the following:

     SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

       Part B of title III of the Public Health Service Act (42 
     U.S.C. 243 et seq.) is amended by inserting after section 311 
     the following:

     ``SEC. 311A.

[[Page S13040]]

  SA 3166. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 816, after line 20, insert the following:

     SEC. 3115. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY 
                   ACCESS.

       (a) Study.--The Comptroller General of the United States 
     (in this section referred to as the ``Comptroller General'') 
     shall conduct a study on the ability of Medicare 
     beneficiaries to fully access available health care services 
     during the 5-year period following enactment of this Act. 
     Such study shall include the following:
       (1) A detailed analysis regarding levels of access to 
     health care services for different groups or populations of 
     Medicare beneficiaries, including a breakdown--
       (A) by location, including rural areas (as defined in 
     section 1886(d)(2)(D) of the Social Security Act), health 
     professional shortage areas (as designated under section 332 
     of the Public Health Service Act), medically underserved 
     communities (as defined in section 799B(6) of such Act), and 
     medically underserved populations (as defined in section 
     330(b)(3) of such Act);
       (B) by type of health care service, including physician 
     services and primary care services; and
       (C) by any other measure determined appropriate by the 
     Comptroller General.
       (2) A summary that identifies--
       (A) any groups or populations of Medicare beneficiaries 
     that lack adequate access to health care services; and
       (B) any types of health care services that are not fully 
     accessible to Medicare beneficiaries.
       (b) Report.--
       (1) Interim report.--Not later than 30 months after the 
     date of enactment of this Act, the Comptroller General shall 
     prepare and submit an interim report to Congress that 
     contains the preliminary results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Comptroller 
     General determines appropriate.
       (2) Final report.--Not later than 60 months after the date 
     of enactment of this Act, the Comptroller General shall 
     prepare and submit a final report to Congress that contains 
     the results of the study conducted under subsection (a), 
     together with recommendations for such legislation and 
     administrative action as the Comptroller General determines 
     appropriate.
       (c) Medicare Beneficiary.--In this section, the term 
     ``Medicare beneficiary'' means an individual entitled to 
     benefits under part A of title XVIII of the Social Security 
     Act, enrolled under part B of such title, or both.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______
                                 
  SA 3167. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       Strike section 1413 and insert the following:

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

       (a) In General.--The Secretary shall establish a system 
     meeting the requirements of this section under which 
     residents of each State may apply for enrollment in, receive 
     a determination of eligibility for participation in, and 
     continue participation in, applicable State health subsidy 
     programs. Such system shall ensure that if an individual 
     applying to an Exchange, to a State Medicaid program under 
     title XIX of the Social Security Act, or to a State 
     children's health insurance program (CHIP) under title XXI of 
     such Act, is found to be ineligible for the program to which 
     the individual applied, the individual shall be screened for 
     eligibility for all other potentially applicable such 
     programs and shall be enrolled in the program for which the 
     individual qualifies.
       (b) Requirements Relating to Forms and Notice.--
       (1) Requirements relating to forms.--
       (A) In general.--The Secretary shall develop and provide to 
     each State a single, streamlined form that--
       (i) may be used to apply for all applicable State health 
     subsidy programs within the State;
       (ii) may be filed online, in person, by mail, or by 
     telephone;
       (iii) may be filed with an Exchange or with State officials 
     operating one of the other applicable State health subsidy 
     programs; and
       (iv) is structured to maximize an applicant's ability to 
     complete the form satisfactorily, taking into account the 
     characteristics of individuals who qualify for applicable 
     State health subsidy programs.
       (B) State authority to establish form.--A State may develop 
     and use its own single, streamlined form as an alternative to 
     the form developed under subparagraph (A) if the alternative 
     form is consistent with standards promulgated by the 
     Secretary under this section.
       (C) Supplemental eligibility forms.--The Secretary may 
     allow a State to use a supplemental or alternative form in 
     the case of individuals who apply for eligibility that is not 
     determined on the basis of the household income (as defined 
     in section 36B of the Internal Revenue Code of 1986).
       (D) Relevance.--The forms described in subparagraphs (A) 
     and (B) shall not require the applicant to answer any 
     questions that are irrelevant to establishing eligibility for 
     applicable State health subsidy programs. The Secretary shall 
     establish procedures that avoid any need for such 
     requirements, which shall include determining the amounts 
     expended for medical assistance that are described in 
     subsection (y)(1) of section 1905 of the Social Security Act 
     (as added by section 2001(a)(3) of this Act) through the use 
     of the post-enrollment procedures described in section 
     1903(u)(1)(C) of the Social Security Act.
       (2) Notice.--The Secretary shall provide that an applicant 
     filing a form under paragraph (1) shall receive notice of 
     eligibility for an applicable State health subsidy program 
     without any need to provide additional information or 
     paperwork unless such information or paperwork is 
     specifically required by law when information provided on the 
     form is inconsistent with data used for the electronic 
     verification under paragraph (3) or is otherwise insufficient 
     to determine eligibility.
       (c) Requirements Relating to Eligibility Based on Data 
     Exchanges.--
       (1) Development of secure interfaces.--Each State shall 
     develop for all applicable State health subsidy programs a 
     secure, electronic interface allowing an exchange of data 
     (including information contained in the application forms 
     described in subsection (b)) that allows a determination of 
     eligibility for all such programs based on a single 
     application. Such interface shall be compatible with the 
     method established for data verification under section 
     1411(c)(4).
       (2) Data matching program.--Each applicable State health 
     subsidy program shall participate in a data matching 
     arrangement for determining eligibility for participation in 
     the program under paragraph (3) that--
       (A) provides access to data described in paragraph (3);
       (B) applies only to individuals who--
       (i) receive assistance from an applicable State health 
     subsidy program; or
       (ii) apply for such assistance--

       (I) by filing a form described in subsection (b); or
       (II) notwithstanding section 1411(b), by requesting a 
     determination of eligibility and authorizing disclosure of 
     the information described in paragraph (3) to applicable 
     State health coverage subsidy programs for purposes of 
     determining and establishing eligibility; and

       (C) is consistent with standards promulgated by the 
     Secretary, including the privacy and data security safeguards 
     described in section 1942 of the Social Security Act or that 
     are otherwise applicable to such programs.
       (3) Determination of eligibility.--
       (A) In general.--Each applicable State health subsidy 
     program shall, to the maximum extent practicable--
       (i) establish, verify, and update eligibility for 
     participation in the program using the data matching 
     arrangement under paragraph (2); and
       (ii) determine such eligibility on the basis of reliable, 
     third party data, including information described in sections 
     1137, 453(i), and 1942(a) of the Social Security Act, 
     obtained through such arrangement, provided that if such data 
     do not establish an individual's eligibility for medical 
     assistance under title XIX of the Social Security Act, the 
     rules described in section 1902(e)(14)(H) of such Act shall 
     apply to such individual.
       (B) Exception.--This paragraph shall not apply in 
     circumstances with respect to which the Secretary determines 
     that the administrative and other costs of use of the data 
     matching arrangement under paragraph (2) outweigh its 
     expected gains in accuracy, efficiency, and program 
     participation.
       (4) Secretarial standards.--The Secretary shall, after 
     consultation with persons in possession of the data to be 
     matched and representatives of applicable State health 
     subsidy programs, promulgate standards governing the timing, 
     contents, and procedures for data matching described in this 
     subsection. Such standards shall take into account 
     administrative and other costs and the value of data matching 
     to the establishment, verification, and updating of 
     eligibility for applicable State health subsidy programs.
       (d) Administrative Authority.--
       (1) Agreements.--Subject to section 1411 and section 
     6103(l)(21) of the Internal Revenue Code of 1986 and any 
     other requirement providing safeguards of privacy and data 
     integrity, the Secretary may establish model

[[Page S13041]]

     agreements, and enter into agreements, for the sharing of 
     data under this section.
       (2) Authority of exchange to contract out.--Nothing in this 
     section shall be construed to--
       (A) prohibit contractual arrangements through which a State 
     medicaid agency determines eligibility for all applicable 
     State health subsidy programs, but only if such agency 
     complies with the Secretary's requirements ensuring reduced 
     administrative costs, eligibility errors, and disruptions in 
     coverage; or
       (B) change any requirement under title XIX that eligibility 
     for participation in a State's medicaid program must be 
     determined by a public agency.
       (e) Applicable State Health Subsidy Program.--In this 
     section, the term ``applicable State health subsidy program'' 
     means--
       (1) the program under this title for the determination of 
     eligibility for premium tax credits under section 36B of the 
     Internal Revenue Code of 1986 and cost-sharing reductions 
     under section 1402;
       (2) a State medicaid program under title XIX of the Social 
     Security Act;
       (3) a State children's health insurance program (CHIP) 
     under title XXI of such Act; and
       (4) a State program under section 1331 establishing 
     qualified basic health plans.
                                 ______
                                 
  SA 3168. Mr. CASEY (for himself and Mrs. Gillibrand) submitted an 
amendment intended to be proposed to amendment SA 2786 proposed by Mr. 
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill 
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the 
first-time homebuyers credit in the case of members of the Armed Forces 
and certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 466, between lines 5 and 6, insert the following:

     SEC. 2305. 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 2001(a)(3), 2006, 
     and 2301(a)(1), is amended--
       (1) in subsection (a)--
       (A) in paragraph (28), by striking ``and'' at the end;
       (B) by redesignating paragraph (29) as paragraph (30); and
       (C) by inserting after paragraph (28) the following new 
     paragraph:
       ``(29) nurse home visitation services (as defined in 
     subsection (z)); and''; and
       (2) by inserting after subsection (y) the following new 
     subsection:
       ``(z) The term `nurse home visitation services' means 
     voluntary home visits that are provided by trained nurses to 
     a family 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 achieving 1 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.
                                 ______
                                 
  SA 3169. Mr. CORNYN (for himself and Mr. Coburn) submitted an 
amendment intended to be proposed to amendment SA 2786 proposed by Mr. 
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill 
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the 
first-time homebuyers credit in the case of members of the Armed Forces 
and certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       Strike section 6001.
                                 ______
                                 
  SA 3170. Mr. PRYOR (for himself and Mr. Bayh) submitted an amendment 
intended to be proposed to amendment SA 2786 proposed by Mr. Reid (for 
himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill H.R. 3590, 
to amend the Internal Revenue Code of 1986 to modify the first-time 
homebuyers credit in the case of members of the Armed Forces and 
certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 828, between lines 3 and 4, insert the following:

     SEC. 3130. RESTORING STATE AUTHORITY TO WAIVE THE 35-MILE 
                   RULE FOR MEDICARE CRITICAL ACCESS HOSPITAL 
                   DESIGNATIONS.

       Section 1820(c)(2)(B)(i)(II) of the Social Security Act (42 
     U.S.C. 1395i-4(c)(2)(B)(i)(II)) is amended by inserting ``or 
     on or after the date of enactment of the Patient Protection 
     and Affordable Care Act'' after ``January 1, 2006,''.
                                 ______
                                 
  SA 3171. Mr. PRYOR submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1999, between lines 20 and 21, insert the 
     following:

     SEC. 9005A. ANNUAL ROLLOVER OF HEALTH FSA BALANCES.

       (a) In General.--Subsection (i) of section 125 of the 
     Internal Revenue Code of 1986, as added by section 
     9005(a)(2), is amended--
       (1) by striking all matter before ``if a benefit'' and 
     inserting the following:
       ``(i) Special Rules Applicable to Health Flexible Spending 
     Arrangements.--
       ``(1) Limitation on contributions to health flexible 
     spending arrangements.--For purposes of this section,'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Allowance of carryover of unused amounts in health 
     flexible spending arrangements.--
       ``(A) In general.--For purposes of this title, a plan or 
     other arrangement shall not fail to be treated as a cafeteria 
     plan solely because under the plan or arrangement a 
     participant is permitted access to any unused amounts 
     attributable to salary reduction contributions under such 
     plan or arrangement in the manner provided under subparagraph 
     (B).
       ``(B) Carryover of unused amounts.--A plan or arrangement 
     may permit a participant in a health flexible spending 
     arrangement to elect to carry over so much of the unused 
     amounts attributable to salary reduction contributions under 
     such plan or arrangement as of the close of any calendar year 
     as does not exceed $1,000 to the immediately succeeding 
     calendar year.
       ``(C) Amounts not deferred compensation.--No amount shall 
     be treated as deferred compensation for purposes of this 
     title by reason of any carryover under this paragraph.
       ``(D) Coordination with contribution limit.--The maximum 
     amount which may be contributed to a health flexible spending 
     arrangement under paragraph (1) for any calendar year to 
     which an unused amount is carried over under this paragraph 
     shall be reduced by such amount.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after December 31, 
     2010.
                                 ______
                                 
  SA 3172. Mr. BROWN submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 18, between lines 15 and 16, insert the following:

     ``SEC. 2713A. COVERAGE OF CERTAIN CARE.

       ``A group health plan and a health insurance issuer 
     offering group or individual health insurance coverage shall 
     provide coverage for wound-care supplies that are medically 
     necessary for the treatment of epidermolysis bullosa and are 
     administered under the direction of a physician.''.
                                 ______
                                 
  SA 3173. Mr. MERKLEY (for himself and Mr. Franken) submitted an 
amendment intended to be proposed to amendment SA 2786 proposed by Mr. 
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill 
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the 
first-time homebuyers credit in the case of members of the Armed Forces 
and certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 354, between lines 2 and 3, insert the following:
       (D) Application to construction industry employers.--In the 
     case of any employer the substantial annual gross receipts of 
     which are attributable to the construction industry--

[[Page S13042]]

       (i) subparagraph (A) shall be applied by substituting ``who 
     employed an average of at least 5 full-time employees on 
     business days during the preceeding calendar year or whose 
     annual payroll expenses exceed $250,000 for such preceeding 
     calendar year'' for ``who employed an average of at least 50 
     full-time employees on business days during the preceeding 
     calendar year'', and
       (ii) subparagraph (B) shall be applied by substituting 
     ``5'' for ``50''.
                                 ______
                                 
  SA 3174. Ms. SNOWE submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       At after title IX, insert the following:

            TITLE X--HEALTH CARE REFORM OVERSIGHT COMMITTEE

     SEC. 10001. HEALTH CARE REFORM OVERSIGHT COMMITTEE.

       (a) Establishment.--There is established a committee to be 
     known as the Health Care Reform Oversight Committee (referred 
     to in this section as the ``Committee''), for the purpose of 
     maintaining close oversight of the implementation of the 
     requirements of this Act (including the amendments made by 
     this Act), including with regard to the affordability 
     criteria set forth in this Act, the impact of this Act on 
     small businesses, and pricing trends resulting from 
     implementation of this Act.
       (b) Membership.--The Committee shall be composed of 12 
     members, selected by the President pro tempore of the Senate 
     and the Speaker of the House of Representatives, in 
     consultation with the majority and minority leaders of the 
     Senate and of the House of Representatives, from among 
     members of the public experienced in health care 
     administration, tax policy, small business, actuarial 
     science, health insurance plan design or sales, or a 
     profession that would lend credibility to the work of the 
     Committee. Not more than 3 members of the Committee may be 
     Federal employees.
       (c) Chairperson.--The Committee shall select a Chairperson 
     from among its members.
       (d) Meetings.--The Committee shall meet at the call of the 
     chairperson, or as voted by 7 members, as is necessary to 
     maintain close oversight of the implementation of the 
     requirements of this Act (including the amendments made by 
     this Act), to address specific problems raised by such 
     implementation, or to address constituent concerns.
       (e) Quorum.--A quorum shall consist of a total of 7 members 
     of the Committee, except that a total of 5 members shall be 
     present to conduct hearings, unless such requirement that 5 
     members be present to conduct hearings is waived by a 
     majority of the Committee.
       (f) Duties of the Committee.--The Committee shall provide 
     close oversight of all aspects of the requirements of this 
     Act, including the amendments made by this Act.
       (g) Powers of the Committee.--
       (1) Hearings.--The Committee may, for the purpose of 
     carrying out this section--
       (A) hold such hearings, sit and act at such times and 
     places, take such testimony, receive such evidence, 
     administer such oaths; and
       (B) require, by subpoena or otherwise, the attendance and 
     testimony of such witnesses and the production of such books, 
     records, correspondence, memoranda, papers, documents, tapes, 
     and materials as the Committee considers advisable.
       (2) Reports and recommendations.--The Committee may issues 
     reports and findings as it deems appropriate, including 
     offering suggestions for legislation to improve the 
     requirements and activities under this Act (including the 
     amendments made by this Act).
       (3) Issuance and enforcement of subpoenas.--
       (A) Issuance.--Subpoenas issued under paragraph (1) shall 
     bear the signature of the Chairperson of the Committee and 
     shall be served by any person or class of persons designated 
     by the Chairperson for that purpose.
       (B) Enforcement.--In the case of contumacy or failure to 
     obey a subpoena issued under paragraph (1), the United States 
     district court for the judicial district in which the 
     subpoenaed person resides, is served, or may be found may 
     issue an order requiring such person to appear at any 
     designated place to testify or to produce documentary or 
     other evidence. Any failure to obey the order of the court 
     may be punished by the court as a contempt that court.
       (4) Witness allowances and fees.--Section 1821 of title 28, 
     United States Code, shall apply to witnesses requested or 
     subpoenaed to appear at any hearing of the Committee. The per 
     diem and mileage allowances for witnesses shall be paid from 
     funds available to pay the expenses of the Committee.
       (5) Information from federal agencies.--The Committee may 
     secure directly from any Federal department or agency such 
     information as the Committee considers necessary to carry out 
     this Act. Upon request of the Chairperson of the Committee, 
     or of another member of the Committee representing a majority 
     vote, the head of such department or agency shall furnish 
     such information to the Committee.
       (6) Postal services.--The Committee may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (7) Gifts.--The Committee may accept, use, and dispose of 
     gifts or donations of services or property.
       (h) Compensation of Members.--
       (1) In general.--Each member of the Committee who is not an 
     officer or employee of the Federal Government shall be 
     compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Committee. All members of the Committee who are 
     officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (2) Travel expenses.--The members of the Committee shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Committee.
       (i) Termination of the Committee.--The Committee shall 
     terminate 5 years after the date of enactment of this Act.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.
                                 ______
                                 
  SA 3175. Mr. SPECTER (for himself, Mr. Brown, and Mr. Casey) 
submitted an amendment intended to be proposed to amendment SA 2786 
proposed by Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. 
Harkin) to the bill H.R. 3590, to amend the Internal Revenue Code of 
1986 to modify the first-time homebuyers credit in the case of members 
of the Armed Forces and certain other Federal employees, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 816, after line 20, insert the following:

     SEC. 3115. EXCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS 
                   EXTENDED TO WHOLESALERS FROM MANUFACTURER'S 
                   AVERAGE SALES PRICE FOR PAYMENTS FOR DRUGS AND 
                   BIOLOGICALS UNDER MEDICARE PART B.

       Section 1847A(c)(3) of the Social Security Act (42 U.S.C. 
     1395w-3a(c)(3)) is amended--
       (1) in the first sentence, by inserting after ``prompt pay 
     discounts'' the following: ``(other than, for drugs and 
     biologicals that are sold on or after January 1, 2011, and 
     before January 1, 2016, customary prompt pay discounts 
     extended to wholesalers, but only to the extent such 
     discounts do not exceed 2 percent of the wholesale 
     acquisition cost)''; and
       (2) in the second sentence, by inserting after ``other 
     price concessions'' the following: ``(other than, for drugs 
     and biologicals that are sold on or after January 1, 2011, 
     and before January 1, 2016, customary prompt pay discounts 
     extended to wholesalers, but only to the extent such 
     discounts do not exceed 2 percent of the wholesale 
     acquisition cost)''.
                                 ______
                                 
  SA 3176. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 334, between lines 18 and 19, insert the following:
       ``(E) Special rule for individuals between the ages of 55 
     and 64.--
       ``(i) In general.--In the case of an applicable individual 
     who has attained the age of 55 but has not attained the age 
     of 65 before the beginning of a calendar year, this paragraph 
     shall be applied to such individual for months during such 
     calendar year by substituting `5 percent' for `8 percent' in 
     subparagraphs (A) and (D).
       ``(ii) Use of increased federal funds.--

       ``(I) In general.--The amount available for any calendar 
     year for expenditure under the early retiree reinsurance 
     program under section 1102 of the Patient Protection and 
     Affordable Care Act shall be increased by the amount the 
     Secretary of Health and Human Services estimates under 
     subclause (II) for the calendar year. Notwithstanding section 
     1102(a)(1) of such Act, amounts made available under this 
     subclause for any calendar year after 2014 may be used to 
     make payments under such reinsurance program.
       ``(II) Estimates.--The Secretary of Health and Human 
     Services, in consultation with the Secretary, shall estimate 
     for each calendar year after 2013 the net increase (if any) 
     in Federal revenues, and the net decrease (if any) in Federal 
     outlays, by reason of the application of clause (i). The sum 
     of such amounts (expressed as a positive number)

[[Page S13043]]

     shall be the amount taken into account under subclause (I). 
     The Secretary shall adjust the estimate for any calendar year 
     to correct any errors in an estimate for any preceding 
     calendar year.

                                 ______
                                 
  SA 3177. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 336, between lines 16 and 17, insert the following:
       ``(6) College students.--
       ``(A) In general.--Any applicable individual for any month 
     which occurs within an academic period during which the 
     individual is a student (whether full-time or part-time) who 
     meets the requirements of section 484(a)(1) of the Higher 
     Education Act of 1965 (20 U.S.C. 1091(a)(1)) at an 
     institution of higher education (including a community 
     college or trade school) described in such section. For 
     purposes of the preceding sentence, any month between 2 
     consecutive academic periods shall be treated as occurring 
     during an academic period.
       ``(B) Use of increased federal funds.--
       ``(i) In general.--The amount available for any calendar 
     year for expenditure under the reinsurance program under 
     section 1341 of the Patient Protection and Affordable Care 
     Act shall be increased by the amount the Secretary of Health 
     and Human Services estimates under clause (11) for the 
     calendar year. Notwithstanding section 1341(b)(4) of such 
     Act, amounts made available under this subclause for any 
     calendar year after 2018 may be used to make payments under 
     any reinsurance program of a State in the individual market 
     in effect during such calendar year.
       ``(ii) Estimates.--The Secretary of Health and Human 
     Services, in consultation with the Secretary, shall estimate 
     for each calendar year after 2013 the net increase (if any) 
     in Federal revenues, and the net decrease (if any) in Federal 
     outlays, by reason of the application of subparagraph (A). 
     The sum of such amounts (expressed as a positive number) 
     shall be the amount taken into account under clause (i). The 
     Secretary shall adjust the estimate for any calendar year to 
     correct any errors in an estimate for any preceding calendar 
     year.
                                 ______
                                 
  SA 3178. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 156, beginning with line 4, strike all through page 
     157, line 7, and insert the following:
       (D) President, vice president, members of congress, 
     political appointees, and congressional staff in the 
     exchange.--
       (i) In general.--Notwithstanding chapter 89 of title 5, 
     United States Code, or any provision of this title--

       (I) the President, Vice President, each Member of Congress, 
     each political appointee, and each Congressional employee 
     shall be treated as a qualified individual entitled to the 
     right under this paragraph to enroll in a qualified health 
     plan in the individual market offered through an Exchange in 
     the State in which the individual resides; and
       (II) any employer contribution under such chapter on behalf 
     of the President, Vice President, any Member of Congress, any 
     political appointee, and any Congressional employee may be 
     paid only to the issuer of a qualified health plan in which 
     the individual enrolled in through such Exchange and not to 
     the issuer of a plan offered through the Federal employees 
     health benefit program under such chapter.

       (ii) Payments by federal government.--The Secretary, in 
     consultation with the Director of the Office of Personnel 
     Management, shall establish procedures under which--

       (I) the employer contributions under such chapter on behalf 
     of the President, Vice President, and each political 
     appointee are determined and actuarially adjusted for age; 
     and
       (II) the employer contributions may be made directly to an 
     Exchange for payment to an issuer.

       (iii) Political appointee.--In this subparagraph, the term 
     ``political appointee'' means any individual who--

       (I) is employed in a position described under sections 5312 
     through 5316 of title 5, United States Code, (relating to the 
     Executive Schedule);
       (II) is a limited term appointee, limited emergency 
     appointee, or noncareer appointee in the Senior Executive 
     Service, as defined under paragraphs (5), (6), and (7), 
     respectively, of section 3132(a) of title 5, United States 
     Code; or
       (III) is employed in a position in the executive branch of 
     the Government of a confidential or policy-determining 
     character under schedule C of subpart C of part 213 of title 
     5 of the Code of Federal Regulations.

       (iv) Congressional employee.--In this subparagraph, the 
     term ``Congressional employee'' means an employee whose pay 
     is disbursed by the Secretary of the Senate or the Clerk of 
     the House of Representatives.
                                 ______
                                 
  SA 3179. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 334, between lines 18 and 19, insert the following:
       ``(E) Special rule for individuals under age 30.--
       ``(i) In general.--In the case of an applicable individual 
     who has not attained age 30 before the beginning of a 
     calendar year, this paragraph shall be applied to such 
     individual for months during such calendar year by 
     substituting `5 percent' for `8 percent' in subparagraphs (A) 
     and (D).
       ``(ii) Use of increased federal funds.--

       ``(I) In general.--The amount available for any calendar 
     year for expenditure under the reinsurance program under 
     section 1341 of the Patient Protection and Affordable Care 
     Act shall be increased by the amount the Secretary of Health 
     and Human Services estimates under subclause (II) for the 
     calendar year. Notwithstanding section 1341(b)(4) of such 
     Act, amounts made available under this subclause for any 
     calendar year after 2018 may be used to make payments under 
     any reinsurance program of a State in the individual market 
     in effect during such calendar year.
       ``(II) Estimates.--The Secretary of Health and Human 
     Services, in consultation with the Secretary, shall estimate 
     for each calendar year after 2013 the net increase (if any) 
     in Federal revenues, and the net decrease (if any) in Federal 
     outlays, by reason of the application of clause (i). The sum 
     of such amounts (expressed as a positive number) shall be the 
     amount taken into account under subclause (I). The Secretary 
     shall adjust the estimate for any calendar year to correct 
     any errors in an estimate for any preceding calendar year.

                                 ______
                                 
  SA 3180. Mr. GRASSLEY (for himself and Mr. Roberts) submitted an 
amendment intended to be proposed to amendment SA 2786 proposed by Mr. 
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill 
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the 
first-time homebuyers credit in the case of members of the Armed Forces 
and certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 1053, between lines 2 and 3, insert the following:

     SEC. 3403A. PROTECTING SENIORS FROM HIGHER PREMIUMS, REDUCED 
                   BENEFITS, AND RATIONING OF LIFE-SAVING CARE 
                   UNDER MEDICARE PARTS C AND D.

       Section 1899A(c)(2)(A) of the Social Security Act, as added 
     by section 3403, is amended--
       (1) in clause (ii), by striking ``under section 1818, 
     1818A, or 1839''; and
       (2) by striking clause (iv).
                                 ______
                                 
  SA 3181. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 909, strike line 21 and all that follows 
     through page 910, line 19.

                                 ______
                                 
  SA 3182. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end, add the following:

[[Page S13044]]

TITLE X--ENSURING THAT SAVINGS FROM MEDICAL CARE ACCESS PROTECTION ARE 
         USED TO REDUCE THE COVERAGE GAP UNDER MEDICARE PART D

      Subtitle A--Reducing the Coverage Gap Under Medicare Part D

     SEC. 10001. REDUCING THE COVERAGE GAP.

       Section 1860D-2(b) of the Social Security Act (42 U.S.C. 
     1395w-102(b)), as amended by section 3315, is further 
     amended--
       (1) in paragraph (3)(A), by striking ``and (7)'' and 
     inserting ``, (7), and (8)'';
       (2) in paragraph (7), by striking subparagraph (C); and
       (3) by adding at the end the following new paragraph:
       ``(8) Increase in initial coverage limit in subsequent 
     years.--
       ``(A) In general.--For plan years beginning on or after 
     January 1, 2011, the initial coverage limit described in 
     paragraph (3)(B) otherwise applicable shall be increased by 
     an amount which the Chief Actuary of the Centers for Medicare 
     & Medicaid Services determines is equal to the estimated 
     amount of savings during the plan year as a result of the 
     provisions of the Medical Care Access Protection Act of 2009.
       ``(B) Considerations.--In determining the amount of the 
     increase under subparagraph (A) for a plan year, the 
     Secretary shall take into account--
       ``(i) any increase under such paragraph during the 
     preceding year or years; and
       ``(ii) any estimated increase in utilization as a result of 
     the application of this paragraph.
       ``(C) Application.--The provisions of subparagraph (B) of 
     paragraph (7) shall apply to the application of subparagraph 
     (A) of this subparagraph in the same manner as such 
     provisions apply to the application of subparagraph (A) of 
     paragraph (7).''.

               Subtitle B--Medical Care Access Protection

     SEC. 10101. SHORT TITLE.

       This subtitle may be cited as the ``Medical Care Access 
     Protection Act of 2009'' or the ``MCAP Act''.

     SEC. 10102. FINDINGS AND PURPOSE.

       (a) Findings.--
       (1) Effect on health care access and costs.--Congress finds 
     that our current civil justice system is adversely affecting 
     patient access to health care services, better patient care, 
     and cost-efficient health care, in that the health care 
     liability system is a costly and ineffective mechanism for 
     resolving claims of health care liability and compensating 
     injured patients, and is a deterrent to the sharing of 
     information among health care professionals which impedes 
     efforts to improve patient safety and quality of care.
       (2) Effect on interstate commerce.--Congress finds that the 
     health care and insurance industries are industries affecting 
     interstate commerce and the health care liability litigation 
     systems existing throughout the United States are activities 
     that affect interstate commerce by contributing to the high 
     costs of health care and premiums for health care liability 
     insurance purchased by health care system providers.
       (3) Effect on federal spending.--Congress finds that the 
     health care liability litigation systems existing throughout 
     the United States have a significant effect on the amount, 
     distribution, and use of Federal funds because of--
       (A) the large number of individuals who receive health care 
     benefits under programs operated or financed by the Federal 
     Government;
       (B) the large number of individuals who benefit because of 
     the exclusion from Federal taxes of the amounts spent to 
     provide them with health insurance benefits; and
       (C) the large number of health care providers who provide 
     items or services for which the Federal Government makes 
     payments.
       (b) Purpose.--It is the purpose of this subtitle to 
     implement reasonable, comprehensive, and effective health 
     care liability reforms designed to--
       (1) improve the availability of health care services in 
     cases in which health care liability actions have been shown 
     to be a factor in the decreased availability of services;
       (2) reduce the incidence of ``defensive medicine'' and 
     lower the cost of health care liability insurance, all of 
     which contribute to the escalation of health care costs;
       (3) ensure that persons with meritorious health care injury 
     claims receive fair and adequate compensation, including 
     reasonable noneconomic damages;
       (4) improve the fairness and cost-effectiveness of our 
     current health care liability system to resolve disputes 
     over, and provide compensation for, health care liability by 
     reducing uncertainty in the amount of compensation provided 
     to injured individuals; and
       (5) provide an increased sharing of information in the 
     health care system which will reduce unintended injury and 
     improve patient care.

     SEC. 10103. DEFINITIONS.

       In this subtitle:
       (1) Alternative dispute resolution system; adr.--The term 
     ``alternative dispute resolution system'' or ``ADR'' means a 
     system that provides for the resolution of health care 
     lawsuits in a manner other than through a civil action 
     brought in a State or Federal court.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings a health care lawsuit, including a person who asserts 
     or claims a right to legal or equitable contribution, 
     indemnity or subrogation, arising out of a health care 
     liability claim or action, and any person on whose behalf 
     such a claim is asserted or such an action is brought, 
     whether deceased, incompetent, or a minor.
       (3) Collateral source benefits.--The term ``collateral 
     source benefits'' means any amount paid or reasonably likely 
     to be paid in the future to or on behalf of the claimant, or 
     any service, product or other benefit provided or reasonably 
     likely to be provided in the future to or on behalf of the 
     claimant, as a result of the injury or wrongful death, 
     pursuant to--
       (A) any State or Federal health, sickness, income-
     disability, accident, or workers' compensation law;
       (B) any health, sickness, income-disability, or accident 
     insurance that provides health benefits or income-disability 
     coverage;
       (C) any contract or agreement of any group, organization, 
     partnership, or corporation to provide, pay for, or reimburse 
     the cost of medical, hospital, dental, or income disability 
     benefits; and
       (D) any other publicly or privately funded program.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means objectively verifiable monetary losses 
     incurred as a result of the provision of, use of, or payment 
     for (or failure to provide, use, or pay for) health care 
     services or medical products, such as past and future medical 
     expenses, loss of past and future earnings, cost of obtaining 
     domestic services, loss of employment, and loss of business 
     or employment opportunities, damages for physical and 
     emotional pain, suffering, inconvenience, physical 
     impairment, mental anguish, disfigurement, loss of enjoyment 
     of life, loss of society and companionship, loss of 
     consortium (other than loss of domestic service), hedonic 
     damages, injury to reputation, and all other nonpecuniary 
     losses of any kind or nature. Such term includes economic 
     damages and noneconomic damages, as such terms are defined in 
     this section.
       (5) Contingent fee.--The term ``contingent fee'' includes 
     all compensation to any person or persons which is payable 
     only if a recovery is effected on behalf of one or more 
     claimants.
       (6) Economic damages.--The term ``economic damages'' means 
     objectively verifiable monetary losses incurred as a result 
     of the provision of, use of, or payment for (or failure to 
     provide, use, or pay for) health care services or medical 
     products, such as past and future medical expenses, loss of 
     past and future earnings, cost of obtaining domestic 
     services, loss of employment, and loss of business or 
     employment opportunities.
       (7) Health care goods or services.--The term ``health care 
     goods or services'' means any goods or services provided by a 
     health care institution, provider, or by any individual 
     working under the supervision of a health care provider, that 
     relates to the diagnosis, prevention, care, or treatment of 
     any human disease or impairment, or the assessment of the 
     health of human beings.
       (8) Health care institution.--The term ``health care 
     institution'' means any entity licensed under Federal or 
     State law to provide health care services (including but not 
     limited to ambulatory surgical centers, assisted living 
     facilities, emergency medical services providers, hospices, 
     hospitals and hospital systems, nursing homes, or other 
     entities licensed to provide such services).
       (9) Health care lawsuit.--The term ``health care lawsuit'' 
     means any health care liability claim concerning the 
     provision of health care goods or services affecting 
     interstate commerce, or any health care liability action 
     concerning the provision of (or the failure to provide) 
     health care goods or services affecting interstate commerce, 
     brought in a State or Federal court or pursuant to an 
     alternative dispute resolution system, against a health care 
     provider or a health care institution regardless of the 
     theory of liability on which the claim is based, or the 
     number of claimants, plaintiffs, defendants, or other 
     parties, or the number of claims or causes of action, in 
     which the claimant alleges a health care liability claim.
       (10) Health care liability action.--The term ``health care 
     liability action'' means a civil action brought in a State or 
     Federal Court or pursuant to an alternative dispute 
     resolution system, against a health care provider or a health 
     care institution regardless of the theory of liability on 
     which the claim is based, or the number of plaintiffs, 
     defendants, or other parties, or the number of causes of 
     action, in which the claimant alleges a health care liability 
     claim.
       (11) Health care liability claim.--The term ``health care 
     liability claim'' means a demand by any person, whether or 
     not pursuant to ADR, against a health care provider or health 
     care institution, including third-party claims, cross-claims, 
     counter-claims, or contribution claims, which are based upon 
     the provision of, use of, or payment for (or the failure to 
     provide, use, or pay for) health care services, regardless of 
     the theory of liability on which the claim is based, or the 
     number of plaintiffs, defendants, or other parties, or the 
     number of causes of action.
       (12) Health care provider.--
       (A) In general.--The term ``health care provider'' means 
     any person (including but not limited to a physician (as 
     defined by section 1861(r) of the Social Security Act (42 
     U.S.C. 1395x(r)), registered nurse, dentist, podiatrist, 
     pharmacist, chiropractor, or optometrist) required by State 
     or Federal law to be

[[Page S13045]]

     licensed, registered, or certified to provide health care 
     services, and being either so licensed, registered, or 
     certified, or exempted from such requirement by other statute 
     or regulation.
       (B) Treatment of certain professional associations.--For 
     purposes of this subtitle, a professional association that is 
     organized under State law by an individual physician or group 
     of physicians, a partnership or limited liability partnership 
     formed by a group of physicians, a nonprofit health 
     corporation certified under State law, or a company formed by 
     a group of physicians under State law shall be treated as a 
     health care provider under subparagraph (A).
       (13) Malicious intent to injure.--The term ``malicious 
     intent to injure'' means intentionally causing or attempting 
     to cause physical injury other than providing health care 
     goods or services.
       (14) Noneconomic damages.--The term ``noneconomic damages'' 
     means damages for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), hedonic damages, injury to reputation, and 
     all other nonpecuniary losses of any kind or nature.
       (15) Punitive damages.--The term ``punitive damages'' means 
     damages awarded, for the purpose of punishment or deterrence, 
     and not solely for compensatory purposes, against a health 
     care provider or health care institution. Punitive damages 
     are neither economic nor noneconomic damages.
       (16) Recovery.--The term ``recovery'' means the net sum 
     recovered after deducting any disbursements or costs incurred 
     in connection with prosecution or settlement of the claim, 
     including all costs paid or advanced by any person. Costs of 
     health care incurred by the plaintiff and the attorneys' 
     office overhead costs or charges for legal services are not 
     deductible disbursements or costs for such purpose.
       (17) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, the Trust Territory of the Pacific Islands, 
     and any other territory or possession of the United States, 
     or any political subdivision thereof.

     SEC. 10104. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

       (a) In General.--Except as otherwise provided for in this 
     section, the time for the commencement of a health care 
     lawsuit shall be 3 years after the date of manifestation of 
     injury or 1 year after the claimant discovers, or through the 
     use of reasonable diligence should have discovered, the 
     injury, whichever occurs first.
       (b) General Exception.--The time for the commencement of a 
     health care lawsuit shall not exceed 3 years after the date 
     of manifestation of injury unless the tolling of time was 
     delayed as a result of--
       (1) fraud;
       (2) intentional concealment; or
       (3) the presence of a foreign body, which has no 
     therapeutic or diagnostic purpose or effect, in the person of 
     the injured person.
       (c) Minors.--An action by a minor shall be commenced within 
     3 years from the date of the alleged manifestation of injury 
     except that if such minor is under the full age of 6 years, 
     such action shall be commenced within 3 years of the 
     manifestation of injury, or prior to the eighth birthday of 
     the minor, whichever provides a longer period. Such time 
     limitation shall be tolled for minors for any period during 
     which a parent or guardian and a health care provider or 
     health care institution have committed fraud or collusion in 
     the failure to bring an action on behalf of the injured 
     minor.
       (d) Rule 11 Sanctions.--Whenever a Federal or State court 
     determines (whether by motion of the parties or whether on 
     the motion of the court) that there has been a violation of 
     Rule 11 of the Federal Rules of Civil Procedure (or a similar 
     violation of applicable State court rules) in a health care 
     liability action to which this subtitle applies, the court 
     shall impose upon the attorneys, law firms, or pro se 
     litigants that have violated Rule 11 or are responsible for 
     the violation, an appropriate sanction, which shall include 
     an order to pay the other party or parties for the reasonable 
     expenses incurred as a direct result of the filing of the 
     pleading, motion, or other paper that is the subject of the 
     violation, including a reasonable attorneys' fee. Such 
     sanction shall be sufficient to deter repetition of such 
     conduct or comparable conduct by others similarly situated, 
     and to compensate the party or parties injured by such 
     conduct.

     SEC. 10105. COMPENSATING PATIENT INJURY.

       (a) Unlimited Amount of Damages for Actual Economic Losses 
     in Health Care Lawsuits.--In any health care lawsuit, nothing 
     in this subtitle shall limit the recovery by a claimant of 
     the full amount of the available economic damages, 
     notwithstanding the limitation contained in subsection (b).
       (b) Additional Noneconomic Damages.--
       (1) Health care providers.--In any health care lawsuit 
     where final judgment is rendered against a health care 
     provider, the amount of noneconomic damages recovered from 
     the provider, if otherwise available under applicable Federal 
     or State law, may be as much as $250,000, regardless of the 
     number of parties other than a health care institution 
     against whom the action is brought or the number of separate 
     claims or actions brought with respect to the same 
     occurrence.
       (2) Health care institutions.--
       (A) Single institution.--In any health care lawsuit where 
     final judgment is rendered against a single health care 
     institution, the amount of noneconomic damages recovered from 
     the institution, if otherwise available under applicable 
     Federal or State law, may be as much as $250,000, regardless 
     of the number of parties against whom the action is brought 
     or the number of separate claims or actions brought with 
     respect to the same occurrence.
       (B) Multiple institutions.--In any health care lawsuit 
     where final judgment is rendered against more than one health 
     care institution, the amount of noneconomic damages recovered 
     from each institution, if otherwise available under 
     applicable Federal or State law, may be as much as $250,000, 
     regardless of the number of parties against whom the action 
     is brought or the number of separate claims or actions 
     brought with respect to the same occurrence, except that the 
     total amount recovered from all such institutions in such 
     lawsuit shall not exceed $500,000.
       (c) No Discount of Award for Noneconomic Damages.--In any 
     health care lawsuit--
       (1) an award for future noneconomic damages shall not be 
     discounted to present value;
       (2) the jury shall not be informed about the maximum award 
     for noneconomic damages under subsection (b);
       (3) an award for noneconomic damages in excess of the 
     limitations provided for in subsection (b) shall be reduced 
     either before the entry of judgment, or by amendment of the 
     judgment after entry of judgment, and such reduction shall be 
     made before accounting for any other reduction in damages 
     required by law; and
       (4) if separate awards are rendered for past and future 
     noneconomic damages and the combined awards exceed the 
     limitations described in subsection (b), the future 
     noneconomic damages shall be reduced first.
       (d) Fair Share Rule.--In any health care lawsuit, each 
     party shall be liable for that party's several share of any 
     damages only and not for the share of any other person. Each 
     party shall be liable only for the amount of damages 
     allocated to such party in direct proportion to such party's 
     percentage of responsibility. A separate judgment shall be 
     rendered against each such party for the amount allocated to 
     such party. For purposes of this section, the trier of fact 
     shall determine the proportion of responsibility of each 
     party for the claimant's harm.

     SEC. 10106. MAXIMIZING PATIENT RECOVERY.

       (a) Court Supervision of Share of Damages Actually Paid to 
     Claimants.--
       (1) In general.--In any health care lawsuit, the court 
     shall supervise the arrangements for payment of damages to 
     protect against conflicts of interest that may have the 
     effect of reducing the amount of damages awarded that are 
     actually paid to claimants.
       (2) Contingency fees.--
       (A) In general.--In any health care lawsuit in which the 
     attorney for a party claims a financial stake in the outcome 
     by virtue of a contingent fee, the court shall have the power 
     to restrict the payment of a claimant's damage recovery to 
     such attorney, and to redirect such damages to the claimant 
     based upon the interests of justice and principles of equity.
       (B) Limitation.--The total of all contingent fees for 
     representing all claimants in a health care lawsuit shall not 
     exceed the following limits:
       (i) 40 percent of the first $50,000 recovered by the 
     claimant(s).
       (ii) 33\1/3\ percent of the next $50,000 recovered by the 
     claimant(s).
       (iii) 25 percent of the next $500,000 recovered by the 
     claimant(s).
       (iv) 15 percent of any amount by which the recovery by the 
     claimant(s) is in excess of $600,000.
       (b) Applicability.--
       (1) In general.--The limitations in subsection (a) shall 
     apply whether the recovery is by judgment, settlement, 
     mediation, arbitration, or any other form of alternative 
     dispute resolution.
       (2) Minors.--In a health care lawsuit involving a minor or 
     incompetent person, a court retains the authority to 
     authorize or approve a fee that is less than the maximum 
     permitted under this section.
       (c) Expert Witnesses.--
       (1) Requirement.--No individual shall be qualified to 
     testify as an expert witness concerning issues of negligence 
     in any health care lawsuit against a defendant unless such 
     individual--
       (A) except as required under paragraph (2), is a health 
     care professional who--
       (i) is appropriately credentialed or licensed in 1 or more 
     States to deliver health care services; and
       (ii) typically treats the diagnosis or condition or 
     provides the type of treatment under review; and
       (B) can demonstrate by competent evidence that, as a result 
     of training, education, knowledge, and experience in the 
     evaluation, diagnosis, and treatment of the disease or injury 
     which is the subject matter of the lawsuit against the 
     defendant, the individual was substantially familiar with 
     applicable standards of care and practice as they relate to 
     the act or omission which is the subject of the lawsuit on 
     the date of the incident.
       (2) Physician review.--In a health care lawsuit, if the 
     claim of the plaintiff involved

[[Page S13046]]

     treatment that is recommended or provided by a physician 
     (allopathic or osteopathic), an individual shall not be 
     qualified to be an expert witness under this subsection with 
     respect to issues of negligence concerning such treatment 
     unless such individual is a physician.
       (3) Specialties and subspecialties.--With respect to a 
     lawsuit described in paragraph (1), a court shall not permit 
     an expert in one medical specialty or subspecialty to testify 
     against a defendant in another medical specialty or 
     subspecialty unless, in addition to a showing of substantial 
     familiarity in accordance with paragraph (1)(B), there is a 
     showing that the standards of care and practice in the two 
     specialty or subspecialty fields are similar.
       (4) Limitation.--The limitations in this subsection shall 
     not apply to expert witnesses testifying as to the degree or 
     permanency of medical or physical impairment.

     SEC. 10107. ADDITIONAL HEALTH BENEFITS.

       (a) In General.--The amount of any damages received by a 
     claimant in any health care lawsuit shall be reduced by the 
     court by the amount of any collateral source benefits to 
     which the claimant is entitled, less any insurance premiums 
     or other payments made by the claimant (or by the spouse, 
     parent, child, or legal guardian of the claimant) to obtain 
     or secure such benefits.
       (b) Preservation of Current Law.--Where a payor of 
     collateral source benefits has a right of recovery by 
     reimbursement or subrogation and such right is permitted 
     under Federal or State law, subsection (a) shall not apply.
       (c) Application of Provision.--This section shall apply to 
     any health care lawsuit that is settled or resolved by a fact 
     finder.

     SEC. 10108. PUNITIVE DAMAGES.

       (a) Punitive Damages Permitted.--
       (1) In general.--Punitive damages may, if otherwise 
     available under applicable State or Federal law, be awarded 
     against any person in a health care lawsuit only if it is 
     proven by clear and convincing evidence that such person 
     acted with malicious intent to injure the claimant, or that 
     such person deliberately failed to avoid unnecessary injury 
     that such person knew the claimant was substantially certain 
     to suffer.
       (2) Filing of lawsuit.--No demand for punitive damages 
     shall be included in a health care lawsuit as initially 
     filed. A court may allow a claimant to file an amended 
     pleading for punitive damages only upon a motion by the 
     claimant and after a finding by the court, upon review of 
     supporting and opposing affidavits or after a hearing, after 
     weighing the evidence, that the claimant has established by a 
     substantial probability that the claimant will prevail on the 
     claim for punitive damages.
       (3) Separate proceeding.--At the request of any party in a 
     health care lawsuit, the trier of fact shall consider in a 
     separate proceeding--
       (A) whether punitive damages are to be awarded and the 
     amount of such award; and
       (B) the amount of punitive damages following a 
     determination of punitive liability.

     If a separate proceeding is requested, evidence relevant only 
     to the claim for punitive damages, as determined by 
     applicable State law, shall be inadmissible in any proceeding 
     to determine whether compensatory damages are to be awarded.
       (4) Limitation where no compensatory damages are awarded.--
     In any health care lawsuit where no judgment for compensatory 
     damages is rendered against a person, no punitive damages may 
     be awarded with respect to the claim in such lawsuit against 
     such person.
       (b) Determining Amount of Punitive Damages.--
       (1) Factors considered.--In determining the amount of 
     punitive damages under this section, the trier of fact shall 
     consider only the following:
       (A) the severity of the harm caused by the conduct of such 
     party;
       (B) the duration of the conduct or any concealment of it by 
     such party;
       (C) the profitability of the conduct to such party;
       (D) the number of products sold or medical procedures 
     rendered for compensation, as the case may be, by such party, 
     of the kind causing the harm complained of by the claimant;
       (E) any criminal penalties imposed on such party, as a 
     result of the conduct complained of by the claimant; and
       (F) the amount of any civil fines assessed against such 
     party as a result of the conduct complained of by the 
     claimant.
       (2) Maximum award.--The amount of punitive damages awarded 
     in a health care lawsuit may not exceed an amount equal to 
     two times the amount of economic damages awarded in the 
     lawsuit or $250,000, whichever is greater. The jury shall not 
     be informed of the limitation under the preceding sentence.
       (c) Liability of Health Care Providers.--
       (1) In general.--A health care provider who prescribes, or 
     who dispenses pursuant to a prescription, a drug, biological 
     product, or medical device approved by the Food and Drug 
     Administration, for an approved indication of the drug, 
     biological product, or medical device, shall not be named as 
     a party to a product liability lawsuit invoking such drug, 
     biological product, or medical device and shall not be liable 
     to a claimant in a class action lawsuit against the 
     manufacturer, distributor, or product seller of such drug, 
     biological product, or medical device.
       (2) Medical product.--The term ``medical product'' means a 
     drug or device intended for humans. The terms ``drug'' and 
     ``device'' have the meanings given such terms in sections 
     201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic 
     Act (21 U.S.C. 321), respectively, including any component or 
     raw material used therein, but excluding health care 
     services.

     SEC. 10109. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO 
                   CLAIMANTS IN HEALTH CARE LAWSUITS.

       (a) In General.--In any health care lawsuit, if an award of 
     future damages, without reduction to present value, equaling 
     or exceeding $50,000 is made against a party with sufficient 
     insurance or other assets to fund a periodic payment of such 
     a judgment, the court shall, at the request of any party, 
     enter a judgment ordering that the future damages be paid by 
     periodic payments in accordance with the Uniform Periodic 
     Payment of Judgments Act promulgated by the National 
     Conference of Commissioners on Uniform State Laws.
       (b) Applicability.--This section applies to all actions 
     which have not been first set for trial or retrial before the 
     effective date of this subtitle.

     SEC. 10110. EFFECT ON OTHER LAWS.

       (a) General Vaccine Injury.--
       (1) In general.--To the extent that title XXI of the Public 
     Health Service Act establishes a Federal rule of law 
     applicable to a civil action brought for a vaccine-related 
     injury or death--
       (A) this subtitle shall not affect the application of the 
     rule of law to such an action; and
       (B) any rule of law prescribed by this subtitle in conflict 
     with a rule of law of such title XXI shall not apply to such 
     action.
       (2) Exception.--If there is an aspect of a civil action 
     brought for a vaccine-related injury or death to which a 
     Federal rule of law under title XXI of the Public Health 
     Service Act does not apply, then this subtitle or otherwise 
     applicable law (as determined under this subtitle) will apply 
     to such aspect of such action.
       (b) Smallpox Vaccine Injury.--
       (1) In general.--To the extent that part C of title II of 
     the Public Health Service Act establishes a Federal rule of 
     law applicable to a civil action brought for a smallpox 
     vaccine-related injury or death--
       (A) this subtitle shall not affect the application of the 
     rule of law to such an action; and
       (B) any rule of law prescribed by this subtitle in conflict 
     with a rule of law of such part C shall not apply to such 
     action.
       (2) Exception.--If there is an aspect of a civil action 
     brought for a smallpox vaccine-related injury or death to 
     which a Federal rule of law under part C of title II of the 
     Public Health Service Act does not apply, then this subtitle 
     or otherwise applicable law (as determined under this 
     subtitle) will apply to such aspect of such action.
       (c) Other Federal Law.--Except as provided in this section, 
     nothing in this subtitle shall be deemed to affect any 
     defense available, or any limitation on liability that 
     applies to, a defendant in a health care lawsuit or action 
     under any other provision of Federal law.

     SEC. 10111. STATE FLEXIBILITY AND PROTECTION OF STATES' 
                   RIGHTS.

       (a) Health Care Lawsuits.--The provisions governing health 
     care lawsuits set forth in this subtitle shall preempt, 
     subject to subsections (b) and (c), State law to the extent 
     that State law prevents the application of any provisions of 
     law established by or under this subtitle. The provisions 
     governing health care lawsuits set forth in this subtitle 
     supersede chapter 171 of title 28, United States Code, to the 
     extent that such chapter--
       (1) provides for a greater amount of damages or contingent 
     fees, a longer period in which a health care lawsuit may be 
     commenced, or a reduced applicability or scope of periodic 
     payment of future damages, than provided in this subtitle; or
       (2) prohibits the introduction of evidence regarding 
     collateral source benefits.
       (b) Preemption of Certain State Laws.--No provision of this 
     subtitle shall be construed to preempt any State law (whether 
     effective before, on, or after the date of the enactment of 
     this Act) that specifies a particular monetary amount of 
     compensatory or punitive damages (or the total amount of 
     damages) that may be awarded in a health care lawsuit, 
     regardless of whether such monetary amount is greater or 
     lesser than is provided for under this subtitle, 
     notwithstanding section 10105(a).
       (c) Protection of State's Rights and Other Laws.--
       (1) In general.--Any issue that is not governed by a 
     provision of law established by or under this subtitle 
     (including the State standards of negligence) shall be 
     governed by otherwise applicable Federal or State law.
       (2) Rule of construction.--Nothing in this subtitle shall 
     be construed to--
       (A) preempt or supersede any Federal or State law that 
     imposes greater procedural or substantive protections (such 
     as a shorter statute of limitations) for a health care 
     provider or health care institution from liability, loss, or 
     damages than those provided by this subtitle;
       (B) preempt or supercede any State law that permits and 
     provides for the enforcement of any arbitration agreement 
     related to a health care liability claim whether enacted 
     prior to or after the date of enactment of this Act;
       (C) create a cause of action that is not otherwise 
     available under Federal or State law; or

[[Page S13047]]

       (D) affect the scope of preemption of any other Federal 
     law.

     SEC. 10112. APPLICABILITY; EFFECTIVE DATE.

       This subtitle shall apply to any health care lawsuit 
     brought in a Federal or State court, or subject to an 
     alternative dispute resolution system, that is initiated on 
     or after the date of the enactment of this Act, except that 
     any health care lawsuit arising from an injury occurring 
     prior to the date of enactment of this Act shall be governed 
     by the applicable statute of limitations provisions in effect 
     at the time the injury occurred.
                                 ______
                                 
  SA 3183. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill H.R. 3590, to amend the Internal Revenue Code of 1986 
to modify the first-time homebuyers credit in the case of members of 
the Armed Forces and certain other Federal employees, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROTECTING MIDDLE CLASS FAMILIES FROM TAX INCREASES.

       It is the sense of the Senate that the Senate should reject 
     any procedural maneuver that would raise taxes on middle 
     class families, such as a motion to commit the pending 
     legislation to the Committee on Finance, which is designed to 
     kill legislation that provides tax cuts for American workers 
     and families, including the affordability tax credit and the 
     small business tax credit.
                                 ______
                                 
  SA 3184. Mr. CASEY submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place in title IX, insert the following:

Subtitle--Expansion of Adoption Credit and Adoption Assistance Programs

     SEC. _01. EXPANSION OF ADOPTION CREDIT AND ADOPTION 
                   ASSISTANCE PROGRAMS.

       (a) Increase in Dollar Limitation.--
       (1) Adoption credit.--
       (A) In general.--Paragraph (1) of section 23(b) of the 
     Internal Revenue Code of 1986 (relating to dollar limitation) 
     is amended by striking ``$10,000'' and inserting ``$15,000''.
       (B) Child with special needs.--Paragraph (3) of section 
     23(a) of such Code (relating to $10,000 credit for adoption 
     of child with special needs regardless of expenses) is 
     amended--
       (i) in the text by striking ``$10,000'' and inserting 
     ``$15,000'', and
       (ii) in the heading by striking ``$10,000'' and inserting 
     ``$15,000''.
       (C) Conforming amendment to inflation adjustment.--
     Subsection (h) of section 23 of such Code (relating to 
     adjustments for inflation) is amended to read as follows:
       ``(h) Adjustments for Inflation.--
       ``(1) Dollar limitations.--In the case of a taxable year 
     beginning after December 31, 2009, each of the dollar amounts 
     in subsections (a)(3) and (b)(1) shall be increased by an 
     amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2008' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.
       ``(2) Income limitation.--In the case of a taxable year 
     beginning after December 31, 2002, the dollar amount in 
     subsection (b)(2)(A)(i) shall be increased by an amount equal 
     to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.''.
       (2) Adoption assistance programs.--
       (A) In general.--Paragraph (1) of section 137(b) of the 
     Internal Revenue Code of 1986 (relating to dollar limitation) 
     is amended by striking ``$10,000'' and inserting ``$15,000''.
       (B) Child with special needs.--Paragraph (2) of section 
     137(a) of such Code (relating to $10,000 exclusion for 
     adoption of child with special needs regardless of expenses) 
     is amended--
       (i) in the text by striking ``$10,000'' and inserting 
     ``$15,000'', and
       (ii) in the heading by striking ``$10,000'' and inserting 
     ``$15,000''.
       (C) Conforming amendment to inflation adjustment.--
     Subsection (f) of section 137 of such Code (relating to 
     adjustments for inflation) is amended to read as follows:
       ``(f) Adjustments for Inflation.--
       ``(1) Dollar limitations.--In the case of a taxable year 
     beginning after December 31, 2009, each of the dollar amounts 
     in subsections (a)(2) and (b)(1) shall be increased by an 
     amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2008' 
     for `calendar year 1992' in subparagraph (B) thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.
       ``(2) Income limitation.--In the case of a taxable year 
     beginning after December 31, 2002, the dollar amount in 
     subsection (b)(2)(A) shall be increased by an amount equal 
     to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph thereof.

     If any amount as increased under the preceding sentence is 
     not a multiple of $10, such amount shall be rounded to the 
     nearest multiple of $10.''.
       (b) Credit Made Refundable.--
       (1) Credit moved to subpart relating to refundable 
     credits.--The Internal Revenue Code of 1986 is amended--
       (A) by redesignating section 23, as amended by subsection 
     (a), as section 36B, and
       (B) by moving section 36B (as so redesignated) from subpart 
     A of part IV of subchapter A of chapter 1 to the location 
     immediately before section 37 in subpart C of part IV of 
     subchapter A of chapter 1.
       (2) Conforming amendments.--
       (A) Section 24(b)(3)(B) of such Code is amended by striking 
     ``23,''.
       (B) Section 25(e)(1)(C) of such Code is amended by striking 
     ``23,'' both places it appears.
       (C) Section 25A(i)(5)(B) of such Code is amended by 
     striking ``23, 25D,'' and inserting ``25D''.
       (D) Section 25B(g)(2) of such Code is amended by striking 
     ``23,''.
       (E) Section 26(a)(1) of such Code is amended by striking 
     ``23,''.
       (F) Section 30(c)(2)(B)(ii) of such Code is amended by 
     striking ``23, 25D,'' and inserting ``25D''.
       (G) Section 30B(g)(2)(B)(ii) of such Code is amended by 
     striking ``23,''.
       (H) Section 30D(c)(2)(B)(ii) of such Code is amended by 
     striking ``sections 23 and'' and inserting ``section''.
       (I) Section 36B of such Code, as so redesignated, is 
     amended--
       (i) by striking paragraph (4) of subsection (b), and
       (ii) by striking subsection (c).
       (J) Section 137 of such Code is amended--
       (i) by striking ``section 23(d)'' in subsection (d) and 
     inserting ``section 36B(d)'', and
       (ii) by striking ``section 23'' in subsection (e) and 
     inserting ``section 36B''.
       (K) Section 904(i) of such Code is amended by striking 
     ``23,''.
       (L) Section 1016(a)(26) is amended by striking ``23(g)'' 
     and inserting ``36B(g)''.
       (M) Section 1400C(d) of such Code is amended by striking 
     ``23,''.
       (N) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code of 1986 is amended by 
     striking the item relating to section 23.
       (O) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting ``36B,'' after ``36A,''.
       (P) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 36A the following new item:

``Sec. 36B. Adoption expenses.''.

       (c) Extension of Credit and Adoption Assistance Programs.--
       (1) In general.--Section 36B of the Internal Revenue Code 
     of 1986, as redesignated by subsection (b), is amended by 
     adding at the end the following new subsection:
       ``(i) Termination.--This section shall not apply to 
     expenses paid or incurred in taxable years beginning after 
     December 31, 2014.''.
       (2) In general.--Section 137 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(g) Termination.--This section shall not apply to 
     expenses paid or incurred in taxable years beginning after 
     December 31, 2014.''.
       (3) Sunset for modifications made by egtrra to adoption 
     credit removed.--Title IX of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 shall not apply to the 
     amendments made by section 202 of such Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.
                                 ______
                                 
  SA 3185. Mr. BROWN submitted an amendment intended to be proposed by 
Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the 
bill H.R. 3590, to amend the Internal Revenue Code of 1986 to modify 
the first-time homebuyers credit in the case of members of the Armed 
Forces and certain other Federal employees, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 553, between lines 14 and 15, insert the following:

[[Page S13048]]

     SEC. 2721. INCREASED PAYMENTS FOR PEDIATRIC CARE UNDER 
                   MEDICAID.

       (a) In General.--
       (1) Fee-for-service payments.--Section 1902 of the Social 
     Security Act (42 U.S.C. 1396b), as amended by section 
     2001(b)(2), is amended--
       (A) in subsection (a)(13)--
       (i) by striking ``and'' at the end of subparagraph (A);
       (ii) by adding ``and'' at the end of subparagraph (B); and
       (iii) by adding at the end the following new subparagraph:
       ``(C) payment for pediatric care services (as defined in 
     subsection (hh)(1)) furnished by physicians (as defined in 
     section 1861(r)) (or for services furnished by other health 
     care professionals that would be pediatric care services 
     under such subsection if furnished by a physician) at a rate 
     not less than 80 percent of the payment rate that would be 
     applicable if the adjustment described in subsection (hh)(2) 
     were to apply to such services under part B of title XVIII 
     (or, if there is no payment rate for such services under part 
     B of title XVIII, the payment rate for the most comparable 
     services, as determined by the Secretary in consultation with 
     the Medicaid and CHIP Payment and Access Commission 
     established under section 1900 and adjusted as appropriate 
     for a pediatric population) for services furnished in 2010, 
     90 percent of such adjusted payment rate for such services 
     furnished in 2011, and 100 percent of such adjusted payment 
     rate for such services furnished in 2012 and each subsequent 
     year;''; and
       (B) by adding at the end the following new subsection:
       ``(hh) Increased Payment for Pediatric Care.--For purposes 
     of subsection (a)(13)(C):
       ``(1) Pediatric care services defined.--The term `pediatric 
     care services' means evaluation and management services, 
     without regard to the specialty of the physician or hospital 
     furnishing the services, that are procedure codes (for 
     services covered under title XVIII) for services in the 
     category designated Evaluation and Management in the 
     Healthcare Common Procedure Coding System (established by the 
     Secretary under section 1848(c)(5) as of December 31, 2009, 
     and as subsequently modified by the Secretary) and that are 
     furnished to an individual who is enrolled in the State plan 
     under this title who has not attained age 19. Such term 
     includes procedure codes established by the Secretary, in 
     consultation with the Medicaid and CHIP Payment and Access 
     Commission established under section 1900, for services 
     furnished under State plans under this title to individuals 
     who have not attained age 19 and for which there is not an a 
     procedure code (or a procedure code that the Secretary, in 
     consultation with such Commission, determines is comparable) 
     established under the Healthcare Common Procedure Coding 
     System.
       ``(2) Adjustment.--The adjustment described in this 
     paragraph is the substitution of 1.25 percent for the update 
     otherwise provided under section 1848(d)(4) for each year 
     beginning with 2010.''.
       (2) Under medicaid managed care plans.--Section 1932(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 Pediatric Care Services''; and
       (B) by inserting before the period at the end the 
     following: ``and, in the case of pediatric 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) Increased FMAP.--Section 1905 of such Act (42 U.S.C. 
     1396d), as amended by sections 2006 and 4107(a)(2), is 
     amended
       (1) in the first sentence of subsection (b), by striking 
     ``and'' before ``(4)'' and by inserting before the period at 
     the end the following: ``, and (5) 100 percent (for periods 
     beginning with 2010) with respect to amounts described in 
     subsection (cc)''; and
       (2) by adding at the end the following new subsection:
       ``(cc) For purposes of section 1905(b)(5), the amounts 
     described in this subsection are the following:
       ``(1)(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 the date of enactment of the Patient 
     Protection and Affordable Care Act.
       ``(B) Subparagraph (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 subparagraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2010.
                                 ______
                                 
  SA 3186. Mr. BROWN submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 729, strike line 21 and all that follows 
     through line 13 on page 730, and insert the following:
       ``(xv) Promoting--

       ``(I) improved quality and reduced cost by developing a 
     collaborative of high-quality, low-cost health care 
     institutions that is responsible for--

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

       ``(II) improved quality and reduced cost by developing a 
     similarly focused collaborative of pediatric providers and 
     institutions through the Medicaid and CHIP programs.''.

                                 ______
                                 
  SA 3187. Mr. WYDEN (for himself and Mr. Crapo) submitted an amendment 
intended to be proposed to amendment SA 2786 proposed by Mr. Reid (for 
himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill H.R. 3590, 
to amend the Internal Revenue Code of 1986 to modify the first-time 
homebuyers credit in the case of members of the Armed Forces and 
certain other Federal employees, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 828, between lines 3 and 4, insert the following:

     SEC. 3130. MEDICARE CRITICAL ACCESS HOSPITAL PROVISIONS.

       (a) Flexibility in the Manner in Which Beds Are Counted for 
     Purposes of Determining Whether a Hospital May Be Designated 
     as a Critical Access Hospital Under the Medicare Program.--
       (1) In general.--Section 1820(c)(2)(B) of the Social 
     Security Act (42 U.S.C. 1395i-4(c)(2)(B)) is amended--
       (A) in clause (iii), by inserting ``(or 20, as determined 
     on an annual, average basis)'' after ``25''; and
       (B) by adding at the end the following flush sentence:

     ``In determining the number of beds for purposes of clause 
     (iii), only beds that are occupied shall be counted.''.
       (2) Effective date.--The amendments made by this subsection 
     take effect on January 1, 2010.
       (b) Critical Access Hospital Inpatient Bed Limitation 
     Exemption for Beds Provided to Certain Veterans.--
       (1) In general.--Section 1820(c) of the Social Security Act 
     (42 U.S.C. 1395i-4(c)) is amended by adding at the end the 
     following new paragraph:
       ``(3) Exemption from bed limitation.--For purposes of this 
     section, no acute care inpatient bed shall be counted against 
     any numerical limitation specified under this section for 
     such a bed (or for inpatient bed days with respect to such a 
     bed) if the bed is provided for an individual who is a 
     veteran and the Department of Veterans Affairs referred the 
     individual for care in the hospital or is coordinating such 
     care with other care being provided by such Department.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to cost reporting periods beginning on or after 
     the date of the enactment of this Act
                                 ______
                                 
  SA 3188. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 2074, after line 25, add the following:

     SEC. ___. TREATMENT OF HRAS.

       For purposes of the provisions of, and amendments made by, 
     this Act, and the provisions of any other law, funds from a 
     health reimbursement arrangement used in whole or in part by 
     an individual to purchase an individual or family health 
     benefits plan shall not be considered or construed as an 
     employer contribution and such individual or family plan 
     shall not be considered or construed as a group health 
     benefits plan.
                                 ______
                                 
  SA 3189. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:


[[Page S13049]]


       On page 1053, between lines 2 and 3, insert the following:

     SEC. 3404. AUTHORITY TO VARY THE AMOUNT OF THE MEDICARE PART 
                   B PREMIUM FOR NEW BENEFICIARIES THAT SMOKE AND 
                   BENEFICIARIES THAT MAKE HEALTHY CHOICES.

       Section 1839 of the Social Security Act (42 U.S.C. 1395r) 
     is amended--
       (1) in subsection (a)(2), by striking ``and (i)'' and 
     inserting ``(i), and (j)''; and
       (2) by adding at the end the following new subsection:
       ``(j) Authority to Vary the Amount of the Premium for 
     Beneficiaries That Smoke and Beneficiaries That Make Healthy 
     Choices.--With respect to the monthly premium amount for 
     individuals who enroll under this part after the date of the 
     enactment of the Patient Protection and Affordable Care Act, 
     the Secretary shall vary the amount of such premium for such 
     an individual if the individual smokes or makes healthy 
     choices to improve health outcomes (as defined by the 
     Secretary).''.
                                 ______
                                 
  SA 3190. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 245, between lines 14 and 15, and insert the 
     following:
       (B) Special rule for certain individuals eligible for 
     medicaid.--If a taxpayer is an individual described in 
     section 1902(k)(3) of the Social Security Act who elects, in 
     accordance with procedures established by a State under that 
     section, to enroll in a qualified health plan and whose 
     household income does not exceed 100 percent of an amount 
     equal to the poverty line for a family of the size involved, 
     the taxpayer shall--
       (i) for purposes of the credit under this section, be 
     treated as an applicable taxpayer and the applicable 
     percentage with respect to such taxpayer shall be 2.0 
     percent; and
       (ii) for purposes of reduced cost-sharing under section 
     1402 of the Patient Protection and Affordable Care Act, shall 
     be treated as having household income of more than 100 
     percent but less than 150 percent of the poverty line (as so 
     defined) applicable to a family of the size involved.
       On page 404, between lines 13 and 14, insert the following:
       ``(3) The State shall establish procedures to ensure that 
     any individual eligible for medical assistance under the 
     State plan or under a waiver of the plan (under any subclause 
     of subsection (a)(10)(A) or otherwise) who is not elderly or 
     disabled may elect to enroll in a qualified health plan 
     through an Exchange established by the State under section 
     1311 of the Patient Protection and Affordable Care Act 
     instead of enrolling in the State plan under this title or a 
     waiver of the plan. An individual making such an election 
     shall waive being provided with medical assistance under the 
     State plan or waiver while enrolled in the qualified health 
     plan. In the case of an individual who is a child, the 
     child's parent may make such an election on behalf of the 
     child.
                                 ______
                                 
  SA 3191. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1266, between lines 17 and 18, insert the 
     following:

     SEC. 4403. TERMINATION OF PROGRAMS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), the Secretary of Health and 
     Human Services shall terminate a program established under 
     this title if the Secretary of Health and Human Services 
     determines that such program has not reduced health care 
     costs for the Federal government and beneficiaries under such 
     program.
                                 ______
                                 
  SA 3192. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 356, between lines 19 and 20, insert the following:
       ``(f) Limitation.--If in any calendar year the national 
     unemployment rate (as determined by the Bureau of Labor 
     Statistics) exceeds 6 percent, then, notwithstanding any 
     other provision of law, this section shall not apply for the 
     remainder of such calendar year.''.
                                 ______
                                 
  SA 3193. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 1142, strike lines 8 through 16 and insert the 
     following:
       (c) Use of Fund.--Notwithstanding any other provision of 
     this Act (or an amendment made by this Act), the Secretary 
     shall allocate amounts in the Fund to the high risk pool 
     program under section 1101 and the reinsurance program for 
     individual and small group markets in each State under 
     section 1341, in order to lower health care premiums for 
     Americans.
                                 ______
                                 
  SA 3194. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of subtitle E of title IV, insert the following:

     SEC. 4403. PROHIBITION ON THE USE OF FUNDS FOR THE 
                   CONSTRUCTION OF SIDEWALKS, PLAYGROUNDS, OR 
                   JUNGLE GYMS.

       Notwithstanding any other provision of this Act (or an 
     amendment made by this Act), no funds appropriated under this 
     Act (or an amendment made by this Act) shall be allocated to 
     pay for the construction of sidewalks, playgrounds, or jungle 
     gyms.
                                 ______
                                 
  SA 3195. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 101, between lines 19 and 20, insert the following:
       (3) Inclusion of high deductible health plans.--If a health 
     plan is a high deductible health plan (as defined in section 
     223(c)(2) of the Internal Revenue Code of 1986) that meets 
     all requirements under such section to be offered in 
     connection with a health savings account--
       (A) such plan shall be treated as a qualified health plan 
     under this section, and as minimum essential coverage under 
     section 5000A of such Code, for purposes of this Act and the 
     amendments made by this Act;
       (B) no requirement imposed by any provision of, or any 
     amendment made by, this Act shall apply with respect to the 
     plan or issuer thereof.
                                 ______
                                 
  SA 3196. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 54, between lines 19 and 20, insert the following:
       (g) Use of Fund.--Notwithstanding any other provision of 
     this Act (or an amendment made by this Act), the Secretary 
     shall allocate amounts appropriated under subsection (e) to 
     the high risk pool program under section 1101 and the 
     reinsurance program for individual and small group markets in 
     each State under section 1341, in order to lower health care 
     premiums for Americans.
                                 ______
                                 
  SA 3197. Mr. ENZI submitted an amendment intended to be proposed to 
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       Strike the matter proposed to be inserted and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Health Plans 
     Act of 2009''.

[[Page S13050]]

                  TITLE I--ENHANCED MARKETPLACE POOLS

     SEC. 101. RULES GOVERNING ENHANCED MARKETPLACE POOLS.

       (a) In General.--Subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     after part 7 the following new part:

          ``PART 8--RULES GOVERNING ENHANCED MARKETPLACE POOLS

     ``SEC. 801. SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--For purposes of this part, the term 
     `small business health plan' means a fully insured group 
     health plan whose sponsor is (or is deemed under this part to 
     be) described in subsection (b).
       ``(b) Sponsorship.--The sponsor of a group health plan is 
     described in this subsection if such sponsor--
       ``(1) is organized and maintained in good faith, with a 
     constitution and bylaws specifically stating its purpose and 
     providing for periodic meetings on at least an annual basis, 
     as a bona fide trade association, a bona fide industry 
     association (including a rural electric cooperative 
     association or a rural telephone cooperative association), a 
     bona fide professional association, or a bona fide chamber of 
     commerce (or similar bona fide business association, 
     including a corporation or similar organization that operates 
     on a cooperative basis (within the meaning of section 1381 of 
     the Internal Revenue Code of 1986)), for substantial purposes 
     other than that of obtaining medical care;
       ``(2) is established as a permanent entity which receives 
     the active support of its members and requires for membership 
     payment on a periodic basis of dues or payments necessary to 
     maintain eligibility for membership;
       ``(3) does not condition membership, such dues or payments, 
     or coverage under the plan on the basis of health status-
     related factors with respect to the employees of its members 
     (or affiliated members), or the dependents of such employees, 
     and does not condition such dues or payments on the basis of 
     group health plan participation; and
       ``(4) does not condition membership on the basis of a 
     minimum group size.

     Any sponsor consisting of an association of entities which 
     meet the requirements of paragraphs (1), (2), (3), and (4) 
     shall be deemed to be a sponsor described in this subsection.

     ``SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZATIONS.

       ``(a) In General.--The Secretary, not later than 1 year 
     after the date of enactment of this part, shall promulgate 
     regulations that apply the rules and standards of this part, 
     as necessary, to circumstances in which a pooling entity 
     other (hereinafter `Alternative Market Pooling 
     Organizations') is not made up principally of employers and 
     their employees, or not a professional organization or such 
     small business health plan entity identified in section 801.
       ``(b) Adaption of Standards.--In developing and 
     promulgating regulations pursuant to subsection (a), the 
     Secretary, in consultation with the Secretary of Health and 
     Human Services, small business health plans, small and large 
     employers, large and small insurance issuers, consumer 
     representatives, and state insurance commissioners, shall--
       ``(1) adapt the standards of this part, to the maximum 
     degree practicable, to assure balanced and comparable 
     oversight standards for both small business health plans and 
     alternative market pooling organizations;
       ``(2) permit the participation as alternative market 
     pooling organizations unions, churches and other faith-based 
     organizations, or other organizations composed of individuals 
     and groups which may have little or no association with 
     employment, provided however, that such alternative market 
     pooling organizations meet, and continue meeting on an 
     ongoing basis, to satisfy standards, rules, and requirements 
     materially equivalent to those set forth in this part with 
     respect to small business health plans;
       ``(3) conduct periodic verification of such compliance by 
     alternative market pooling organizations, in consultation 
     with the Secretary of Health and Human Services and the 
     National Association of Insurance Commissioners, except that 
     such periodic verification shall not materially impede market 
     entry or participation as pooling entities comparable to that 
     of small business health plans;
       ``(4) assure that consistent, clear, and regularly 
     monitored standards are applied with respect to alternative 
     market pooling organizations to avert material risk-selection 
     within or among the composition of such organizations;
       ``(5) the expedited and deemed certification procedures 
     provided in section 805(d) shall not apply to alternative 
     market pooling organizations until sooner of the promulgation 
     of regulations under this subsection or the expiration of one 
     year following enactment of this Act; and
       ``(6) make such other appropriate adjustments to the 
     requirements of this part as the Secretary may reasonably 
     deem appropriate to fit the circumstances of an individual 
     alternative market pooling organization or category of such 
     organization, including but not limited to the application of 
     the membership payment requirements of section 801(b)(2) to 
     alternative market pooling organizations composed primarily 
     of church- or faith-based membership.

     ``SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

       ``(a) In General.--Not later than 6 months after the date 
     of enactment of this part, the applicable authority shall 
     prescribe by interim final rule a procedure under which the 
     applicable authority shall certify small business health 
     plans which apply for certification as meeting the 
     requirements of this part.
       ``(b) Requirements Applicable to Certified Plans.--A small 
     business health plan with respect to which certification 
     under this part is in effect shall meet the applicable 
     requirements of this part, effective on the date of 
     certification (or, if later, on the date on which the plan is 
     to commence operations).
       ``(c) Requirements for Continued Certification.--The 
     applicable authority may provide by regulation for continued 
     certification of small business health plans under this part. 
     Such regulation shall provide for the revocation of a 
     certification if the applicable authority finds that the 
     small business health plan involved is failing to comply with 
     the requirements of this part.
       ``(d) Expedited and Deemed Certification.--
       ``(1) In general.--If the Secretary fails to act on an 
     application for certification under this section within 90 
     days of receipt of such application, the applying small 
     business health plan shall be deemed certified until such 
     time as the Secretary may deny for cause the application for 
     certification.
       ``(2) Civil penalty.--The Secretary may assess a civil 
     penalty against the board of trustees and plan sponsor 
     (jointly and severally) of a small business health plan that 
     is deemed certified under paragraph (1) of up to $500,000 in 
     the event the Secretary determines that the application for 
     certification of such small business health plan was 
     willfully or with gross negligence incomplete or inaccurate.

     ``SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF 
                   TRUSTEES.

       ``(a) Sponsor.--The requirements of this subsection are met 
     with respect to a small business health plan if the sponsor 
     has met (or is deemed under this part to have met) the 
     requirements of section 801(b) for a continuous period of not 
     less than 3 years ending with the date of the application for 
     certification under this part.
       ``(b) Board of Trustees.--The requirements of this 
     subsection are met with respect to a small business health 
     plan if the following requirements are met:
       ``(1) Fiscal control.--The plan is operated, pursuant to a 
     plan document, by a board of trustees which pursuant to a 
     trust agreement has complete fiscal control over the plan and 
     which is responsible for all operations of the plan.
       ``(2) Rules of operation and financial controls.--The board 
     of trustees has in effect rules of operation and financial 
     controls, based on a 3-year plan of operation, adequate to 
     carry out the terms of the plan and to meet all requirements 
     of this title applicable to the plan.
       ``(3) Rules governing relationship to participating 
     employers and to contractors.--
       ``(A) Board membership.--
       ``(i) In general.--Except as provided in clauses (ii) and 
     (iii), the members of the board of trustees are individuals 
     selected from individuals who are the owners, officers, 
     directors, or employees of the participating employers or who 
     are partners in the participating employers and actively 
     participate in the business.
       ``(ii) Limitation.--

       ``(I) General rule.--Except as provided in subclauses (II) 
     and (III), no such member is an owner, officer, director, or 
     employee of, or partner in, a contract administrator or other 
     service provider to the plan.
       ``(II) Limited exception for providers of services solely 
     on behalf of the sponsor.--Officers or employees of a sponsor 
     which is a service provider (other than a contract 
     administrator) to the plan may be members of the board if 
     they constitute not more than 25 percent of the membership of 
     the board and they do not provide services to the plan other 
     than on behalf of the sponsor.
       ``(III) Treatment of providers of medical care.--In the 
     case of a sponsor which is an association whose membership 
     consists primarily of providers of medical care, subclause 
     (I) shall not apply in the case of any service provider 
     described in subclause (I) who is a provider of medical care 
     under the plan.

       ``(iii) Certain plans excluded.--Clause (i) shall not apply 
     to a small business health plan which is in existence on the 
     date of the enactment of the Small Business Health Plans Act 
     of 2009.
       ``(B) Sole authority.--The board has sole authority under 
     the plan to approve applications for participation in the 
     plan and to contract with insurers.
       ``(c) Treatment of Franchises.--In the case of a group 
     health plan which is established and maintained by a 
     franchiser for a franchisor or for its franchisees--
       ``(1) the requirements of subsection (a) and section 801(a) 
     shall be deemed met if such requirements would otherwise be 
     met if the franchisor were deemed to be the sponsor referred 
     to in section 801(b) and each franchisee were deemed to be a 
     member (of the sponsor) referred to in section 801(b); and
       ``(2) the requirements of section 804(a)(1) shall be deemed 
     met.

     For purposes of this subsection the terms `franchisor' and 
     `franchisee' shall have the

[[Page S13051]]

     meanings given such terms for purposes of sections 436.2(a) 
     through 436.2(c) of title 16, Code of Federal Regulations 
     (including any such amendments to such regulation after the 
     date of enactment of this part).

     ``SEC. 805. PARTICIPATION AND COVERAGE REQUIREMENTS.

       ``(a) Covered Employers and Individuals.--The requirements 
     of this subsection are met with respect to a small business 
     health plan if, under the terms of the plan--
       ``(1) each participating employer must be--
       ``(A) a member of the sponsor;
       ``(B) the sponsor; or
       ``(C) an affiliated member of the sponsor, except that, in 
     the case of a sponsor which is a professional association or 
     other individual-based association, if at least one of the 
     officers, directors, or employees of an employer, or at least 
     one of the individuals who are partners in an employer and 
     who actively participates in the business, is a member or 
     such an affiliated member of the sponsor, participating 
     employers may also include such employer; and
       ``(2) all individuals commencing coverage under the plan 
     after certification under this part must be--
       ``(A) active or retired owners (including self-employed 
     individuals), officers, directors, or employees of, or 
     partners in, participating employers; or
       ``(B) the dependents of individuals described in 
     subparagraph (A).
       ``(b) Individual Market Unaffected.--The requirements of 
     this subsection are met with respect to a small business 
     health plan if, under the terms of the plan, no participating 
     employer may provide health insurance coverage in the 
     individual market for any employee not covered under the plan 
     which is similar to the coverage contemporaneously provided 
     to employees of the employer under the plan, if such 
     exclusion of the employee from coverage under the plan is 
     based on a health status-related factor with respect to the 
     employee and such employee would, but for such exclusion on 
     such basis, be eligible for coverage under the plan.
       ``(c) Prohibition of Discrimination Against Employers and 
     Employees Eligible To Participate.--The requirements of this 
     subsection are met with respect to a small business health 
     plan if--
       ``(1) under the terms of the plan, all employers meeting 
     the preceding requirements of this section are eligible to 
     qualify as participating employers for all geographically 
     available coverage options, unless, in the case of any such 
     employer, participation or contribution requirements of the 
     type referred to in section 2711 of the Public Health Service 
     Act are not met;
       ``(2) information regarding all coverage options available 
     under the plan is made readily available to any employer 
     eligible to participate; and
       ``(3) the applicable requirements of sections 701, 702, and 
     703 are met with respect to the plan.

     ``SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, 
                   CONTRIBUTION RATES, AND BENEFIT OPTIONS.

       ``(a) In General.--The requirements of this section are met 
     with respect to a small business health plan if the following 
     requirements are met:
       ``(1) Contents of governing instruments.--
       ``(A) In general.--The instruments governing the plan 
     include a written instrument, meeting the requirements of an 
     instrument required under section 402(a)(1), which--
       ``(i) provides that the board of trustees serves as the 
     named fiduciary required for plans under section 402(a)(1) 
     and serves in the capacity of a plan administrator (referred 
     to in section 3(16)(A)); and
       ``(ii) provides that the sponsor of the plan is to serve as 
     plan sponsor (referred to in section 3(16)(B)).
       ``(B) Description of material provisions.--The terms of the 
     health insurance coverage (including the terms of any 
     individual certificates that may be offered to individuals in 
     connection with such coverage) describe the material benefit 
     and rating, and other provisions set forth in this section 
     and such material provisions are included in the summary plan 
     description.
       ``(2) Contribution rates must be nondiscriminatory.--
       ``(A) In general.--The contribution rates for any 
     participating small employer shall not vary on the basis of 
     any health status-related factor in relation to employees of 
     such employer or their beneficiaries and shall not vary on 
     the basis of the type of business or industry in which such 
     employer is engaged, subject to subparagraph (B) and the 
     terms of this title.
       ``(B) Effect of title.--Nothing in this title or any other 
     provision of law shall be construed to preclude a health 
     insurance issuer offering health insurance coverage in 
     connection with a small business health plan that meets the 
     requirements of this part, and at the request of such small 
     business health plan, from--
       ``(i) setting contribution rates for the small business 
     health plan based on the claims experience of the small 
     business health plan so long as any variation in such rates 
     for participating small employers complies with the 
     requirements of clause (ii), except that small business 
     health plans shall not be subject, in non-adopting states, to 
     subparagraphs (A)(ii) and (C) of section 2912(a)(2) of the 
     Public Health Service Act, and in adopting states, to any 
     State law that would have the effect of imposing requirements 
     as outlined in such subparagraphs (A)(ii) and (C); or
       ``(ii) varying contribution rates for participating small 
     employers in a small business health plan in a State to the 
     extent that such rates could vary using the same methodology 
     employed in such State for regulating small group premium 
     rates, subject to the terms of part I of subtitle A of title 
     XXIX of the Public Health Service Act (relating to rating 
     requirements), as added by title II of the Small Business 
     Health Plans Act of 2009.
       ``(3) Exceptions regarding self-employed and large 
     employers.--
       ``(A) Self employed.--
       ``(i) In general.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) shall enroll such self-employed 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for self-employed individuals 
     in the State in which such self-employed participating 
     employers are located.
       ``(ii) Guarantee issue.--Small business health plans with 
     participating employers who are self-employed individuals 
     (and their dependents) may decline to guarantee issue to such 
     participating employers in States in which guarantee issue is 
     not otherwise required for the self-employed in that State.
       ``(B) Large employers.--Small business health plans with 
     participating employers that are larger than small employers 
     (as defined in section 808(a)(10)) shall enroll such large 
     participating employers in accordance with rating rules that 
     do not violate the rating rules for large employers in the 
     State in which such large participating employers are 
     located.
       ``(4) Regulatory requirements.--Such other requirements as 
     the applicable authority determines are necessary to carry 
     out the purposes of this part, which shall be prescribed by 
     the applicable authority by regulation.
       ``(b) Ability of Small Business Health Plans To Design 
     Benefit Options.--Nothing in this part or any provision of 
     State law (as defined in section 514(c)(1)) shall be 
     construed to preclude a small business health plan or a 
     health insurance issuer offering health insurance coverage in 
     connection with a small business health plan from exercising 
     its sole discretion in selecting the specific benefits and 
     services consisting of medical care to be included as 
     benefits under such plan or coverage, except that such 
     benefits and services must meet the terms and specifications 
     of part II of subtitle A of title XXIX of the Public Health 
     Service Act (relating to lower cost plans), as added by title 
     II of the Small Business Health Plans Act of 2009.
       ``(c) Domicile and Non-Domicile States.--
       ``(1) Domicile state.--Coverage shall be issued to a small 
     business health plan in the State in which the sponsor's 
     principal place of business is located.
       ``(2) Non-domicile states.--With respect to a State (other 
     than the domicile State) in which participating employers of 
     a small business health plan are located but in which the 
     insurer of the small business health plan in the domicile 
     State is not yet licensed, the following shall apply:
       ``(A) Temporary preemption.--If, upon the expiration of the 
     90-day period following the submission of a licensure 
     application by such insurer (that includes a certified copy 
     of an approved licensure application as submitted by such 
     insurer in the domicile State) to such State, such State has 
     not approved or denied such application, such State's health 
     insurance licensure laws shall be temporarily preempted and 
     the insurer shall be permitted to operate in such State, 
     subject to the following terms:
       ``(i) Application of non-domicile state law.--Except with 
     respect to licensure and with respect to the terms of 
     subtitle A of title XXIX of the Public Health Service Act 
     (relating to rating and benefits as added by the Small 
     Business Health Plans Act of 2009), the laws and authority of 
     the non-domicile State shall remain in full force and effect.
       ``(ii) Revocation of preemption.--The preemption of a non-
     domicile State's health insurance licensure laws pursuant to 
     this subparagraph, shall be terminated upon the occurrence of 
     either of the following:

       ``(I) Approval or denial of application.--The approval of 
     denial of an insurer's licensure application, following the 
     laws and regulations of the non-domicile State with respect 
     to licensure.
       ``(II) Determination of material violation.--A 
     determination by a non-domicile State that an insurer 
     operating in a non-domicile State pursuant to the preemption 
     provided for in this subparagraph is in material violation of 
     the insurance laws (other than licensure and with respect to 
     the terms of subtitle A of title XXIX of the Public Health 
     Service Act (relating to rating and benefits added by the 
     Small Business Health Plans Act of 2009)) of such State.

       ``(B) No prohibition on promotion.--Nothing in this 
     paragraph shall be construed to prohibit a small business 
     health plan or an insurer from promoting coverage prior to 
     the expiration of the 90-day period provided for in 
     subparagraph (A), except that no enrollment or collection of 
     contributions shall occur before the expiration of such 90-
     day period.
       ``(C) Licensure.--Except with respect to the application of 
     the temporary preemption provision of this paragraph, nothing 
     in this part shall be construed to limit the requirement that 
     insurers issuing coverage to small business health plans 
     shall be licensed in

[[Page S13052]]

     each State in which the small business health plans operate.
       ``(D) Servicing by licensed insurers.--Notwithstanding 
     subparagraph (C), the requirements of this subsection may 
     also be satisfied if the participating employers of a small 
     business health plan are serviced by a licensed insurer in 
     that State, even where such insurer is not the insurer of 
     such small business health plan in the State in which such 
     small business health plan is domiciled.

     ``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED 
                   REQUIREMENTS.

       ``(a) Filing Fee.--Under the procedure prescribed pursuant 
     to section 802(a), a small business health plan shall pay to 
     the applicable authority at the time of filing an application 
     for certification under this part a filing fee in the amount 
     of $5,000, which shall be available in the case of the 
     Secretary, to the extent provided in appropriation Acts, for 
     the sole purpose of administering the certification 
     procedures applicable with respect to small business health 
     plans.
       ``(b) Information To Be Included in Application for 
     Certification.--An application for certification under this 
     part meets the requirements of this section only if it 
     includes, in a manner and form which shall be prescribed by 
     the applicable authority by regulation, at least the 
     following information:
       ``(1) Identifying information.--The names and addresses 
     of--
       ``(A) the sponsor; and
       ``(B) the members of the board of trustees of the plan.
       ``(2) States in which plan intends to do business.--The 
     States in which participants and beneficiaries under the plan 
     are to be located and the number of them expected to be 
     located in each such State.
       ``(3) Bonding requirements.--Evidence provided by the board 
     of trustees that the bonding requirements of section 412 will 
     be met as of the date of the application or (if later) 
     commencement of operations.
       ``(4) Plan documents.--A copy of the documents governing 
     the plan (including any bylaws and trust agreements), the 
     summary plan description, and other material describing the 
     benefits that will be provided to participants and 
     beneficiaries under the plan.
       ``(5) Agreements with service providers.--A copy of any 
     agreements between the plan, health insurance issuer, and 
     contract administrators and other service providers.
       ``(c) Filing Notice of Certification With States.--A 
     certification granted under this part to a small business 
     health plan shall not be effective unless written notice of 
     such certification is filed with the applicable State 
     authority of each State in which the small business health 
     plans operate.
       ``(d) Notice of Material Changes.--In the case of any small 
     business health plan certified under this part, descriptions 
     of material changes in any information which was required to 
     be submitted with the application for the certification under 
     this part shall be filed in such form and manner as shall be 
     prescribed by the applicable authority by regulation. The 
     applicable authority may require by regulation prior notice 
     of material changes with respect to specified matters which 
     might serve as the basis for suspension or revocation of the 
     certification.

     ``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

       ``A small business health plan which is or has been 
     certified under this part may terminate (upon or at any time 
     after cessation of accruals in benefit liabilities) only if 
     the board of trustees, not less than 60 days before the 
     proposed termination date--
       ``(1) provides to the participants and beneficiaries a 
     written notice of intent to terminate stating that such 
     termination is intended and the proposed termination date;
       ``(2) develops a plan for winding up the affairs of the 
     plan in connection with such termination in a manner which 
     will result in timely payment of all benefits for which the 
     plan is obligated; and
       ``(3) submits such plan in writing to the applicable 
     authority.

     Actions required under this section shall be taken in such 
     form and manner as may be prescribed by the applicable 
     authority by regulation.

     ``SEC. 809. IMPLEMENTATION AND APPLICATION AUTHORITY BY 
                   SECRETARY.

       ``The Secretary shall, through promulgation and 
     implementation of such regulations as the Secretary may 
     reasonably determine necessary or appropriate, and in 
     consultation with a balanced spectrum of effected entities 
     and persons, modify the implementation and application of 
     this part to accommodate with minimum disruption such changes 
     to State or Federal law provided in this part and the (and 
     the amendments made by such Act) or in regulations issued 
     thereto.

     ``SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION.

       ``(a) Definitions.--For purposes of this part--
       ``(1) Affiliated member.--The term `affiliated member' 
     means, in connection with a sponsor--
       ``(A) a person who is otherwise eligible to be a member of 
     the sponsor but who elects an affiliated status with the 
     sponsor, or
       ``(B) in the case of a sponsor with members which consist 
     of associations, a person who is a member or employee of any 
     such association and elects an affiliated status with the 
     sponsor.
       ``(2) Applicable authority.--The term `applicable 
     authority' means the Secretary of Labor, except that, in 
     connection with any exercise of the Secretary's authority 
     with respect to which the Secretary is required under section 
     506(d) to consult with a State, such term means the 
     Secretary, in consultation with such State.
       ``(3) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     requirements of title XXVII of the Public Health Service Act 
     for the State involved with respect to such issuer.
       ``(4) Group health plan.--The term `group health plan' has 
     the meaning provided in section 733(a)(1) (after applying 
     subsection (b) of this section).
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided in section 
     733(b)(1), except that such term shall not include excepted 
     benefits (as defined in section 733(c)).
       ``(6) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided in section 733(b)(2).
       ``(7) Individual market.--
       ``(A) In general.--The term `individual market' means the 
     market for health insurance coverage offered to individuals 
     other than in connection with a group health plan.
       ``(B) Treatment of very small groups.--
       ``(i) In general.--Subject to clause (ii), such term 
     includes coverage offered in connection with a group health 
     plan that has fewer than 2 participants as current employees 
     or participants described in section 732(d)(3) on the first 
     day of the plan year.
       ``(ii) State exception.--Clause (i) shall not apply in the 
     case of health insurance coverage offered in a State if such 
     State regulates the coverage described in such clause in the 
     same manner and to the same extent as coverage in the small 
     group market (as defined in section 2791(e)(5) of the Public 
     Health Service Act) is regulated by such State.
       ``(8) Medical care.--The term `medical care' has the 
     meaning provided in section 733(a)(2).
       ``(9) Participating employer.--The term `participating 
     employer' means, in connection with a small business health 
     plan, any employer, if any individual who is an employee of 
     such employer, a partner in such employer, or a self-employed 
     individual who is such employer (or any dependent, as defined 
     under the terms of the plan, of such individual) is or was 
     covered under such plan in connection with the status of such 
     individual as such an employee, partner, or self-employed 
     individual in relation to the plan.
       ``(10) Small employer.--The term `small employer' means, in 
     connection with a group health plan with respect to a plan 
     year, a small employer as defined in section 2791(e)(4).
       ``(11) Trade association and professional association.--The 
     terms `trade association' and `professional association' mean 
     an entity that meets the requirements of section 1.501(c)(6)-
     1 of title 26, Code of Federal Regulations (as in effect on 
     the date of enactment of this Act).
       ``(b) Rule of Construction.--For purposes of determining 
     whether a plan, fund, or program is an employee welfare 
     benefit plan which is a small business health plan, and for 
     purposes of applying this title in connection with such plan, 
     fund, or program so determined to be such an employee welfare 
     benefit plan--
       ``(1) in the case of a partnership, the term `employer' (as 
     defined in section 3(5)) includes the partnership in relation 
     to the partners, and the term `employee' (as defined in 
     section 3(6)) includes any partner in relation to the 
     partnership; and
       ``(2) in the case of a self-employed individual, the term 
     `employer' (as defined in section 3(5)) and the term 
     `employee' (as defined in section 3(6)) shall include such 
     individual.
       ``(c) Renewal.--Notwithstanding any provision of law to the 
     contrary, a participating employer in a small business health 
     plan shall not be deemed to be a plan sponsor in applying 
     requirements relating to coverage renewal.
       ``(d) Health Savings Accounts.--Nothing in this part shall 
     be construed to create any mandates for coverage of benefits 
     for HSA-qualified health plans that would require 
     reimbursements in violation of section 223(c)(2) of the 
     Internal Revenue Code of 1986.''.
       (b) Conforming Amendments to Preemption Rules.--
       (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
     amended by adding at the end the following new subparagraph:
       ``(E) The preceding subparagraphs of this paragraph do not 
     apply with respect to any State law in the case of a small 
     business health plan which is certified under part 8.''.
       (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
       (A) in subsection (b)(4), by striking ``Subsection (a)'' 
     and inserting ``Subsections (a) and (d)'';
       (B) in subsection (b)(5), by striking ``subsection (a)'' in 
     subparagraph (A) and inserting ``subsection (a) of this 
     section and subsections (a)(2)(B) and (b) of section 805'', 
     and by striking ``subsection (a)'' in subparagraph (B) and 
     inserting ``subsection (a) of this section or subsection 
     (a)(2)(B) or (b) of section 805'';
       (C) by redesignating subsection (d) as subsection (e); and
       (D) by inserting after subsection (c) the following new 
     subsection:

[[Page S13053]]

       ``(d)(1) Except as provided in subsection (b)(4), the 
     provisions of this title shall supersede any and all State 
     laws insofar as they may now or hereafter preclude a health 
     insurance issuer from offering health insurance coverage in 
     connection with a small business health plan which is 
     certified under part 8.
       ``(2) In any case in which health insurance coverage of any 
     policy type is offered under a small business health plan 
     certified under part 8 to a participating employer operating 
     in such State, the provisions of this title shall supersede 
     any and all laws of such State insofar as they may establish 
     rating and benefit requirements that would otherwise apply to 
     such coverage, provided the requirements of subtitle A of 
     title XXIX of the Public Health Service Act (as added by 
     title II of the Health Insurance Marketplace Modernization 
     and Affordability Act of 2007) (concerning health plan rating 
     and benefits) are met.''.
       (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
     102(16)(B)) is amended by adding at the end the following new 
     sentence: ``Such term also includes a person serving as the 
     sponsor of a small business health plan under part 8.''.
       (d) Savings Clause.--Section 731(c) of such Act is amended 
     by inserting ``or part 8'' after ``this part''.
       (e) Clerical Amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 is 
     amended by inserting after the item relating to section 734 
     the following new items:

         ``Part 8--Rules Governing Small Business Health Plans

``801. Small business health plans.
``802. Alternative market pooling organizations.
``803. Certification of small business health plans.
``804. Requirements relating to sponsors and boards of trustees.
``805. Participation and coverage requirements.
``806. Other requirements relating to plan documents, contribution 
              rates, and benefit options.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Implementation and application authority by Secretary.
``810. Definitions and rules of construction.''.

     SEC. 102. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

       Section 506 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1136) is amended by adding at the end the 
     following new subsection:
       ``(d) Consultation With States With Respect to Small 
     Business Health Plans.--
       ``(1) Agreements with states.--The Secretary shall consult 
     with the State recognized under paragraph (2) with respect to 
     a small business health plan regarding the exercise of--
       ``(A) the Secretary's authority under sections 502 and 504 
     to enforce the requirements for certification under part 8; 
     and
       ``(B) the Secretary's authority to certify small business 
     health plans under part 8 in accordance with regulations of 
     the Secretary applicable to certification under part 8.
       ``(2) Recognition of domicile state.--In carrying out 
     paragraph (1), the Secretary shall ensure that only one State 
     will be recognized, with respect to any particular small 
     business health plan, as the State with which consultation is 
     required. In carrying out this paragraph such State shall be 
     the domicile State, as defined in section 805(c).''.

     SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

       (a) Effective Date.--The amendments made by this title 
     shall take effect 12 months after the date of the enactment 
     of this Act. The Secretary of Labor shall first issue all 
     regulations necessary to carry out the amendments made by 
     this title within 6 months after the date of the enactment of 
     this Act.
       (b) Treatment of Certain Existing Health Benefits 
     Programs.--
       (1) In general.--In any case in which, as of the date of 
     the enactment of this Act, an arrangement is maintained in a 
     State for the purpose of providing benefits consisting of 
     medical care for the employees and beneficiaries of its 
     participating employers, at least 200 participating employers 
     make contributions to such arrangement, such arrangement has 
     been in existence for at least 10 years, and such arrangement 
     is licensed under the laws of one or more States to provide 
     such benefits to its participating employers, upon the filing 
     with the applicable authority (as defined in section 
     808(a)(2) of the Employee Retirement Income Security Act of 
     1974 (as amended by this subtitle)) by the arrangement of an 
     application for certification of the arrangement under part 8 
     of subtitle B of title I of such Act--
       (A) such arrangement shall be deemed to be a group health 
     plan for purposes of title I of such Act;
       (B) the requirements of sections 801(a) and 803(a) of the 
     Employee Retirement Income Security Act of 1974 shall be 
     deemed met with respect to such arrangement;
       (C) the requirements of section 803(b) of such Act shall be 
     deemed met, if the arrangement is operated by a board of 
     trustees which has control over the arrangement;
       (D) the requirements of section 804(a) of such Act shall be 
     deemed met with respect to such arrangement; and
       (E) the arrangement may be certified by any applicable 
     authority with respect to its operations in any State only if 
     it operates in such State on the date of certification.

     The provisions of this subsection shall cease to apply with 
     respect to any such arrangement at such time after the date 
     of the enactment of this Act as the applicable requirements 
     of this subsection are not met with respect to such 
     arrangement or at such time that the arrangement provides 
     coverage to participants and beneficiaries in any State other 
     than the States in which coverage is provided on such date of 
     enactment.
       (2) Definitions.--For purposes of this subsection, the 
     terms ``group health plan'', ``medical care'', and 
     ``participating employer'' shall have the meanings provided 
     in section 808 of the Employee Retirement Income Security Act 
     of 1974, except that the reference in paragraph (7) of such 
     section to an ``small business health plan'' shall be deemed 
     a reference to an arrangement referred to in this subsection.

                        TITLE II--MARKET RELIEF

     SEC. 301. MARKET RELIEF.

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

     ``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

     ``SEC. 2901. GENERAL INSURANCE DEFINITIONS.

       ``In this title, the terms `health insurance coverage', 
     `health insurance issuer', `group health plan', and 
     `individual health insurance' shall have the meanings given 
     such terms in section 2791.

     ``SEC. 2902. IMPLEMENTATION AND APPLICATION AUTHORITY BY 
                   SECRETARY.

       ``The Secretary shall, through promulgation and 
     implementation of such regulations as the Secretary may 
     reasonably determine necessary or appropriate, and in 
     consultation with a balanced spectrum of effected entities 
     and persons, modify the implementation and application of 
     this title to accommodate with minimum disruption such 
     changes to State or Federal law provided in this title and 
     the (and the amendments made by such Act) or in regulations 
     issued thereto.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

     ``SEC. 2911. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that, with respect to the small group market, has 
     enacted small group rating rules that meet the minimum 
     standards set forth in section 2912(a)(1) or, as applicable, 
     transitional small group rating rules set forth in section 
     2912(b).
       ``(2) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     insurance laws of such State.
       ``(3) Base premium rate.--The term `base premium rate' 
     means, for each class of business with respect to a rating 
     period, the lowest premium rate charged or that could have 
     been charged under a rating system for that class of business 
     by the small employer carrier to small employers with similar 
     case characteristics for health benefit plans with the same 
     or similar coverage.
       ``(4) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a State and 
     that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the Model Small Group Rating Rules or, as 
     applicable, transitional small group rating rules in a State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer small group health insurance 
     coverage in that State consistent with the Model Small Group 
     Rating Rules, and provides with such notice a copy of any 
     insurance policy that it intends to offer in the State, its 
     most recent annual and quarterly financial reports, and any 
     other information required to be filed with the insurance 
     department of the State (or other State agency); and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the Model Small 
     Group Rating Rules and an affirmation that such Rules are 
     included in the terms of such contract.
       ``(5) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the small 
     group health insurance market, except that such term shall 
     not include excepted benefits (as defined in section 
     2791(c)).
       ``(6) Index rate.--The term `index rate' means for each 
     class of business with respect to the rating period for small 
     employers with similar case characteristics, the arithmetic 
     average of the applicable base premium rate and the 
     corresponding highest premium rate.
       ``(7)  Model small group rating rules.--The term `Model 
     Small Group Rating Rules' means the rules set forth in 
     section 2912(a)(2).

[[Page S13054]]

       ``(8) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(9) Small group insurance market.--The term `small group 
     insurance market' shall have the meaning given the term 
     `small group market' in section 2791(e)(5).
       ``(10) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.
       ``(11) Variation limits.--
       ``(A) Composite variation limit.--
       ``(i) In general.--The term `composite variation limit' 
     means the total variation in premium rates charged by a 
     health insurance issuer in the small group market as 
     permitted under applicable State law based on the following 
     factors or case characteristics:

       ``(I) Age.
       ``(II) Duration of coverage.
       ``(III) Claims experience.
       ``(IV) Health status.

       ``(ii) Use of factors.--With respect to the use of the 
     factors described in clause (i) in setting premium rates, a 
     health insurance issuer shall use one or both of the factors 
     described in subclauses (I) or (IV) of such clause and may 
     use the factors described in subclauses (II) or (III) of such 
     clause.
       ``(B) Total variation limit.--The term `total variation 
     limit' means the total variation in premium rates charged by 
     a health insurance issuer in the small group market as 
     permitted under applicable State law based on all factors and 
     case characteristics (as described in section 2912(a)(1)).

     ``SEC. 2912. RATING RULES.

       ``(a) Establishment of Minimum Standards for Premium 
     Variations and Model Small Group Rating Rules.--Not later 
     than 6 months after the date of enactment of this title, the 
     Secretary shall promulgate regulations establishing the 
     following Minimum Standards and Model Small Group Rating 
     Rules:
       ``(1) Minimum standards for premium variations.--
       ``(A) Composite variation limit.--The composite variation 
     limit shall not be less than 3:1.
       ``(B) Total variation limit.--The total variation limit 
     shall not be less than 5:1.
       ``(C) Prohibition on use of certain case characteristics.--
     For purposes of this paragraph, in calculating the total 
     variation limit, the State shall not use case characteristics 
     other than those used in calculating the composite variation 
     limit and industry, geographic area, group size, 
     participation rate, class of business, and participation in 
     wellness programs.
       ``(2) Model small group rating rules.--The following apply 
     to an eligible insurer in a non-adopting State:
       ``(A) Premium rates.--Premium rates for small group health 
     benefit plans to which this title applies shall comply with 
     the following provisions relating to premiums, except as 
     provided for under subsection (b):
       ``(i) Variation in premium rates.--The plan may not vary 
     premium rates by more than the minimum standards provided for 
     under paragraph (1).
       ``(ii) Index rate.--The index rate for a rating period for 
     any class of business shall not exceed the index rate for any 
     other class of business by more than 20 percent, excluding 
     those classes of business related to association groups under 
     this title.
       ``(iii) Class of businesses.--With respect to a class of 
     business, the premium rates charged during a rating period to 
     small employers with similar case characteristics for the 
     same or similar coverage or the rates that could be charged 
     to such employers under the rating system for that class of 
     business, shall not vary from the index rate by more than 25 
     percent of the index rate under clause (ii).
       ``(iv) Increases for new rating periods.--The percentage 
     increase in the premium rate charged to a small employer for 
     a new rating period may not exceed the sum of the following:

       ``(I) The percentage change in the new business premium 
     rate measured from the first day of the prior rating period 
     to the first day of the new rating period. In the case of a 
     health benefit plan into which the small employer carrier is 
     no longer enrolling new small employers, the small employer 
     carrier shall use the percentage change in the base premium 
     rate, except that such change shall not exceed, on a 
     percentage basis, the change in the new business premium rate 
     for the most similar health benefit plan into which the small 
     employer carrier is actively enrolling new small employers.
       ``(II) Any adjustment, not to exceed 15 percent annually 
     and adjusted pro rata for rating periods of less then 1 year, 
     due to the claim experience, health status or duration of 
     coverage of the employees or dependents of the small employer 
     as determined from the small employer carrier's rate manual 
     for the class of business involved.
       ``(III) Any adjustment due to change in coverage or change 
     in the case characteristics of the small employer as 
     determined from the small employer carrier's rate manual for 
     the class of business.

       ``(v) Uniform application of adjustments.--Adjustments in 
     premium rates for claim experience, health status, or 
     duration of coverage shall not be charged to individual 
     employees or dependents. Any such adjustment shall be applied 
     uniformly to the rates charged for all employees and 
     dependents of the small employer.
       ``(vi) Prohibition on use of certain case characteristic.--
     A small employer carrier shall not utilize case 
     characteristics, other than those permitted under paragraph 
     (1)(C), without the prior approval of the applicable State 
     authority.
       ``(vii) Consistent application of factors.--Small employer 
     carriers shall apply rating factors, including case 
     characteristics, consistently with respect to all small 
     employers in a class of business. Rating factors shall 
     produce premiums for identical groups which differ only by 
     the amounts attributable to plan design and do not reflect 
     differences due to the nature of the groups assumed to select 
     particular health benefit plans.
       ``(viii) Treatment of plans as having same rating period.--
     A small employer carrier shall treat all health benefit plans 
     issued or renewed in the same calendar month as having the 
     same rating period.
       ``(ix) Require compliance.--Premium rates for small 
     business health benefit plans shall comply with the 
     requirements of this subsection notwithstanding any 
     assessments paid or payable by a small employer carrier as 
     required by a State's small employer carrier reinsurance 
     program.
       ``(B) Establishment of separate class of business.--Subject 
     to subparagraph (C), a small employer carrier may establish a 
     separate class of business only to reflect substantial 
     differences in expected claims experience or administrative 
     costs related to the following:
       ``(i) The small employer carrier uses more than one type of 
     system for the marketing and sale of health benefit plans to 
     small employers.
       ``(ii) The small employer carrier has acquired a class of 
     business from another small employer carrier.
       ``(iii) The small employer carrier provides coverage to one 
     or more association groups that meet the requirements of this 
     title.
       ``(C) Limitation.--A small employer carrier may establish 
     up to 9 separate classes of business under subparagraph (B), 
     excluding those classes of business related to association 
     groups under this title.
       ``(D) Limitation on transfers.--A small employer carrier 
     shall not transfer a small employer involuntarily into or out 
     of a class of business. A small employer carrier shall not 
     offer to transfer a small employer into or out of a class of 
     business unless such offer is made to transfer all small 
     employers in the class of business without regard to case 
     characteristics, claim experience, health status or duration 
     of coverage since issue.
       ``(b) Transitional Model Small Group Rating Rules.--
       ``(1) In general.--Not later than 6 months after the date 
     of enactment of this title and to the extent necessary to 
     provide for a graduated transition to the minimum standards 
     for premium variation as provided for in subsection (a)(1), 
     the Secretary, in consultation with the National Association 
     of Insurance Commissioners (NAIC), shall promulgate State-
     specific transitional small group rating rules in accordance 
     with this subsection, which shall be applicable with respect 
     to non-adopting States and eligible insurers operating in 
     such States for a period of not to exceed 3 years from the 
     date of the promulgation of the minimum standards for premium 
     variation pursuant to subsection (a).
       ``(2) Compliance with transitional model small group rating 
     rules.--During the transition period described in paragraph 
     (1), a State that, on the date of enactment of this title, 
     has in effect a small group rating rules methodology that 
     allows for a variation that is less than the variation 
     provided for under subsection (a)(1) (concerning minimum 
     standards for premium variation), shall be deemed to be an 
     adopting State if the State complies with the transitional 
     small group rating rules as promulgated by the Secretary 
     pursuant to paragraph (1).
       ``(3) Transitioning of old business.--
       ``(A) In general.--In developing the transitional small 
     group rating rules under paragraph (1), the Secretary shall, 
     after consultation with the National Association of Insurance 
     Commissioners and representatives of insurers operating in 
     the small group health insurance market in non-adopting 
     States, promulgate special transition standards with respect 
     to independent rating classes for old and new business, to 
     the extent reasonably necessary to protect health insurance 
     consumers and to ensure a stable and fair transition for old 
     and new market entrants.
       ``(B) Period for operation of independent rating classes.--
     In developing the special transition standards pursuant to 
     subparagraph (A), the Secretary shall permit a carrier in a 
     non-adopting State, at its option, to maintain independent 
     rating classes for old and new business for a period of up to 
     5 years, with the commencement of such 5-year period to begin 
     at such time, but not later than the date that is 3 years 
     after the date of enactment of this title, as the carrier 
     offers a book of business meeting the minimum standards for 
     premium variation provided for in subsection (a)(1) or the 
     transitional small group rating rules under paragraph (1).
       ``(4) Other transitional authority.--In developing the 
     transitional small group rating rules under paragraph (1), 
     the Secretary shall provide for the application of the 
     transitional small group rating rules in transition States as 
     the Secretary may determine necessary for a an effective 
     transition.
       ``(c) Market Re-Entry.--

[[Page S13055]]

       ``(1) In general.--Notwithstanding any other provision of 
     law, a health insurance issuer that has voluntarily withdrawn 
     from providing coverage in the small group market prior to 
     the date of enactment of the Small Business Health Plans Act 
     of 2009 shall not be excluded from re-entering such market on 
     a date that is more than 180 days after such date of 
     enactment.
       ``(2) Termination.--The provision of this subsection shall 
     terminate on the date that is 24 months after the date of 
     enactment of the Small Business Health Plans Act of 2009.

     ``SEC. 2913. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws of a non-adopting State insofar as such State laws 
     (whether enacted prior to or after the date of enactment of 
     this subtitle) relate to rating in the small group insurance 
     market as applied to an eligible insurer, or small group 
     health insurance coverage issued by an eligible insurer, 
     including with respect to coverage issued to a small employer 
     through a small business health plan, in a State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State insofar as such 
     State laws (whether enacted prior to or after the date of 
     enactment of this subtitle)--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing small group health insurance 
     coverage consistent with the Model Small Group Rating Rules 
     or transitional model small group rating rules.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting states.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers that offer small group health insurance 
     coverage in a nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supercede any State law in 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Model Small 
     Group Rating Rules or transitional model small group rating 
     rules.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of action under Federal or 
     State law or enlarge or affect any remedy available under the 
     Employee Retirement Income Security Act of 1974.
       ``(5) Preemption limited to rating.--Subsection (a) shall 
     not preempt any State law that does not have a reference to 
     or a connection with State rating rules that would otherwise 
     apply to eligible insurers.
       ``(c) Effective Date.--This section shall apply, at the 
     election of the eligible insurer, beginning in the first plan 
     year or the first calendar year following the issuance of the 
     final rules by the Secretary under the Model Small Group 
     Rating Rules or, as applicable, the Transitional Model Small 
     Group Rating Rules, but in no event earlier than the date 
     that is 12 months after the date of enactment of this title.

     ``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2913.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2915. ONGOING REVIEW.

       ``Not later than 5 years after the date on which the Model 
     Small Group Rating Rules are issued under this part, and 
     every 5 years thereafter, the Secretary, in consultation with 
     the National Association of Insurance Commissioners, shall 
     prepare and submit to the appropriate committees of Congress 
     a report that assesses the effect of the Model Small Group 
     Rating Rules on access, cost, and market functioning in the 
     small group market. Such report may, if the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, determines such is appropriate for improving 
     access, costs, and market functioning, contain legislative 
     proposals for recommended modification to such Model Small 
     Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

     ``SEC. 2921. DEFINITIONS.

       ``In this part:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted a law providing that small group, 
     individual, and large group health insurers in such State may 
     offer and sell products in accordance with the List of 
     Required Benefits and the Terms of Application as provided 
     for in section 2922(b).
       ``(2) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the List of Required Benefits and Terms of 
     Application in a nonadopting State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other applicable State agency), not later than 30 
     days prior to the offering of coverage described in this 
     subparagraph, that the issuer intends to offer health 
     insurance coverage in that State consistent with the List of 
     Required Benefits and Terms of Application, and provides with 
     such notice a copy of any insurance policy that it intends to 
     offer in the State, its most recent annual and quarterly 
     financial reports, and any other information required to be 
     filed with the insurance department of the State (or other 
     State agency) by the Secretary in regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such group health coverage) 
     and filed with the State pursuant to subparagraph (B), a 
     description in the insurer's contract of the List of Required 
     Benefits and a description of the Terms of Application, 
     including a description of the benefits to be provided, and 
     that adherence to such standards is included as a term of 
     such contract.
       ``(3) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the small 
     group, individual, or large group health insurance markets, 
     including with respect to small business health plans, except 
     that such term shall not include excepted benefits (as 
     defined in section 2791(c)).
       ``(4) List of required benefits.--The term `List of 
     Required Benefits' means the List issued under section 
     2922(a).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that is not an adopting State.
       ``(6) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.
       ``(7) State provider freedom of choice law.--The term 
     `State Provider Freedom of Choice Law' means a State law 
     requiring that a health insurance issuer, with respect to 
     health insurance coverage, not discriminate with respect to 
     participation, reimbursement, or indemnification as to any 
     provider who is acting within the scope of the provider's 
     license or certification under applicable State law.
       ``(8) Terms of application.--The term `Terms of 
     Application' means terms provided under section 2922(a).

     ``SEC. 2922. OFFERING AFFORDABLE PLANS.

       ``(a) List of Required Benefits.--Not later than 3 months 
     after the date of enactment of this title, the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners, shall issue by interim final rule a list (to 
     be known as the `List of Required Benefits') of covered 
     benefits, services, or categories of providers that are 
     required to be provided by health insurance issuers, in each 
     of the small group, individual, and large group markets, in 
     at least 26 States as a result of the application of State 
     covered benefit, service, and category of provider mandate 
     laws. With respect to plans sold to or through small business 
     health plans, the List of Required Benefits applicable to the 
     small group market shall apply.
       ``(b) Terms of Application.--
       ``(1) State with mandates.--With respect to a State that 
     has a covered benefit, service, or category of provider 
     mandate in effect that is covered under the List of Required

[[Page S13056]]

     Benefits under subsection (a), such State mandate shall, 
     subject to paragraph (3) (concerning uniform application), 
     apply to a coverage plan or plan in, as applicable, the small 
     group, individual, or large group market or through a small 
     business health plan in such State.
       ``(2) States without mandates.--With respect to a State 
     that does not have a covered benefit, service, or category of 
     provider mandate in effect that is covered under the List of 
     Required Benefits under subsection (a), such mandate shall 
     not apply, as applicable, to a coverage plan or plan in the 
     small group, individual, or large group market or through a 
     small business health plan in such State.
       ``(3) Uniform application of laws.--
       ``(A) In general.--With respect to a State described in 
     paragraph (1), in applying a covered benefit, service, or 
     category of provider mandate that is on the List of Required 
     Benefits under subsection (a) the State shall permit a 
     coverage plan or plan offered in the small group, individual, 
     or large group market or through a small business health plan 
     in such State to apply such benefit, service, or category of 
     provider coverage in a manner consistent with the manner in 
     which such coverage is applied under one of the three most 
     heavily subscribed national health plans offered under the 
     Federal Employee Health Benefits Program under chapter 89 of 
     title 5, United States Code (as determined by the Secretary 
     in consultation with the Director of the Office of Personnel 
     Management), and consistent with the Publication of Benefit 
     Applications under subsection (c). In the event a covered 
     benefit, service, or category of provider appearing in the 
     List of Required Benefits is not offered in one of the three 
     most heavily subscribed national health plans offered under 
     the Federal Employees Health Benefits Program, such covered 
     benefit, service, or category of provider requirement shall 
     be applied in a manner consistent with the manner in which 
     such coverage is offered in the remaining most heavily 
     subscribed plan of the remaining Federal Employees Health 
     Benefits Program plans, as determined by the Secretary, in 
     consultation with the Director of the Office of Personnel 
     Management.
       ``(B) Exception regarding state provider freedom of choice 
     laws.--Notwithstanding subparagraph (A), in the event a 
     category of provider mandate is included in the List of 
     Covered Benefits, any State Provider Freedom of Choice Law 
     (as defined in section 2921(7)) that is in effect in any 
     State in which such category of provider mandate is in effect 
     shall not be preempted, with respect to that category of 
     provider, by this part.
       ``(c) Publication of Benefit Applications.--Not later than 
     3 months after the date of enactment of this title, and on 
     the first day of every calendar year thereafter, the 
     Secretary, in consultation with the Director of the Office of 
     Personnel Management, shall publish in the Federal Register a 
     description of such covered benefits, services, and 
     categories of providers covered in that calendar year by each 
     of the three most heavily subscribed nationally available 
     Federal Employee Health Benefits Plan options which are also 
     included on the List of Required Benefits.
       ``(d) Effective Dates.--
       ``(1) Small business health plans.--With respect to health 
     insurance provided to participating employers of small 
     business health plans, the requirements of this part 
     (concerning lower cost plans) shall apply beginning on the 
     date that is 12 months after the date of enactment of this 
     title.
       ``(2) Non-association coverage.--With respect to health 
     insurance provided to groups or individuals other than 
     participating employers of small business health plans, the 
     requirements of this part shall apply beginning on the date 
     that is 15 months after the date of enactment of this title.
       ``(e) Updating of List of Required Benefits.--Not later 
     than 2 years after the date on which the list of required 
     benefits is issued under subsection (a), and every 2 years 
     thereafter, the Secretary, in consultation with the National 
     Association of Insurance Commissioners, shall update the list 
     based on changes in the laws and regulations of the States. 
     The Secretary shall issue the updated list by regulation, and 
     such updated list shall be effective upon the first plan year 
     following the issuance of such regulation.

     ``SEC. 2923. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--This part shall supersede any and all 
     State laws insofar as such laws relate to mandates relating 
     to covered benefits, services, or categories of provider in 
     the health insurance market as applied to an eligible 
     insurer, or health insurance coverage issued by an eligible 
     insurer, including with respect to coverage issued to a small 
     business health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This part shall supersede any 
     and all State laws of a nonadopting State (whether enacted 
     prior to or after the date of enactment of this title) 
     insofar as such laws--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards, as provided for 
     in section 2922(a); or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the Benefit Choice Standards.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supersede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the Benefit Choice 
     Standards.
       ``(4) No effect on preemption.--In no case shall this part 
     be construed to limit or affect in any manner the preemptive 
     scope of sections 502 and 514 of the Employee Retirement 
     Income Security Act of 1974. In no case shall this part be 
     construed to create any cause of action under Federal or 
     State law or enlarge or affect any remedy available under the 
     Employee Retirement Income Security Act of 1974.
       ``(5) Preemption limited to benefits.--Subsection (a) shall 
     not preempt any State law that does not have a reference to 
     or a connection with State mandates regarding covered 
     benefits, services, or categories of providers that would 
     otherwise apply to eligible insurers.

     ``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The courts of the United States shall 
     have exclusive jurisdiction over civil actions involving the 
     interpretation of this part.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2923.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2925. RULES OF CONSTRUCTION.

       ``(a) In General.--Notwithstanding any other provision of 
     Federal or State law, a health insurance issuer in an 
     adopting State or an eligible insurer in a non-adopting State 
     may amend its existing policies to be consistent with the 
     terms of this subtitle (concerning rating and benefits).
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to create any mandates for coverage of 
     benefits for HSA-qualified health plans that would require 
     reimbursements in violation of section 223(c)(2) of the 
     Internal Revenue Code of 1986.''.

         TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

     SEC. 301. HEALTH INSURANCE STANDARDS HARMONIZATION.

       Title XXIX of the Public Health Service Act (as added by 
     section 201) is amended by adding at the end the following:

                 ``Subtitle B--Standards Harmonization

     ``SEC. 2931. DEFINITIONS.

       ``In this subtitle:
       ``(1) Adopting state.--The term `adopting State' means a 
     State that has enacted the harmonized standards adopted under 
     this subtitle in their entirety and as the exclusive laws of 
     the State that relate to the harmonized standards.
       ``(2) Eligible insurer.--The term `eligible insurer' means 
     a health insurance issuer that is licensed in a nonadopting 
     State and that--
       ``(A) notifies the Secretary, not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage 
     consistent with the harmonized standards in a nonadopting 
     State;
       ``(B) notifies the insurance department of a nonadopting 
     State (or other State agency), not later than 30 days prior 
     to the offering of coverage described in this subparagraph, 
     that the issuer intends to offer health insurance coverage in 
     that State consistent with

[[Page S13057]]

     the harmonized standards published pursuant to section 
     2933(d), and provides with such notice a copy of any 
     insurance policy that it intends to offer in the State, its 
     most recent annual and quarterly financial reports, and any 
     other information required to be filed with the insurance 
     department of the State (or other State agency) by the 
     Secretary in regulations; and
       ``(C) includes in the terms of the health insurance 
     coverage offered in nonadopting States (including in the 
     terms of any individual certificates that may be offered to 
     individuals in connection with such health coverage) and 
     filed with the State pursuant to subparagraph (B), a 
     description of the harmonized standards published pursuant to 
     section 2933(g)(2) and an affirmation that such standards are 
     a term of the contract.
       ``(3) Harmonized standards.--The term `harmonized 
     standards' means the standards certified by the Secretary 
     under section 2933(d).
       ``(4) Health insurance coverage.--The term `health 
     insurance coverage' means any coverage issued in the health 
     insurance market, except that such term shall not include 
     excepted benefits (as defined in section 2791(c).
       ``(5) Nonadopting state.--The term `nonadopting State' 
     means a State that fails to enact, within 18 months of the 
     date on which the Secretary certifies the harmonized 
     standards under this subtitle, the harmonized standards in 
     their entirety and as the exclusive laws of the State that 
     relate to the harmonized standards.
       ``(6) State law.--The term `State law' means all laws, 
     decisions, rules, regulations, or other State actions 
     (including actions by a State agency) having the effect of 
     law, of any State.

     ``SEC. 2932. HARMONIZED STANDARDS.

       ``(a) Board.--
       ``(1) Establishment.--Not later than 3 months after the 
     date of enactment of this title, the Secretary, in 
     consultation with the NAIC, shall establish the Health 
     Insurance Consensus Standards Board (referred to in this 
     subtitle as the `Board') to develop recommendations that 
     harmonize inconsistent State health insurance laws in 
     accordance with the procedures described in subsection (b).
       ``(2) Composition.--
       ``(A) In general.--The Board shall be composed of the 
     following voting members to be appointed by the Secretary 
     after considering the recommendations of professional 
     organizations representing the entities and constituencies 
     described in this paragraph:
       ``(i) Four State insurance commissioners as recommended by 
     the National Association of Insurance Commissioners, of which 
     2 shall be Democrats and 2 shall be Republicans, and of which 
     one shall be designated as the chairperson and one shall be 
     designated as the vice chairperson.
       ``(ii) Four representatives of State government, two of 
     which shall be governors of States and two of which shall be 
     State legislators, and two of which shall be Democrats and 
     two of which shall be Republicans.
       ``(iii) Four representatives of health insurers, of which 
     one shall represent insurers that offer coverage in the small 
     group market, one shall represent insurers that offer 
     coverage in the large group market, one shall represent 
     insurers that offer coverage in the individual market, and 
     one shall represent carriers operating in a regional market.
       ``(iv) Two representatives of insurance agents and brokers.
       ``(v) Two independent representatives of the American 
     Academy of Actuaries who have familiarity with the actuarial 
     methods applicable to health insurance.
       ``(B) Ex officio member.--A representative of the Secretary 
     shall serve as an ex officio member of the Board.
       ``(3) Advisory panel.--The Secretary shall establish an 
     advisory panel to provide advice to the Board, and shall 
     appoint its members after considering the recommendations of 
     professional organizations representing the entities and 
     constituencies identified in this paragraph:
       ``(A) Two representatives of small business health plans.
       ``(B) Two representatives of employers, of which one shall 
     represent small employers and one shall represent large 
     employers.
       ``(C) Two representatives of consumer organizations.
       ``(D) Two representatives of health care providers.
       ``(4) Qualifications.--The membership of the Board shall 
     include individuals with national recognition for their 
     expertise in health finance and economics, actuarial science, 
     health plans, providers of health services, and other related 
     fields, who provide a mix of different professionals, broad 
     geographic representation, and a balance between urban and 
     rural representatives.
       ``(5) Ethical disclosure.--The Secretary shall establish a 
     system for public disclosure by members of the Board of 
     financial and other potential conflicts of interest relating 
     to such members. Members of the Board shall be treated as 
     employees of Congress for purposes of applying title I of the 
     Ethics in Government Act of 1978 (Public Law 95-521).
       ``(6) Director and staff.--Subject to such review as the 
     Secretary deems necessary to assure the efficient 
     administration of the Board, the chair and vice-chair of the 
     Board may--
       ``(A) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General) 
     and such other personnel as may be necessary to carry out its 
     duties (without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service);
       ``(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 Board 
     (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 Board;
       ``(E) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(F) prescribe such rules as it deems necessary with 
     respect to the internal organization and operation of the 
     Board.
       ``(7) Terms.--The members of the Board shall serve for the 
     duration of the Board. Vacancies in the Board shall be filled 
     as needed in a manner consistent with the composition 
     described in paragraph (2).
       ``(b) Development of Harmonized Standards.--
       ``(1) In general.--In accordance with the process described 
     in subsection (c), the Board shall identify and recommend 
     nationally harmonized standards for each of the following 
     process categories:
       ``(A) Form filing and rate filing.--Form and rate filing 
     standards shall be established which promote speed to market 
     and include the following defined areas for States that 
     require such filings:
       ``(i) Procedures for form and rate filing pursuant to a 
     streamlined administrative filing process.
       ``(ii) Timeframes for filings to be reviewed by a State if 
     review is required before they are deemed approved.
       ``(iii) Timeframes for an eligible insurer to respond to 
     State requests following its review.
       ``(iv) A process for an eligible insurer to self-certify.
       ``(v) State development of form and rate filing templates 
     that include only non-preempted State law and Federal law 
     requirements for eligible insurers with timely updates.
       ``(vi) Procedures for the resubmission of forms and rates.
       ``(vii) Disapproval rationale of a form or rate filing 
     based on material omissions or violations of non-preempted 
     State law or Federal law with violations cited and explained.
       ``(viii) For States that may require a hearing, a rationale 
     for hearings based on violations of non-preempted State law 
     or insurer requests.
       ``(B) Market conduct review.--Market conduct review 
     standards shall be developed which provide for the following:
       ``(i) Mandatory participation in national databases.
       ``(ii) The confidentiality of examination materials.
       ``(iii) The identification of the State agency with primary 
     responsibility for examinations.
       ``(iv) Consultation and verification of complaint data with 
     the eligible insurer prior to State actions.
       ``(v) Consistency of reporting requirements with the 
     recordkeeping and administrative practices of the eligible 
     insurer.
       ``(vi) Examinations that seek to correct material errors 
     and harmful business practices rather than infrequent errors.
       ``(vii) Transparency and publishing of the State's 
     examination standards.
       ``(viii) Coordination of market conduct analysis.
       ``(ix) Coordination and nonduplication between State 
     examinations of the same eligible insurer.
       ``(x) Rationale and protocols to be met before a full 
     examination is conducted.
       ``(xi) Requirements on examiners prior to beginning 
     examinations such as budget planning and work plans.
       ``(xii) Consideration of methods to limit examiners' fees 
     such as caps, competitive bidding, or other alternatives.
       ``(xiii) Reasonable fines and penalties for material errors 
     and harmful business practices.
       ``(C) Prompt payment of claims.--The Board shall establish 
     prompt payment standards for eligible insurers based on 
     standards similar to those applicable to the Social Security 
     Act as set forth in section 1842(c)(2) of such Act (42 U.S.C. 
     1395u(c)(2)). Such prompt payment standards shall be 
     consistent with the timing and notice requirements of the 
     claims procedure rules to be specified under subparagraph 
     (D), and shall include appropriate exceptions such as for 
     fraud, nonpayment of premiums, or late submission of claims.
       ``(D) Internal review.--The Board shall establish standards 
     for claims procedures for eligible insurers that are 
     consistent with the requirements relating to initial claims 
     for benefits and appeals of claims for benefits under the 
     Employee Retirement Income Security Act of 1974 as set forth 
     in section 503 of such Act (29 U.S.C. 1133) and the 
     regulations thereunder.
       ``(2) Recommendations.--The Board shall recommend 
     harmonized standards for each element of the categories 
     described in subparagraph (A) through (D) of paragraph (1) 
     within each such market. Notwithstanding

[[Page S13058]]

     the previous sentence, the Board shall not recommend any 
     harmonized standards that disrupt, expand, or duplicate the 
     benefit, service, or provider mandate standards provided in 
     the Benefit Choice Standards pursuant to section 2922(a).
       ``(c) Process for Identifying Harmonized Standards.--
       ``(1) In general.--The Board shall develop recommendations 
     to harmonize inconsistent State insurance laws with respect 
     to each of the process categories described in subparagraphs 
     (A) through (D) of subsection (b)(1).
       ``(2) Requirements.--In adopting standards under this 
     section, the Board shall consider the following:
       ``(A) Any model acts or regulations of the National 
     Association of Insurance Commissioners in each of the process 
     categories described in subparagraphs (A) through (D) of 
     subsection (b)(1).
       ``(B) Substantially similar standards followed by a 
     plurality of States, as reflected in existing State laws, 
     relating to the specific process categories described in 
     subparagraphs (A) through (D) of subsection (b)(1).
       ``(C) Any Federal law requirement related to specific 
     process categories described in subparagraphs (A) through (D) 
     of subsection (b)(1).
       ``(D) In the case of the adoption of any standard that 
     differs substantially from those referred to in subparagraphs 
     (A), (B), or (C), the Board shall provide evidence to the 
     Secretary that such standard is necessary to protect health 
     insurance consumers or promote speed to market or 
     administrative efficiency.
       ``(E) The criteria specified in clauses (i) through (iii) 
     of subsection (d)(2)(B).
       ``(d) Recommendations and Certification by Secretary.--
       ``(1) Recommendations.--Not later than 18 months after the 
     date on which all members of the Board are selected under 
     subsection (a), the Board shall recommend to the Secretary 
     the certification of the harmonized standards identified 
     pursuant to subsection (c).
       ``(2) Certification.--
       ``(A) In general.--Not later than 120 days after receipt of 
     the Board's recommendations under paragraph (1), the 
     Secretary shall certify the recommended harmonized standards 
     as provided for in subparagraph (B), and issue such standards 
     in the form of an interim final regulation.
       ``(B) Certification process.--The Secretary shall establish 
     a process for certifying the recommended harmonized standard, 
     by category, as recommended by the Board under this section. 
     Such process shall--
       ``(i) ensure that the certified standards for a particular 
     process area achieve regulatory harmonization with respect to 
     health plans on a national basis;
       ``(ii) ensure that the approved standards are the minimum 
     necessary, with regard to substance and quantity of 
     requirements, to protect health insurance consumers and 
     maintain a competitive regulatory environment; and
       ``(iii) ensure that the approved standards will not limit 
     the range of group health plan designs and insurance 
     products, such as catastrophic coverage only plans, health 
     savings accounts, and health maintenance organizations, that 
     might otherwise be available to consumers.
       ``(3) Application and effective date.--The standards 
     certified by the Secretary under paragraph (2) shall apply 
     and become effective on the date that is 18 months after the 
     date on which the Secretary certifies the harmonized 
     standards.
       ``(e) Termination.--The Board shall terminate and be 
     dissolved after making the recommendations to the Secretary 
     pursuant to subsection (d)(1).
       ``(f) Ongoing Review.--Not earlier than 3 years after the 
     termination of the Board under subsection (e), and not 
     earlier than every 3 years thereafter, the Secretary, in 
     consultation with the National Association of Insurance 
     Commissioners and the entities and constituencies represented 
     on the Board and the Advisory Panel, shall prepare and submit 
     to the appropriate committees of Congress a report that 
     assesses the effect of the harmonized standards applied under 
     this section on access, cost, and health insurance market 
     functioning. The Secretary may, based on such report and 
     applying the process established for certification under 
     subsection (d)(2)(B), in consultation with the National 
     Association of Insurance Commissioners and the entities and 
     constituencies represented on the Board and the Advisory 
     Panel, update the harmonized standards through notice and 
     comment rulemaking.
       ``(g) Publication.--
       ``(1) Listing.--The Secretary shall maintain an up to date 
     listing of all harmonized standards certified under this 
     section on the Internet website of the Department of Health 
     and Human Services.
       ``(2) Sample contract language.--The Secretary shall 
     publish on the Internet website of the Department of Health 
     and Human Services sample contract language that incorporates 
     the harmonized standards certified under this section, which 
     may be used by insurers seeking to qualify as an eligible 
     insurer. The types of harmonized standards that shall be 
     included in sample contract language are the standards that 
     are relevant to the contractual bargain between the insurer 
     and insured.
       ``(h) State Adoption and Enforcement.--Not later than 18 
     months after the certification by the Secretary of harmonized 
     standards under this section, the States may adopt such 
     harmonized standards (and become an adopting State) and, in 
     which case, shall enforce the harmonized standards pursuant 
     to State law.

     ``SEC. 2933. APPLICATION AND PREEMPTION.

       ``(a) Superseding of State Law.--
       ``(1) In general.--The harmonized standards certified under 
     this subtitle and applied as provided for in section 
     2933(d)(3), shall supersede any and all State laws of a non-
     adopting State insofar as such State laws relate to the areas 
     of harmonized standards as applied to an eligible insurer, or 
     health insurance coverage issued by a eligible insurer, 
     including with respect to coverage issued to a small business 
     health plan, in a nonadopting State.
       ``(2) Nonadopting states.--This subtitle shall supersede 
     any and all State laws of a nonadopting State (whether 
     enacted prior to or after the date of enactment of this 
     title) insofar as they may--
       ``(A) prohibit an eligible insurer from offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards; or
       ``(B) have the effect of retaliating against or otherwise 
     punishing in any respect an eligible insurer for offering, 
     marketing, or implementing health insurance coverage 
     consistent with the harmonized standards under this subtitle.
       ``(b) Savings Clause and Construction.--
       ``(1) Nonapplication to adopting states.--Subsection (a) 
     shall not apply with respect to adopting States.
       ``(2) Nonapplication to certain insurers.--Subsection (a) 
     shall not apply with respect to insurers that do not qualify 
     as eligible insurers who offer health insurance coverage in a 
     nonadopting State.
       ``(3) Nonapplication where obtaining relief under state 
     law.--Subsection (a)(1) shall not supersede any State law of 
     a nonadopting State to the extent necessary to permit 
     individuals or the insurance department of the State (or 
     other State agency) to obtain relief under State law to 
     require an eligible insurer to comply with the harmonized 
     standards under this subtitle.
       ``(4) No effect on preemption.--In no case shall this 
     subtitle be construed to limit or affect in any manner the 
     preemptive scope of sections 502 and 514 of the Employee 
     Retirement Income Security Act of 1974. In no case shall this 
     subtitle be construed to create any cause of action under 
     Federal or State law or enlarge or affect any remedy 
     available under the Employee Retirement Income Security Act 
     of 1974.
       ``(c) Effective Date.--This section shall apply beginning 
     on the date that is 18 months after the date on harmonized 
     standards are certified by the Secretary under this subtitle.

     ``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.

       ``(a) In General.--The district courts of the United States 
     shall have exclusive jurisdiction over civil actions 
     involving the interpretation of this subtitle.
       ``(b) Actions.--An eligible insurer may bring an action in 
     the district courts of the United States for injunctive or 
     other equitable relief against any officials or agents of a 
     nonadopting State in connection with any conduct or action, 
     or proposed conduct or action, by such officials or agents 
     which violates, or which would if undertaken violate, section 
     2933.
       ``(c) Direct Filing in Court of Appeals.--At the election 
     of the eligible insurer, an action may be brought under 
     subsection (b) directly in the United States Court of Appeals 
     for the circuit in which the nonadopting State is located by 
     the filing of a petition for review in such Court.
       ``(d) Expedited Review.--
       ``(1) District court.--In the case of an action brought in 
     a district court of the United States under subsection (b), 
     such court shall complete such action, including the issuance 
     of a judgment, prior to the end of the 120-day period 
     beginning on the date on which such action is filed, unless 
     all parties to such proceeding agree to an extension of such 
     period.
       ``(2) Court of appeals.--In the case of an action brought 
     directly in a United States Court of Appeal under subsection 
     (c), or in the case of an appeal of an action brought in a 
     district court under subsection (b), such Court shall 
     complete all action on the petition, including the issuance 
     of a judgment, prior to the end of the 60-day period 
     beginning on the date on which such petition is filed with 
     the Court, unless all parties to such proceeding agree to an 
     extension of such period.
       ``(e) Standard of Review.--A court in an action filed under 
     this section, shall render a judgment based on a review of 
     the merits of all questions presented in such action and 
     shall not defer to any conduct or action, or proposed conduct 
     or action, of a nonadopting State.

     ``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS; RULE OF 
                   CONSTRUCTION.

       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this subtitle.
       ``(b) Health Savings Accounts.--Nothing in this subtitle 
     shall be construed to create any mandates for coverage of any 
     benefits below the deductible levels set for any health 
     savings account-qualified health plan pursuant to section 223 
     of the Internal Revenue Code of 1986.''.
                                 ______
                                 
  SA 3198. Mr. CORNYN (for himself and Mr. LeMieux) submitted an 
amendment intended to be proposed to

[[Page S13059]]

amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr. 
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal 
Revenue Code of 1986 to modify the first-time homebuyers credit in the 
case of members of the Armed Forces and certain other Federal 
employees, and for other purposes; which was ordered to lie on the 
table; as follows:

       Strike all after the first word and insert the following:

     1. SHORT TITLE.

       This Act may be cited as the ``Seniors and Taxpayers 
     Obligation Protection Act of 2009''.

     SEC. 2. REQUIRING THE SECRETARY OF HEALTH AND HUMAN SERVICES 
                   TO CHANGE THE MEDICARE BENEFICIARY IDENTIFIER 
                   USED TO IDENTIFY MEDICARE BENEFICIARIES UNDER 
                   THE MEDICARE PROGRAM.

       (a) Procedures.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, in order to protect beneficiaries from 
     identity theft, the Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     establish and implement procedures to change the Medicare 
     beneficiary identifier used to identify individuals entitled 
     to benefits under part A of title XVIII of the Social 
     Security Act or enrolled under part B of such title so that 
     such an individual's social security account number is not 
     used.
       (2) Maintaining existing hicn structure.--In order to 
     minimize the impact of the change under paragraph (1) on 
     systems that communicate with Medicare beneficiary 
     eligibility systems, the procedures under paragraph (1) shall 
     provide that the new Medicare beneficiary identifier maintain 
     the existing Health Insurance Claim Number structure.
       (3) Protection against fraud.--The procedures under 
     paragraph (1) shall provide for a process for changing the 
     Medicare beneficiary identifier for an individual to a 
     different identifier in the case of the discovery of fraud, 
     including identity theft.
       (4) Phase-in authority.--
       (A) In general.--Subject to subparagraphs (B) and (C), the 
     Secretary may phase in the change under paragraph (1) in such 
     manner as the Secretary determines appropriate.
       (B) Limit.--The phase-in period under subparagraph (A) 
     shall not exceed 10 years.
       (C) Newly entitled and enrolled individuals.--The Secretary 
     shall ensure that the change under paragraph (1) is 
     implemented not later than January 1, 2010, with respect to 
     any individual who first becomes entitled to benefits under 
     part A of title XVIII of the Social Security Act or enrolled 
     under part B of such title on or after such date.
       (b) Education and Outreach.--The Secretary shall establish 
     a program of education and outreach for individuals entitled 
     to, or enrolled for, benefits under part A of title XVIII of 
     the Social Security Act or enrolled under part B of such 
     title, providers of services (as defined in subsection (u) of 
     section 1861 of such Act (42 U.S.C. 1395x)), and suppliers 
     (as defined in subsection (d) of such section) on the change 
     under paragraph (1).
       (c) Data Matching.--
       (1) Access to certain information.--Section 205(r) of the 
     Social Security Act (42 U.S.C. 405(r)) is amended by adding 
     at the end the following new paragraph:
       ``(9)(A) The Commissioner of Social Security shall, upon 
     the request of the Secretary--
       ``(i) enter into an agreement with the Secretary for the 
     purpose of matching data in the system of records of the 
     Commissioner with data in the system of records of the 
     Secretary, so long as the requirements of subparagraphs (A) 
     and (B) of paragraph (3) are met, in order to determine--
       ``(I) whether a beneficiary under the program under title 
     XVIII, XIX, or XXI is dead, imprisoned, or otherwise not 
     eligible for benefits under such program; and
       ``(II) whether a provider of services or a supplier under 
     the program under title XVIII, XIX, or XXI is dead, 
     imprisoned, or otherwise not eligible to furnish or receive 
     payment for furnishing items and services under such program; 
     and
       ``(ii) include in such agreement safeguards to assure the 
     maintenance of the confidentiality of any information 
     disclosed and procedures to permit the Secretary to use such 
     information for the purpose described in clause (i).
       ``(B) Information provided pursuant to an agreement under 
     this paragraph shall be provided at such time, in such place, 
     and in such manner as the Commissioner determines 
     appropriate.
       ``(C) Information provided pursuant to an agreement under 
     this paragraph shall include information regarding whether--
       ``(i) the name (including the first name and any family 
     name or surname), the date of birth (including the month, 
     day, and year), and social security number of an individual 
     provided to the Commissioner match the information contained 
     in the Commissioner's records, and
       ``(ii) such individual is shown on the records of the 
     Commissioner as being deceased.''.
       (2) Investigation based on certain information.--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. ACCESS TO CERTAIN DATA AND INVESTIGATION OF 
                   CLAIMS INVOLVING INDIVIDUALS WHO ARE NOT 
                   ELIGIBLE FOR BENEFITS OR ARE NOT ELIGIBLE 
                   PROVIDERS OF SERVICES OR SUPPLIERS.

       ``(a) Data Agreement.--The Secretary shall enter into an 
     agreement with the Commissioner of Social Security pursuant 
     to section 205(r)(9).
       ``(b) Investigation of Claims Involving Certain Individuals 
     Who Are Not Eligible for Benefits or Are Not Eligible 
     Providers of Services or Suppliers.--
       ``(1) In general.--The Secretary shall, in the case where a 
     provider of services or a supplier under the program under 
     title XVIII, XIX, or XXI submits a claim for payment for 
     items or services furnished to an individual who the 
     Secretary determines, as a result of information provided 
     pursuant to such agreement, is not eligible for benefits 
     under such program, or where the Secretary determines, as a 
     result of such information, that such provider of services or 
     supplier is not eligible to furnish or receive payment for 
     furnishing such items or services, conduct an investigation 
     with respect to the provider of services or supplier. If the 
     Secretary determines further action is appropriate, the 
     Secretary shall refer the investigation to the Inspector 
     General of the Department of Health and Human Services.
       ``(2) Assessment of implementation and effectiveness by the 
     oig.--The Inspector General of the Department of Health and 
     Human Services shall test the implementation of the 
     provisions of this section (including the implementation of 
     the agreement under section 205(r)(9)) and conduct such 
     period assessments of such implementation as the Inspector 
     General determines necessary to determine the effectiveness 
     of such implementation.''.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 3. MONTHLY VERIFICATION OF ACCURACY OF CLAIMS FOR 
                   PAYMENT FOR PHYSICIANS' SERVICES.

       (a) In General.--Section 1893 of the Social Security Act 
     (42 U.S.C. 1395ddd) is amended--
       (1) in subsection (b), by adding at the end the following 
     new paragraph:
       ``(7) The monthly verification of the accuracy of claims 
     for payment for physicians' services under the system under 
     subsection (i).''; and
       (2) by adding at the end the following new subsection:
       ``(i) Monthly Verification of Accuracy of Claims for 
     Payment for Physicians' Services.--
       ``(1) System.--
       ``(A) In general.--Not later than 1 year after the date of 
     the enactment of this subsection, the Secretary shall 
     establish and implement a system to verify (electronically or 
     otherwise, taking into consideration the administrative 
     burden of such verification on physicians and group 
     practices) on a monthly basis that the claims for payment 
     under part B for physicians' services furnished in high risk 
     areas are--
       ``(i) for physicians' services actually furnished by the 
     physician or the physician's group practice; and
       ``(ii) otherwise accurate.
       ``(B) No determination of medical necessity.--In no case 
     shall any verification conducted under the system established 
     under subparagraph (A) include a determination of the medical 
     necessity of the physicians' service.
       ``(2) Verification.--Under the system, the Secretary, at 
     the end of each month, shall provide the physician or the 
     group practice with a detailed list of such claims for 
     payment that were submitted during the month in order for the 
     physician or the group practice to review and verify the 
     list. In providing the detailed list, the Secretary shall use 
     the provider number of the physician or the group practice.
       ``(3) Audits.--The Secretary shall conduct audits of the 
     review and verification by physicians and group practices of 
     the detailed list provided under paragraph (2). Such audits 
     shall assess whether the physician or group practice 
     conducted such review and verification in a fraudulent 
     manner. In the case where the Secretary determines such 
     review and verification was conducted in a fraudulent manner, 
     the Secretary shall recoup any payments resulting from the 
     fraudulent review and verification and impose a civil money 
     penalty in an amount determined appropriate by the Secretary 
     on the physician or group practice who conducted the 
     fraudulent review and verification. The provisions of section 
     1128A (other than subsections (a) and (b)) shall apply to a 
     civil money penalty under the previous sentence in the same 
     manner as such provisions apply to a penalty or proceeding 
     under section 1128A(a).
       ``(4) High risk areas defined.--In this subsection, the 
     term `high risk area' means a county designated as a high 
     risk area under subsection (j)(1).
       ``(5) Report by the secretary.--Not later than 1 year after 
     implementation of the system established under paragraph (1), 
     the Secretary shall submit a report to Congress on the 
     progress of such implementation. Such report shall include 
     recommendations--
       ``(A) on how to improve such implementation, including 
     whether the system should be expanded to include verification 
     of claims for payment under part B for physicians' services 
     furnished in additional areas; and

[[Page S13060]]

       ``(B) for such legislation and administrative action as the 
     Secretary determines appropriate.''.
       (b) Authorization of Appropriations.--To carry out the 
     amendments made by this section, there are authorized to be 
     appropriated such sums as may be necessary for each of fiscal 
     years 2010 through 2014.

     SEC. 4. DETECTION OF MEDICARE FRAUD AND ABUSE.

       (a) In General.--Section 1893 of the Social Security Act 
     (42 U.S.C. 1395ddd), as amended by section 3, is amended--
       (1) in subsection (b), by adding at the end the following 
     new paragraph:
       ``(8) Implementation of fraud and abuse detection methods 
     under subsection (j).'';
       (2) in subsection (c), by adding at the end of the flush 
     matter following paragraph (4), the following new sentence 
     ``In the case of an activity described in subsection (b)(8), 
     an entity shall only be eligible to enter into a contract 
     under the Program to carry out the activity if the entity is 
     selected through a competitive bidding process in accordance 
     with subsection (j)(3).''; and
       (3) by adding at the end the following new subsection:
       ``(j) Detection of Medicare Fraud and Abuse.--
       ``(1) Establishment of system to identify counties most 
     vulnerable to fraud.--Not later than 6 months after the date 
     of enactment of this subsection, the Secretary shall 
     establish a system to identify the 50 counties most 
     vulnerable to fraud with respect to items and services 
     furnished by providers of services (other than hospitals and 
     critical access hospitals) and suppliers based on the degree 
     of county-specific reimbursement and analysis of payment 
     trends under this title. The Secretary shall designate the 
     counties identified under the preceding sentence as `high 
     risk areas'.
       ``(2) Fraud and abuse detection.--
       ``(A) Initial implementation.--The Secretary shall 
     establish procedures for the implementation of fraud and 
     abuse detection methods under this title with respect to 
     items and services furnished by such providers of services 
     and suppliers in high risk areas designated under paragraph 
     (1) (and, beginning not later than 18 months after the date 
     of enactment of this subsection, with respect to items and 
     services furnished by such providers of services and 
     suppliers in areas not so designated) including the 
     following:
       ``(i) In the case of a new applicant to be a supplier, a 
     background check, a pre-enrollment site visit, and random 
     unannounced site visits after enrollment.
       ``(ii) Not less than 5 years after the date of enactment of 
     this subsection, in the case of a supplier who is not a new 
     applicant, re-enrollment under this title, including a 
     background check and a site-visit as part of the application 
     process for such re-enrollment, and random unannounced site 
     visits after such re-enrollment.
       ``(iii) Data analysis to establish prepayment claim edits 
     designed to target the claims for payment under this title 
     for such items and services that are most likely to be 
     fraudulent.
       ``(iv) Prepayment benefit integrity reviews for claims for 
     payment under this title for such items and services that are 
     suspended as a result of such edits.
       ``(B) Requirement for participation.--In no case may a 
     provider of services or supplier who does not meet the 
     requirements under subparagraph (A) (including, in the case 
     of a supplier, the requirement of a background check) 
     participate in the program under this title.
       ``(C) Background checks.--The Secretary shall determine the 
     extent of the background check conducted under subparagraph 
     (A), including whether--
       ``(i) a fingerprint check is necessary;
       ``(ii) a background check shall be conducted with respect 
     to additional employees, board members, contractors or other 
     interested parties of the supplier; and
       ``(iii) any additional national background checks regarding 
     exclusion from participation in Federal programs (such as the 
     program under this title, title XIX, or title XXI), adverse 
     actions taken by State licensing boards, bankruptcies, 
     outstanding taxes, or other indications identified by the 
     Inspector General of the Department of Health and Human 
     Services are necessary.
       ``(D) Expanded implementation.--Not later than 24 months 
     after the date of enactment of this subsection, the Secretary 
     shall establish procedures for the implementation of such 
     fraud and abuse detection methods under this title with 
     respect to items and services furnished by all providers of 
     services and suppliers, including those not in high risk 
     areas designated under paragraph (1).
       ``(3) Competitive bidding.--In selecting entities to carry 
     out this subsection, the Secretary shall use a competitive 
     bidding process.
       ``(4) Report to congress.--The Secretary shall submit to 
     Congress an annual report on the effectiveness of activities 
     conducted under this subsection, including a description of 
     any savings to the program under this title as a result of 
     such activities and the overall administrative cost of such 
     activities and a determination as to the amount of funding 
     needed to carry out this subsection for subsequent fiscal 
     years, together with recommendations for such legislation and 
     administrative action as the Secretary determines 
     appropriate.''.
       (b) Authorization of Appropriations.--To carry out the 
     amendments made by this section, there are authorized to be 
     appropriated--
       (1) such sums as may be necessary, not to exceed 
     $50,000,000, for each of fiscal years 2010 through 2014; and
       (2) such sums as may be necessary, not to exceed an amount 
     the Secretary determines appropriate in the most recent 
     report submitted to Congress under section 1893(j)(4) of the 
     Social Security Act, as added by subsection (a), for each 
     subsequent fiscal year.

     SEC. 5. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.

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

     ``SEC. 1899. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.

       ``(a) In General.--The Secretary of Health and Human 
     Services shall establish procedures for the use of technology 
     (similar to that used with respect to the analysis of credit 
     card charging patterns) to provide real-time data analysis of 
     claims for payment under the Medicare program under title 
     XVIII of the Social Security Act to identify and investigate 
     unusual billing or order practices under the Medicare program 
     that could indicate fraud or abuse.
       ``(b) Competitive Bidding.--The procedures established 
     under subsection (a) shall ensure that the implementation of 
     such technology is conducted through a competitive bidding 
     process.''.

     SEC. 6. EDITS ON 855S MEDICARE ENROLLMENT APPLICATION.

       Section 1834(a) of the Social Security Act (42 U.S.C. 
     1395m(a)) is amended by adding at the end the following new 
     paragraph:
       ``(22) Confirmation with national supplier clearinghouse 
     prior to payment.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this paragraph, the Secretary shall establish 
     procedures to require carriers, prior to paying a claim for 
     payment for durable medical equipment, prosthetics, 
     orthotics, and supplies under this title, to confirm with the 
     National Supplier Clearinghouse--
       ``(i) that the National Provider Identifier of the 
     physician or practitioner prescribing or ordering the item or 
     service is valid and active;
       ``(ii) that the Medicare identification number of the 
     supplier is valid and active; and
       ``(iii) that the item or service for which the claim for 
     payment is submitted was properly identified on the CMS-855S 
     Medicare enrollment application.
       ``(B) Online database for implementation.--Not later than 
     18 months after the date of enactment of this paragraph, the 
     Secretary shall establish an online database similar to that 
     used for the National Provider Identifier to enable providers 
     of services, accreditors, carriers, and the National Supplier 
     Clearinghouse to view information on specialties and the 
     types of items and services each supplier has indicated on 
     the CMS-855S Medicare enrollment application submitted by the 
     supplier.
       ``(C) Notification of claim denial and resubmission.--In 
     the case where a claim for payment for durable medical 
     equipment, prosthetics, orthotics, and supplies under this 
     title is denied because the item or service furnished does 
     not correctly match up with the information on file with the 
     National Supplier Clearinghouse--
       ``(i) the National Supplier Clearinghouse shall--

       ``(I) provide the supplier written notification of the 
     reason for such denial; and
       ``(II) allow the supplier 60 days to provide the National 
     Supplier Clearinghouse with appropriate certification, 
     licensing, or accreditation; and

       ``(ii) the Secretary shall waive applicable requirements 
     relating to the time frame for the submission of claims for 
     payment under this title in order to permit the resubmission 
     of such claim if payment of such claim would otherwise be 
     allowed under this title.''.

     SEC. 7. STRATEGIC PLAN FOR THE DEVELOPMENT OF A SERIAL NUMBER 
                   TRACKING SYSTEM FOR DURABLE MEDICAL EQUIPMENT.

       Section 1834(a) of the Social Security Act (42 U.S.C. 
     1395m(a)), as amended by section 6(a), is amended by adding 
     at the end the following new paragraph:
       ``(23) Strategic plan for the development of a serial 
     number tracking system for durable medical equipment.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this paragraph, the Secretary shall develop a 
     strategic plan for the development and implementation of a 
     serial number tracking system for durable medical equipment.
       ``(B) Serial number tracking system for durable medical 
     equipment.--The plan developed under subparagraph (A) shall 
     include mechanisms to ensure that an item of durable medical 
     equipment which has not been issued a unique identifier under 
     the unique device identification system established under 
     section 519(f) of the Federal Food, Drug, and Cosmetic Act 
     bears a unique identifier, unless the Secretary already 
     requires an alternative placement or provides an exception 
     for a particular item or type of durable medical equipment 
     under such section 519(f).
       ``(C) Provision of unique identifier to the secretary.--The 
     plan developed under subparagraph (A) shall include 
     appropriate mechanisms for manufacturers of items of durable 
     medical equipment to submit to the Secretary unique 
     identifiers issued under subparagraph (B) or such section 
     519(f) with

[[Page S13061]]

     respect to such items. The plan shall include mechanisms for 
     the Secretary to provide for the storage of such unique 
     identifier in accordance with subparagraph (F)(i).
       ``(D) Requirements for manufacturers and wholesalers.--The 
     plan developed under subparagraph (A) shall include 
     mechanisms for manufacturers of items of durable medical 
     equipment, or, in the case where a wholesaler provides an 
     item of durable medical equipment to suppliers, wholesalers, 
     to--
       ``(i) upon issuing an item to a supplier, develop a product 
     description for the item which includes--

       ``(I) the unique identifier of the item;
       ``(II) the specific Healthcare Common Procedure Coding 
     System (HCPCS) code for the item;
       ``(III) the name of the supplier the item was shipped to; 
     and
       ``(IV) the supplier's Medicare identification number; and

       ``(ii) submit the product description developed under 
     clause (i) to the Secretary for storage in the unique 
     identifier database in accordance with subparagraph (F)(i).
       ``(E) Requirements for suppliers.--The plan developed under 
     subparagraph (A) shall include mechanisms to ensure that 
     suppliers of items of durable medical equipment--
       ``(i) upon issuing the item to a beneficiary, note the 
     unique identifier of such item on--

       ``(I) the claim form submitted for such item; and
       ``(II) when appropriate or otherwise required, the detailed 
     product description of the item;

       ``(ii) in the case where the item is issued to a 
     beneficiary on a rental basis, designate the unique 
     identifier with an `R' after the number to indicate that the 
     item was rented, and not purchased, by the beneficiary; and
       ``(iii) upon return of the item to the supplier, notify the 
     Secretary--

       ``(I) before reissuing that item and resubmitting that 
     number on such a claim form; or
       ``(II) upon resubmitting that number on such a claim form.

       ``(F) Responsibilities for the secretary.--
       ``(i) Maintenance of database of serial numbers.--The plan 
     developed under subparagraph (A) shall include the 
     responsibility of the Secretary to establish and maintain a 
     database containing the unique identifiers submitted by 
     manufacturers of items of durable medical equipment under 
     subparagraph (C).
       ``(ii) Payment.--

       ``(I) Limitation.--Subject to subclause (II), the plan 
     developed under subparagraph (A) shall include mechanisms to 
     ensure that payment may only be made for an item of durable 
     medical equipment if the unique identifier on the claim form 
     submitted for such item matches the unique identifier 
     submitted by the manufacturer of such item under subparagraph 
     (C).
       ``(II) Exception to limitation after verification of 
     receipt.--The plan developed under subparagraph (A) shall 
     include mechanisms to ensure that in the case where the 
     unique identifier is not on the claim form submitted for such 
     item or does not match the unique identifier submitted by the 
     manufacturer of such item under subparagraph (C), no payment 
     shall be made under this part for the item of durable medical 
     equipment until the Secretary has verified that the 
     beneficiary has received such item in accordance with 
     subclause (IV).
       ``(III) Duplicative unique identifiers.--The plan developed 
     under subparagraph (A) shall include mechanisms to ensure 
     that in the case where a unique identifier is submitted on 
     more than 1 claim form submitted for such an item and there 
     is no indication from the supplier that the item of durable 
     medical equipment has been returned by 1 beneficiary and is 
     now being used by another beneficiary, no payment shall be 
     made under this part for such item of durable medical 
     equipment unless the Secretary has verified that the 
     beneficiary has received such item in accordance with 
     subclause (IV).
       ``(IV) Verification.--The plan developed under subparagraph 
     (A) shall include provisions for the Secretary to conduct any 
     verification required under subclause (II) or (III) within 30 
     days after receipt by the Secretary of the relevant claim 
     form. In the case where such verification is not completed 
     within such time period, the Secretary shall pay such claim, 
     complete the verification, and, in the case where the 
     Secretary has entered into a contract with an entity for the 
     conduct of such verification, recover any payments that would 
     not have been made if the verification had been completed 
     within such time period from such entity.

       ``(iii) Quality control audits.--The plan developed under 
     subparagraph (A) shall include a requirement that the 
     Secretary conduct quality control audits to identify unusual 
     billing patterns with respect to items of durable medical 
     equipment for which payment is made under this part and may 
     provide that the Secretary conduct unannounced site visits or 
     commission other agencies to conduct such site visits as part 
     of such quality control audits.
       ``(iv) No use as a precertification mechanism.--The plan 
     developed under subparagraph (A) shall include mechanisms to 
     ensure that in no case shall a unique identifier issued under 
     subparagraph (B) or section 519(f) of the Federal Food, Drug, 
     and Cosmetic Act be used as a precertification mechanism for 
     the supply of an item of durable medical equipment or the 
     payment of a claim for such an item under this part.''.

     SEC. 8. GAO STUDY AND REPORT ON EFFECTIVENESS OF SURETY BOND 
                   REQUIREMENTS FOR SUPPLIERS OF DURABLE MEDICAL 
                   EQUIPMENT IN COMBATING FRAUD.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study on the effectiveness of the surety bond 
     requirement under section 1834(a)(16) of the Social Security 
     Act (42 U.S.C. 1395m(a)(16)) in combating fraud.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report containing the results of the study 
     conducted under subsection (a), together with recommendations 
     for such legislation and administrative action as the 
     Comptroller General determines appropriate.

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