[Congressional Record (Bound Edition), Volume 155 (2009), Part 11]
[Senate]
[Pages 14320-14340]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DURBIN:
  S. 1212. A bill to amend the antitrust laws to ensure competitive 
market-based fees and terms for merchants' access to electronic payment 
systems; to the Committee on the Judiciary.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

[[Page 14321]]



                                S. 1212

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Credit Card Fair Fee Act of 
     2009''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Access.--The term ``access''--
       (A) when used as a verb means to use to conduct transaction 
     authorization, clearance, and settlement involving the 
     acceptance of credit cards or debit cards from consumers for 
     payment for goods or services and the receipt of payment for 
     such goods or services; and
       (B) when used as a noun means the permission or authority 
     to use to conduct transactions described in subparagraph (A).
       (2) Access agreement.--The term ``access agreement'' means 
     an agreement between 1 or more merchants and 1 or more 
     providers giving the merchant access to a covered electronic 
     payment system, conditioned solely upon the merchant 
     complying with the fees and terms specified in the agreement.
       (3) Acquirer.--The term ``acquirer''--
       (A) means a financial institution that provides services 
     allowing merchants to access an electronic payment system to 
     accept credit cards or debit cards for payment; and
       (B) does not include an independent third party processor 
     that may act as the agent of a financial institution 
     described in subparagraph (A) in processing general-purpose 
     credit card or debit card transactions.
       (4) Adjudication.--The term ``adjudication'' has the 
     meaning given that term in section 551 of title 5, United 
     States Code, and does not include mediation.
       (5) Antitrust laws.--The term ``antitrust laws''--
       (A) has the meaning given that term in subsection (a) of 
     the first section of the Clayton Act (15 U.S.C. 12(a)); and
       (B) includes--
       (i) section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45) to the extent section 5 applies to unfair methods 
     of competition; and
       (ii) State antitrust laws.
       (6) Chairman.--The term ``Chairman'' means the Chairman of 
     the Federal Trade Commission.
       (7) Covered electronic payment system.--The term ``covered 
     electronic payment system'' means an electronic payment 
     system that routes information and data to facilitate 
     transaction authorization, clearance, and settlement for not 
     less than 10 percent of the combined dollar value of credit 
     card or debit card payments processed in the United States in 
     the most recent full calendar year.
       (8) Credit card.--The term ``credit card'' means any 
     general-purpose card or other credit device issued or 
     approved for use by a financial institution for use in 
     allowing the cardholder to obtain goods or services on credit 
     on terms specified by that financial institution.
       (9) Debit card.--The term ``debit card'' means any general-
     purpose card or other device issued or approved for use by a 
     financial institution for use in debiting the account of a 
     cardholder for the purpose of that cardholder obtaining goods 
     or services, whether authorization is signature-based or PIN-
     based.
       (10) Electronic payment system.--The term ``electronic 
     payment system'' means the proprietary services, 
     infrastructure, and software that route information and data 
     to facilitate transaction authorization, clearance, and 
     settlement and that merchants are required to access in order 
     to accept a specific brand of general-purpose credit cards or 
     debit cards as payment for goods or services.
       (11) Electronic payment system judges.--The term 
     ``Electronic Payment System Judges'' means the Electronic 
     Payment System Judges appointed under section 4(a).
       (12) Fees.--The term ``fees'' means any monetary charges, 
     rates, assessments, or other payments imposed by a provider 
     upon a merchant for the merchant to access an electronic 
     payment system.
       (13) Financial institution.--The term ``financial 
     institution'' has the meaning given that term in section 
     603(t) of the Fair Credit Reporting Act (15 U.S.C. 1681a(t)).
       (14) Issuer.--The term ``issuer''--
       (A) means a financial institution that issues credit cards 
     or debit cards or approves the use of other devices for use 
     in an electronic payment system; and
       (B) does not include an independent third party processor 
     that may act as the agent of a financial institution 
     described in subparagraph (A) in processing general-purpose 
     credit or debit card transactions.
       (15) Market power.--The term ``market power'' means the 
     ability to profitably raise prices above those that would be 
     charged in a perfectly competitive market.
       (16) Merchant.--The term ``merchant'' means any person who 
     accepts or who seeks to accept credit cards or debit cards in 
     payment for goods or services provided by the person.
       (17) Negotiating party.--The term ``negotiating party'' 
     means 1 or more providers of a covered electronic payment 
     system or 1 or more merchants who have access to or who are 
     seeking access to that covered electronic payment system, as 
     the case may be, and who are in the process of negotiating or 
     who have executed a voluntarily negotiated access agreement 
     that is still in effect.
       (18) Normal rate of return.--The term ``normal rate of 
     return'' means the average rate of return that a firm would 
     receive in an industry when conditions of perfect competition 
     prevail.
       (19) Proceeding party.--The term ``proceeding party'' means 
     collectively all providers of a covered electronic payment 
     system or collectively all merchants who have access to or 
     who are seeking access to that covered electronic payment 
     system, as the case may be, during the period in which the 
     Electronic Payment System Judges are conducting a proceeding 
     under this Act relating to that covered electronic payment 
     system.
       (20) Person.--The term ``person'' has the meaning given 
     that term in subsection (a) of the first section of the 
     Clayton Act (15 U.S.C. 12(a)).
       (21) Provider.--The term ``provider'' means any person who 
     owns, operates, controls, serves as an issuer for, or serves 
     as an acquirer for a covered electronic payment system.
       (22) State.--The term ``State'' has the meaning given that 
     term in section 4G(2) of the Clayton Act (15 U.S.C. 15g(2)).
       (23) Terms.--The term ``terms'' means any and all rules and 
     conditions that are applicable to providers of an electronic 
     payment system or to merchants, as the case may be, and that 
     are required in order for merchants to access that electronic 
     payment system.
       (24) Voluntarily negotiated access agreement.--The term 
     ``voluntarily negotiated access agreement'' means an access 
     agreement voluntarily negotiated between 1 or more providers 
     of a covered electronic payment system and 1 or more 
     merchants that sets the fees and terms under which the 
     merchant can access that covered electronic payment system.
       (25) Written direct statements.--The term ``written direct 
     statements'' means witness statements, testimony, and 
     exhibits to be presented in proceedings under this Act, and 
     such other information that is necessary to establish fees 
     and terms for access to covered electronic payment systems as 
     set forth in regulations issued by the Electronic Payment 
     System Judges under section 5(b)(4).

     SEC. 3. ACCESS TO COVERED ELECTRONIC PAYMENT SYSTEMS; LIMITED 
                   ANTITRUST IMMUNITY FOR THE NEGOTIATION AND 
                   DETERMINATION OF FEES AND TERMS; STANDARDS FOR 
                   ESTABLISHMENT OF FEES AND TERMS.

       (a) Access to Covered Electronic Payment Systems.--Access 
     by a merchant to any covered electronic payment system and 
     the fees and terms of such access shall be subject to this 
     Act.
       (b) Authority and Limited Antitrust Immunity for 
     Negotiations of Fees and Terms and Participation in 
     Proceedings.--
       (1) In general.--Notwithstanding any provision of the 
     antitrust laws--
       (A) in negotiating fees and terms and participating in any 
     proceedings under subsection (c), any providers of a covered 
     electronic payment system and any merchants who have access 
     to or who are seeking access to that covered electronic 
     payment system may jointly negotiate and agree upon the fees 
     and terms for access to the covered electronic payment 
     system, including through the use of common agents that 
     represent the providers of the covered electronic payment 
     system or the merchants on a nonexclusive basis; and
       (B) any providers of a single covered electronic payment 
     system also may jointly determine the proportionate division 
     among such providers of paid fees.
       (2) Limitations.--The immunity from the antitrust laws 
     conferred under this subsection shall not apply to a provider 
     of a covered electronic payment system or to a merchant 
     during any period in which such provider, or such merchant, 
     is engaged in--
       (A) any unlawful boycott;
       (B) any allocation with a competitor of a geographical 
     area;
       (C) any unlawful tying arrangement; or
       (D) any exchange of information with, or agreement with, a 
     competitor that is not reasonably required to carry out the 
     negotiations and proceedings described in subsection (c).
       (c) Establishment of Fees and Terms.--
       (1) Voluntarily negotiated access agreements.--
       (A) Agreements between negotiating parties.--A voluntarily 
     negotiated access agreement may be executed at any time 
     between 1 or more providers of a covered electronic payment 
     system and 1 or more merchants. With respect to the 
     negotiating parties, such executed voluntarily negotiated 
     access agreement shall supersede any fees or terms 
     established by the Electronic Payment System Judges under 
     paragraph (3) relating to that covered electronic payment 
     system.
       (B) Filing agreements with the electronic payment system 
     judges.--The negotiating parties shall jointly file with the 
     Electronic Payment System Judges--
       (i) any voluntarily negotiated access agreement that 
     affects any market in the United States or elsewhere;

[[Page 14322]]

       (ii) any documentation relating to a voluntarily negotiated 
     access agreement evidencing any consideration being given or 
     any marketing or promotional agreement between the 
     negotiating parties; and
       (iii) any amendment to that voluntarily negotiated access 
     agreement or documentation.
       (C) Timing and availability of filings.--The negotiating 
     parties to any voluntarily negotiated access agreement 
     executed after the date of enactment of this Act shall 
     jointly file the voluntarily negotiated access agreement, and 
     any documentation or amendment described in subparagraph (B), 
     with the Electronic Payment System Judges not later than 30 
     days after the date of execution of the voluntarily 
     negotiated access agreement or amendment or the date of the 
     creation of the documentation, as the case may be. The 
     Electronic Payment System Judges shall make publicly 
     available any voluntarily negotiated access agreement, 
     amendment, or accompanying documentation filed under this 
     paragraph.
       (2) Initiation of proceedings.--The proceedings under this 
     subsection to establish fees and terms for access to a 
     covered electronic payment system shall be initiated in 
     accordance with section 6.
       (3) Proceedings.--
       (A) In general.--The Electronic Payment System Judges shall 
     conduct proceedings as specified under this Act to establish 
     fees and terms for access to a covered electronic payment 
     system. Except as specifically provided in a voluntarily 
     negotiated access agreement, a provider of a covered 
     electronic payment system may not directly or indirectly 
     charge fees or set terms for access to a covered electronic 
     payment system that are not in accordance with the fees and 
     terms established by the Electronic Payment System Judges 
     pursuant to proceedings under this Act.
       (B) Period of applicability.--Except as provided in section 
     6, the fees and terms established under this paragraph with 
     respect to a covered electronic payment system shall apply 
     during the 3-year period beginning on January 1 of the second 
     year following the year in which the proceedings to establish 
     such fees and terms are commenced.
       (C) Standard for establishment of fees and terms by the 
     electronic payment system judges.--
       (i) In general.--In establishing fees and terms for access 
     to a covered electronic payment system under subparagraph 
     (A), the Electronic Payment System Judges--

       (I) shall be limited to selecting, without modification, 1 
     of the 2 final offers of fees and terms filed by the 
     proceeding parties pursuant to section 5(c)(2)(A); and
       (II) shall select the final offer of fees and terms that 
     most closely represent the fees and terms that would be 
     negotiated in a hypothetical perfectly competitive 
     marketplace for access to an electronic payment system 
     between a willing buyer with no market power and a willing 
     seller with no market power.

       (ii) Standards.--In determining which final offer of fees 
     and terms to select, the Electronic Payment System Judges--

       (I) shall consider the costs of transaction authorization, 
     clearance, and settlement that are necessary to operate and 
     to access an electronic payment system;
       (II) shall consider a normal rate of return in a 
     hypothetical perfectly competitive marketplace;
       (III) shall avoid selecting a final offer of fees and terms 
     that would have anticompetitive effects within the issuer 
     market, the acquirer market, or the merchant market;
       (IV) may select a final offer that is a schedule of fees 
     and terms that varies based upon cost-based differences in 
     types of credit card and debit card transactions (which may 
     include whether a transaction is of a signature-based, PIN-
     based, or card-not-present type);
       (V) may select a final offer that is a schedule of fees and 
     terms that provides alternative fees and terms for those 
     acquirers or issuers that are regulated by the National 
     Credit Union Administration or that, together with affiliates 
     of the acquirer or issuer, have assets in a total amount of 
     less than $1,000,000,000; and
       (VI) may not select a final offer that is a schedule of 
     fees and terms that varies based on type of merchant or 
     volume of transactions (either in number or dollar value).

       (D) Use of existing fees and terms as evidence.--In 
     establishing fees and terms for access to a covered 
     electronic payment system under this paragraph, the 
     Electronic Payment System Judges--
       (i) shall decide the weight to be given to any evidence 
     submitted by a proceeding party regarding the fees and terms 
     for access to comparable electronic payment systems, 
     including fees and terms in voluntarily negotiated access 
     agreements filed under paragraph (1); and
       (ii) shall give significant weight to fees in a voluntarily 
     negotiated access agreement that are substantially below the 
     fees reflective of the market power of the covered electronic 
     payment systems that existed before the date of enactment of 
     this Act.

     SEC. 4. ELECTRONIC PAYMENT SYSTEM JUDGES.

       (a) Appointment.--The Attorney General and the Chairman 
     shall jointly appoint 3 full-time Electronic Payment System 
     Judges, and shall appoint 1 of the 3 Electronic Payment 
     System Judges as the Chief Electronic Payment System Judge.
       (b) Duties.--The Electronic Payment System Judges shall 
     establish fees and terms for access to covered electronic 
     payment systems in accordance with this Act.
       (c) Rulings.--The Electronic Payment System Judges may make 
     any necessary procedural or evidentiary ruling in a 
     proceeding under this Act and may, before commencing a 
     proceeding under this Act, make any procedural ruling that 
     will apply to a proceeding under this Act.
       (d) Administrative Support.--The Attorney General and 
     Chairman shall provide the Electronic Payment System Judges 
     with the necessary administrative services related to 
     proceedings under this Act.
       (e) Location.--The offices of the Electronic Payment System 
     Judges and staff shall be located in the offices of the 
     Department of Justice or the Federal Trade Commission.
       (f) Qualifications of Electronic Payment System Judges.--
     Each Electronic Payment System Judge shall be an attorney who 
     has at least 7 years of legal experience. The Chief 
     Electronic Payment System Judge shall have at least 5 years 
     of experience in adjudications, arbitrations, or court 
     trials. At least 1 Electronic Payment System Judge who is not 
     the Chief Electronic Payment System Judge shall have 
     significant knowledge of electronic payment systems. At least 
     one Electronic Payment System Judge shall have significant 
     knowledge of economics. An individual may serve as an 
     Electronic Payment System Judge only if the individual is 
     free of any financial conflict of interest under the 
     standards established under subsection (m).
       (g) Staff.--The Chief Electronic Payment System Judge shall 
     hire, at minimum, 3 full-time staff members to assist the 
     Electronic Payment System Judges in performing the duties of 
     the Electronic Payment System Judges under this Act.
       (h) Terms.--
       (1) Initial appointments.--For the first appointments of 
     Electronic Payment System Judges after the date of enactment 
     of this Act--
       (A) the Chief Electronic Payment System Judge shall be 
     appointed for a term of 6 years;
       (B) 1 Electronic Payment System Judge who is not the Chief 
     Electronic Payment System Judge shall be appointed for a term 
     of 4 years; and
       (C) 1 Electronic Payment System Judge who is not the Chief 
     Electronic Payment System Judge shall be appointed for a term 
     of 2 years.
       (2) Subsequent appointment.--After the appointments under 
     paragraph (1), an Electronic Payment System Judge shall be 
     appointed for a term of 6 years.
       (3) Reappointment.--An individual serving as an Electronic 
     Payment System Judge may be reappointed to subsequent terms.
       (4) Start and end of terms.--The term of an Electronic 
     Payment System Judge shall begin on the date on which the 
     term of the predecessor of that Electronic Payment System 
     Judge ends. If a successor Electronic Payment System Judge 
     has not been appointed as of the date on which the term of 
     office of an Electronic Payment System Judge ends, the 
     individual serving that term may continue to serve as an 
     interim Electronic Payment System Judge until a successor is 
     appointed.
       (i) Vacancies or Incapacity.--
       (1) Vacancies.--The Attorney General and the Chairman shall 
     act expeditiously to fill any vacancy in the position of 
     Electronic Payment System Judge, and may appoint an interim 
     Electronic Payment System Judge to serve until an Electronic 
     Payment System Judge is appointed to fill the vacancy under 
     this section. An Electronic Payment System Judge appointed to 
     fill a vacancy occurring before the expiration of the term 
     for which the predecessor of that individual was appointed 
     shall be appointed for the remainder of that term.
       (2) Incapacity.--If an Electronic Payment System Judge is 
     temporarily unable to perform the duties of an Electronic 
     Payment System Judge, the Attorney General and Chairman may 
     appoint an interim Electronic Payment System Judge to perform 
     such duties during the period of such incapacity.
       (j) Compensation.--
       (1) Judges.--The Chief Electronic Payment System Judge 
     shall receive compensation at the rate of basic pay payable 
     for level AL-1 for administrative law judges under section 
     5372(b) of title 5, United States Code, and each Electronic 
     Payment System Judge who is not the Chief Electronic Payment 
     System Judge shall receive compensation at the rate of basic 
     pay payable for level AL-2 for administrative law judges 
     under such section. The compensation of the Electronic 
     Payment System Judges shall not be subject to any regulations 
     adopted by the Office of Personnel Management under its 
     authority under section 5376(b)(1) of title 5, United States 
     Code.
       (2) Staff members.--Of the 3 staff members appointed under 
     subsection (g)--

[[Page 14323]]

       (A) the rate of pay of 1 staff member shall be not more 
     than the basic rate of pay payable for level 10 of GS-15 of 
     the General Schedule;
       (B) the rate of pay of 1 staff member shall be not less 
     than the basic rate of pay payable for GS-13 of the General 
     Schedule and not more than the basic rate of pay payable for 
     level 10 of GS-14 of such Schedule; and
       (C) the rate of pay of 1 staff member shall be not less 
     than the basic rate of pay payable for GS-8 of the General 
     Schedule and not more than the basic rate of pay payable for 
     level 10 of GS-11 of such Schedule.
       (3) Locality pay.--All rates of pay established under this 
     subsection shall include locality pay.
       (k) Independence of Electronic Payment System Judges.--
       (1) In making determinations.--
       (A) In general.--Except as provided in subparagraph (B), 
     the Electronic Payment System Judges--
       (i) shall have full independence in establishing fees and 
     terms for access to covered electronic payment systems and in 
     issuing any other ruling under this Act; and
       (ii) may consult with the Attorney General and the Chairman 
     on any matter other than a question of fact.
       (B) Consultation.--The Electronic Payment System Judges 
     shall consult with the Attorney General and the Chairman 
     regarding any determination or ruling that would require that 
     any act be performed by the Attorney General or the Chairman, 
     and any such determination or ruling shall not be binding 
     upon the Attorney General or the Chairman.
       (2) Performance appraisals.--
       (A) In general.--Notwithstanding any other provision of law 
     or any regulation of the Department of Justice or Federal 
     Trade Commission, and subject to subparagraph (B), the 
     Electronic Payment System Judges shall not receive 
     performance appraisals.
       (B) Relating to sanction or removal.--To the extent that 
     the Attorney General and the Chairman adopt regulations under 
     subsection (m) relating to the sanction or removal of an 
     Electronic Payment System Judge and such regulations require 
     documentation to establish the cause of such sanction or 
     removal, the Electronic Payment System Judge may receive an 
     appraisal related specifically to the cause of the sanction 
     or removal.
       (l) Inconsistent Duties Barred.--No Electronic Payment 
     System Judge may undertake duties that conflict with the 
     duties and responsibilities of an Electronic Payment System 
     Judge under this Act.
       (m) Standards of Conduct.--The Attorney General and the 
     Chairman shall adopt regulations regarding the standards of 
     conduct, including financial conflict of interest and 
     restrictions against ex parte communications, which shall 
     govern the Electronic Payment System Judges and the 
     proceedings under this Act.
       (n) Removal or Sanction.--The Attorney General and the 
     Chairman acting jointly may sanction or remove an Electronic 
     Payment System Judge for violation of the standards of 
     conduct adopted under subsection (m), misconduct, neglect of 
     duty, or any disqualifying physical or mental disability. Any 
     such sanction or removal may be made only after notice and 
     opportunity for a hearing. The Attorney General and the 
     Chairman may suspend an Electronic Payment System Judge 
     during the pendency of such a hearing. The Attorney General 
     and the Chairman shall appoint an interim Electronic Payment 
     System Judge during the period of any suspension under this 
     subsection.

     SEC. 5. PROCEEDINGS OF ELECTRONIC PAYMENT SYSTEM JUDGES.

       (a) Proceedings.--
       (1) In general.--The Electronic Payment System Judges shall 
     act in accordance with regulations issued by the Electronic 
     Payment System Judges, the Attorney General, and the 
     Chairman, and on the basis of a written record, prior 
     determinations and interpretations of the Electronic Payment 
     System Judges under this Act, and decisions of the court of 
     appeals of the United States.
       (2) Judges acting as panel and individually.--The 
     Electronic Payment System Judges shall preside over hearings 
     in proceedings under this Act en banc. The Chief Electronic 
     Payment System Judge may designate an Electronic Payment 
     System Judge to preside individually over such collateral and 
     administrative proceedings as the Chief Judge considers 
     appropriate.
       (b) Procedures.--
       (1) Commencement.--The Electronic Payment System Judges 
     shall cause to be published in the Federal Register a notice 
     of commencement of proceedings under section 3(c) to 
     establish fees and terms for access to a covered electronic 
     payment system.
       (2) Mandatory negotiation period.--
       (A) In general.--Promptly after the commencement of a 
     proceeding under section 3(c) to establish fees and terms for 
     access to a covered electronic payment system, the Electronic 
     Payment System Judges shall initiate a period for 
     negotiations for the purpose of achieving a voluntarily 
     negotiated access agreement. Nothing in this paragraph shall 
     preclude the proceeding parties or any members thereof from 
     conducting negotiations before or after the mandatory 
     negotiation period for the purpose of achieving a voluntarily 
     negotiated access agreement.
       (B) Length.--The period for negotiations initiated under 
     subparagraph (A) shall be 3 months.
       (C) Determination of need for further proceedings.--At the 
     close of the period for negotiations initiated under 
     subparagraph (A), the Electronic Payment System Judges shall 
     determine if further proceedings under this Act are 
     necessary.
       (3) Proceeding parties in further proceedings.--
       (A) In general.--In any further proceeding ordered by the 
     Electronic Payment System Judges under paragraph (2)(C), 
     there shall be only 2 proceeding parties, 1 consisting of all 
     providers of the covered electronic payment system and the 
     other consisting of all merchants that have access to or seek 
     access to the covered electronic payment system. Each 
     proceeding party shall bear its own costs. A provider of a 
     covered electronic payment system or a merchant that has 
     access to or seeks access to the covered electronic payment 
     system may choose not to participate in the proceeding as a 
     member of a proceeding party, but unless such provider or 
     merchant executes a voluntarily negotiated access agreement, 
     such provider or merchant shall be bound by the determination 
     of the Electronic Payment System Judges with regard to the 
     fees and terms for access to the covered electronic payment 
     system.
       (B) Rule of construction.--Nothing in this paragraph may be 
     construed to prohibit the proceeding parties or any members 
     thereof in a proceeding under subparagraph (A) from 
     negotiating and entering into a voluntarily negotiated access 
     agreement at any other time.
       (4) Regulations.--
       (A) Authorization.--
       (i) In general.--The Electronic Payment System Judges may 
     issue regulations to carry out the duties of the Electronic 
     Payment System Judges under this Act. All regulations issued 
     by the Electronic Payment System Judges are subject to the 
     approval of the Attorney General and the Chairman. Not later 
     than 120 days after the date on which all Electronic Payment 
     System Judges are appointed under section 4(h)(1), the 
     Electronic Payment System Judges shall issue regulations to 
     govern proceedings under this subsection. In setting these 
     regulations, the Electronic Payment System Judges shall 
     consider the regulations issued by the Copyright Royalty 
     Judges under section 803(b)(6) of title 17, United States 
     Code.
       (ii) Scope.--The regulations issued under clause (i) shall 
     include regulations regarding the procedures described in 
     subparagraph (B).
       (B) Procedures.--
       (i) Written direct statements.--The written direct 
     statements of the proceeding parties shall be filed by a date 
     specified by the Electronic Payment System Judges, which may 
     be not earlier than 4 months, and not later than 5 months, 
     after the end of the voluntary negotiation period under 
     paragraph (2). Notwithstanding the preceding sentence, the 
     Electronic Payment System Judges may allow a proceeding party 
     to file an amended written direct statement based on new 
     information received during the discovery process, not later 
     than 15 days after the end of the discovery period specified 
     in clause (ii).
       (ii) Discovery schedule.--Following the submission to the 
     Electronic Payment System Judges of written direct statements 
     by the proceeding parties, the Electronic Payment System 
     Judges shall meet with the proceeding parties to set a 
     schedule for conducting and completing discovery. Such 
     schedule shall be determined by the Electronic Payment System 
     Judges. Discovery in such proceedings shall be permitted for 
     a period of not longer than 60 days, except for discovery 
     ordered by the Electronic Payment System Judges in connection 
     with the resolution of motions, orders, and disputes pending 
     at the end of such period.
       (iii) Initial disclosures.--

       (I) In general.--In a proceeding under this Act to 
     determine fees and terms for access to a covered electronic 
     payment system, certain persons shall make initial 
     disclosures not later than 30 days after the date of 
     commencement of the proceeding, in accordance with this 
     clause.
       (II) Issuers, acquirers, and owners.--Any person who is 1 
     of the 10 largest issuers for a covered electronic payment 
     system in terms of number of cards issued, any person who is 
     1 of the 10 largest acquirers for a covered electronic 
     payment system based on dollar amount of transactions made by 
     merchants they serve, and any person who owns or controls the 
     relevant covered electronic payment system and establishes 
     the terms and conditions through which issuers and acquirers 
     participate in the covered electronic payment system, shall 
     produce to the Electronic Payment System Judges and to both 
     proceedings parties--

       (aa) an itemized list of the costs necessary to operate the 
     covered electronic payment system that were incurred by the 
     person during the most recent full calendar year before the 
     initiation of the proceeding; and
       (bb) any access agreement between that person and 1 or more 
     merchants with regard to that covered electronic payment 
     system.

       (III) Merchants.--Any person who is 1 of the 10 largest 
     merchants using the relevant

[[Page 14324]]

     covered electronic payment system, determined based on dollar 
     amount of transactions made with the covered electronic 
     payment system, shall produce to the Electronic Payment 
     System Judges and to both proceeding parties--

       (aa) an itemized list of the costs necessary to access the 
     electronic payment system during the most recent full 
     calendar year prior to the initiation of the proceeding; and
       (bb) any access agreement between that person and 1 or more 
     providers with regard to that covered electronic payment 
     system.

       (IV) Disagreement.--Any disagreement regarding whether a 
     person is required to make an initial disclosure under this 
     clause, or the contents of such a disclosure, shall be 
     resolved by the Electronic Payment System Judges.

       (iv) Depositions.--

       (I) In general.--In a proceeding under this Act to 
     determine fees and terms for access to a covered electronic 
     payment system, each proceeding party shall be permitted to 
     take depositions of every witness identified by the other 
     proceeding party. Except as provided in subclause (III), each 
     proceeding party also shall be permitted to take 5 additional 
     depositions in the entire proceeding.
       (II) Organizational entities.--A deposition notice or 
     subpoena may name as the deponent a person who is an 
     individual or a person who is not an individual. Such 
     deposition notice or subpoena shall describe with reasonable 
     particularity the matters on which examination is requested. 
     If the deposition notice or subpoena names a person who is 
     not an individual, the deponent person so named shall 
     designate 1 or more officers, directors, or managing agents, 
     or other individual persons who consent to testify on behalf 
     of the deponent person, and may set forth, for each 
     individual person designated, the matters on which the 
     individual person will testify. A subpoena shall advise a 
     nonparty deponent person of the duty of the deponent person 
     to make such a designation. An individual person designated 
     under this subclause shall testify as to matters known or 
     reasonably available to the deponent person.
       (III) Additional depositions.--The Electronic Payment 
     System Judges may increase the permitted number of 
     depositions for good cause in exceptional circumstances, and 
     shall resolve any disputes among persons within either 
     proceeding party regarding the allocation of the depositions 
     permitted under this clause.

       (v) Written discovery.--In a proceeding under this Act to 
     determine fees and terms for access to a covered electronic 
     payment system, each proceeding party shall be permitted to 
     serve written discovery requests on 10 persons. These written 
     discovery requests may include requests for production or 
     inspection, a total of no more than 10 requests for admission 
     in the entire proceeding, and a total of no more than 25 
     interrogatories in the entire proceeding. The Electronic 
     Payment System Judges may increase the permitted number of 
     requests for admission or interrogatories for good cause in 
     exceptional circumstances, and shall resolve any disputes 
     among persons within either proceeding party regarding the 
     allocation of the requests for admission or interrogatories 
     permitted under this clause.
       (vi) Subpoenas.--Upon the request of a party to a 
     proceeding to determine fees and terms for access to a 
     covered electronic payment system, the Electronic Payment 
     System Judges may issue a subpoena commanding a person to 
     appear and give testimony, or to produce and permit 
     inspection of documents or tangible things, if the resolution 
     of the proceeding by the Electronic Payment System Judges may 
     be substantially impaired by the absence of such testimony or 
     production of documents or tangible things. A subpoena under 
     this clause shall specify with reasonable particularity the 
     materials to be produced or the scope and nature of the 
     required testimony. Nothing in this clause shall preclude the 
     Electronic Payment System Judges from requesting the 
     production by a person of information or materials relevant 
     to the resolution by the Electronic Payment System Judges of 
     a material issue of fact.
       (vii) Objections to discovery requests.--

       (I) In general.--Any objection to a request or subpoena 
     under clause (v) or (vi) shall be resolved by a motion or 
     request to compel production made to the Electronic Payment 
     System Judges in accordance with regulations adopted by the 
     Electronic Payment System Judges. Each motion or request to 
     compel discovery shall be determined by the Electronic 
     Payment System Judges, or by an Electronic Payment System 
     Judge when permitted under subsection (a)(2). Upon such 
     motion or request to compel discovery, the Electronic Payment 
     System Judges may order discovery under regulations 
     established under this paragraph.
       (II) Considerations.--In determining whether discovery will 
     be granted under this clause, the Electronic Payment System 
     Judges may consider--

       (aa) whether the burden or expense of producing the 
     requested information or materials outweighs the likely 
     benefit, taking into account the needs and resources of the 
     proceeding parties, the importance of the issues at stake, 
     and the probative value of the requested information or 
     materials in resolving such issues;
       (bb) whether the requested information or materials would 
     be unreasonably cumulative or duplicative, or are obtainable 
     from another source that is more convenient, less burdensome, 
     or less expensive; and
       (cc) whether the proceeding party seeking discovery has had 
     ample opportunity by discovery in the proceeding or by other 
     means to obtain the information sought.
       (viii) Voluntarily negotiated access agreements.--In 
     proceedings to determine fees and terms for access to a 
     covered electronic payment system, the Electronic Payment 
     System Judges shall make available to the proceeding parties 
     all documents filed under section 3(c)(1).
       (ix) Settlement conference.--The Electronic Payment System 
     Judges shall order a settlement conference between the 
     proceeding parties to facilitate the presentation of offers 
     of settlement between the parties. The settlement conference 
     shall be held during the 21-day period beginning on the date 
     on which the discovery period ends and shall take place 
     outside the presence of the Electronic Payment System Judges.
       (x) Direct and rebuttal hearings.--At the conclusion of the 
     21-day period described in clause (ix), the Electronic 
     Payment System Judges shall determine if further proceedings 
     under this Act are necessary. If the Electronic Payment 
     System Judges determine further proceedings under this Act 
     are necessary, the Electronic Payment System Judges shall 
     schedule a direct hearing of not more than 30 court days and 
     a rebuttal hearing of not more than 20 court days during 
     which both proceeding parties will be allowed to offer 
     witness testimony and documents.
       (xi) Sponsoring witnesses.--No evidence, including 
     exhibits, may be submitted in the written direct statement or 
     written rebuttal statement of a proceeding party without a 
     sponsoring witness, except for--

       (I) requests for admission that have been admitted by the 
     receiving proceeding party;
       (II) evidence of which the Electronic Payment System Judges 
     have taken official notice;
       (III) incorporation by reference of past records; or
       (IV) good cause shown.

       (xii) Hearsay.--Hearsay may be admitted in proceedings 
     under this Act to the extent determined relevant and reliable 
     by the Electronic Payment System Judges.
       (xiii) Applicability of the federal rules of evidence.--To 
     the extent not inconsistent with this subparagraph, the 
     Federal Rules of Evidence shall apply to proceedings under 
     this Act.
       (5) Penalties for failure to comply with a discovery 
     request.--
       (A) Failure to comply.--A person has failed to comply with 
     a discovery request if the person, or an employee or agent of 
     the person, fails, without substantial justification, to--
       (i) make initial disclosures required under paragraph 
     (4)(B)(iii);
       (ii) be sworn or answer a question as a deponent after 
     being directed to do so by the Electronic Payment System 
     Judges under clause (iv) or (vi) of paragraph (4)(B);
       (iii) answer an interrogatory submitted under paragraph 
     (4)(B)(v);
       (iv) produce nonprivileged documents requested under clause 
     (v) or (vi) of paragraph (4)(B); or
       (v) admit the genuineness of any document or the truth of 
     any matter as requested under paragraph (4)(B)(v), and the 
     person requesting the admissions thereafter proves the 
     genuineness of the document or the truth of the matter.
       (B) False or misleading responses.--For purposes of this 
     Act, any disclosure, answer, or response that is false or 
     substantially misleading, evasive, or incomplete shall be 
     deemed a failure to comply with a discovery request.
       (C) Negative inference in current proceeding.--If any 
     person fails to comply with a discovery request, the 
     Electronic Payment System Judges may issue an order that the 
     matters regarding which the order was made or any other 
     designated facts shall be taken to be established for the 
     purposes of the current proceeding in accordance with the 
     claim of the proceeding party seeking discovery and obtaining 
     the order.
       (D) Civil penalty.--
       (i) Generally.--Any person who fails to comply with a 
     discovery request under this Act shall be subject to a civil 
     penalty, which shall be assessed by the Electronic Payment 
     System Judges, of not more than $25,000 for each violation. 
     Each day of violation shall constitute a separate violation.
       (ii) Notice and hearings.--No civil penalty may be assessed 
     under this subparagraph except under an order of the 
     Electronic Payment System Judges and unless the person 
     accused of the violation was given prior notice and 
     opportunity to request and participate in a hearing before 
     the Electronic Payment System Judges with respect to the 
     violation.
       (iii) Determining amount.--In determining the amount of any 
     penalty assessed under this subparagraph, the Electronic 
     Payment System Judges shall take into account the nature, 
     circumstances, extent, and gravity of

[[Page 14325]]

     the violation or violations and, with respect to the 
     violator, ability to pay, any prior history of such 
     violations, the degree of culpability, economic benefit or 
     savings (if any) resulting from the violation, and such other 
     matters as justice may require.
       (iv) Review.--Any person who requested a hearing with 
     respect to a civil penalty under this subparagraph and who is 
     aggrieved by an order assessing the civil penalty may file a 
     petition for judicial review of such order with the United 
     States Court of Appeals for the District of Columbia Circuit. 
     Such a petition may be filed not later than 30 days after the 
     date on which the order making such assessment was issued. 
     The United States Court of Appeals for the District of 
     Columbia Circuit shall have jurisdiction to enter a judgment 
     affirming, modifying, or setting aside in whole or in part, 
     an order of the Electronic Payment System Judges under this 
     subparagraph, or the court may remand the proceeding to the 
     Electronic Payment System Judges for such further action as 
     the court may direct. The Attorney General shall represent 
     the Electronic Payment System Judges before the court.
       (v) Enforcement.--If any person fails to pay an assessment 
     of a civil penalty after the civil penalty has become a final 
     and unappealable order or after the appropriate court has 
     entered final judgment, the Electronic Payment System Judges 
     shall request the Attorney General to institute a civil 
     action in an appropriate district court of the United States 
     to collect the penalty, and such court shall have 
     jurisdiction to hear and decide any such action. In hearing 
     such action, the court shall have authority to review the 
     violation and the assessment of the civil penalty on the 
     record.
       (c) Determination of Electronic Payment System Judges.--
       (1) Timing.--The Electronic Payment System Judges shall 
     issue a determination in a proceeding not later than the 
     earlier of--
       (A) 11 months after the end of the 21-day settlement 
     conference period under subsection (b)(4)(B)(ix); or
       (B) 15 days before the date on which the fees and terms in 
     effect for the relevant covered electronic payment system 
     expire.
       (2) Determination.--
       (A) Filing of final offer.--Before the commencement of a 
     direct hearing in a proceeding under subsection (b)(4)(B)(x), 
     each proceeding party shall file with the Electronic Payment 
     System Judges and with the other proceeding party a final 
     offer of fees and terms for access to the covered electronic 
     payment system. A proceeding party may not amend a final 
     offer submitted under this subparagraph, except with the 
     express consent of the Electronic Payment System Judges and 
     the other proceeding party.
       (B) Selection between final offers.--After the conclusion 
     of the direct hearing and rebuttal hearing, the Electronic 
     Payment System Judges shall make their determination by 
     selecting 1 of the 2 final offers filed by the proceeding 
     parties. The Electronic Payment System Judges shall make 
     their selection in accordance with the standards described in 
     section 3(c)(3)(C).
       (C) Voting and dissenting opinions.--A final determination 
     of the Electronic Payment System Judges in a proceeding under 
     this Act shall be made by majority vote. An Electronic 
     Payment System Judge dissenting from the majority on any 
     determination under this Act may issue a dissenting opinion, 
     which shall be included with the determination.
       (3) Rehearings.--
       (A) In general.--The Electronic Payment System Judges may, 
     in exceptional cases, upon motion of a proceeding party, 
     order a rehearing, after the determination in the proceeding 
     is issued under paragraph (2), on such matters as the 
     Electronic Payment System Judges determine to be appropriate.
       (B) Timing for filing motion.--Any motion for a rehearing 
     under subparagraph (A) shall be filed not later than 15 days 
     after the date on which the Electronic Payment System Judges 
     deliver to the parties in the proceeding their initial 
     determination concerning fees and terms.
       (C) Participation by opposing party not required.--In any 
     case in which a rehearing is ordered under this paragraph, 
     any opposing proceeding party shall not be required to 
     participate in the rehearing, except that nonparticipation 
     may give rise to the limitations with respect to judicial 
     review provided for in subsection (d)(1).
       (D) No negative inference.--The Electronic Payment System 
     Judges may not draw a negative inference from lack of 
     participation in a rehearing.
       (E) Continuity of fees and terms.--
       (i) In general.--If the decision of the Electronic Payment 
     System Judges on any motion for a rehearing is not rendered 
     before the expiration of the fees and terms in effect for the 
     relevant covered electronic payment system, in the case of a 
     proceeding to determine successor fees and terms for fees and 
     terms that expire on a specified date, the initial 
     determination of the Electronic Payment System Judges that is 
     the subject of the rehearing motion shall be effective as of 
     the day following the date on which the fees and terms that 
     were previously in effect expire.
       (ii) Fee payments.--The pendency of a motion for a 
     rehearing under this paragraph shall not relieve a person 
     obligated to make fee payments for access to a covered 
     electronic payment system who would be affected by the 
     determination on that motion from paying the fees required 
     and complying with the terms under the relevant 
     determination.
       (iii) Overpayments and underpayments.--Notwithstanding 
     clause (ii), if fees described in clause (ii) are paid--

       (I) the recipient of such fees shall, not later than 60 
     days after the date on which the motion for rehearing is 
     resolved or, if the motion is granted, 60 days after the date 
     on which the rehearing is concluded, return any excess fees 
     described in clause (ii), to the extent necessary to comply 
     with the final determination by the Electronic Payment System 
     Judges of fees and terms for access to the covered electronic 
     payment system; and
       (II) a person obligated to make fee payments shall, not 
     later than 60 days after the date on which the motion for 
     rehearing is resolved or, if the motion is granted, 60 days 
     after the date on which the rehearing is concluded, pay the 
     recipient the amount of any underpayment of fees described in 
     clause (ii), to the extent necessary to comply with the final 
     determination by the Electronic Payment System Judges of fees 
     and terms for access to the covered electronic payment 
     system.

       (4) Contents of determination.--A determination of the 
     Electronic Payment System Judges shall establish the fees and 
     terms for access to the relevant covered electronic payment 
     system, shall be supported by the written record, and shall 
     set forth the findings of fact relied on by the Electronic 
     Payment System Judges. The Electronic Payment System Judges 
     shall make publicly available in their entirety all 
     determinations issued under this paragraph.
       (5) Continuing jurisdiction.--The Electronic Payment System 
     Judges may, with the approval of the Attorney General and the 
     Chairman, issue an amendment to a written determination to 
     correct any technical or clerical errors in the determination 
     in response to unforeseen circumstances that would frustrate 
     the proper implementation of such determination. Such 
     amendment shall be set forth in a written addendum to the 
     determination that shall be distributed to the proceeding 
     parties and shall be published in the Federal Register.
       (6) Protective order.--The Electronic Payment System Judges 
     may issue such orders as may be appropriate to protect 
     confidential information, including orders excluding 
     confidential information from the record of the determination 
     that is published or made available to the public, except 
     that any fees and terms of an access agreement, including 
     voluntarily negotiated access agreements filed under section 
     3(c)(1), may not be excluded from publication.
       (7) Publication of determination.--Not later than 60 days 
     after the date on which the Electronic Payment System Judges 
     issue a determination under this subsection, the Attorney 
     General and the Chairman shall cause the determination, and 
     any corrections thereto, to be published in the Federal 
     Register. The Electronic Payment System Judges also shall 
     publicize the determination and any corrections in such other 
     manner as the Attorney General and the Chairman consider 
     appropriate, including publication on the Internet. The 
     Electronic Payment System Judges also shall make the 
     determination, corrections, and the accompanying record 
     available for public inspection and copying.
       (8) Late payment.--A determination of Electronic Payment 
     System Judges--
       (A) may include terms with respect to late payment; and
       (B) may not include any provision in such terms described 
     in subparagraph (A) that prevents a provider of a covered 
     electronic payment system from asserting other rights or 
     remedies provided under this Act.
       (d) Judicial Review.--
       (1) Appeal.--Any determination of the Electronic Payment 
     System Judges under subsection (c) may, not later than 30 
     days after the date of publication of the determination in 
     the Federal Register, be appealed, to the United States Court 
     of Appeals for the District of Columbia Circuit, by any 
     aggrieved member of a proceeding party under this Act who 
     would be bound by the determination. Any proceeding party 
     that did not participate in a rehearing may not raise any 
     issue that was the subject of that rehearing at any stage of 
     judicial review of the hearing determination. If no appeal is 
     brought within the 30-day period under this paragraph, the 
     determination of the Electronic Payment System Judges shall 
     be final, and shall take effect as described in paragraph 
     (2).
       (2) Effect of fees and terms.--
       (A) Fee payments.--The pendency of an appeal under this 
     subsection shall not relieve a person obligated to make fee 
     payments for access to a covered electronic payment system 
     who would be affected by the determination on appeal from 
     paying the fees required and complying with the terms under 
     the relevant determination or regulations.
       (B) Overpayments and underpayments.--Notwithstanding 
     subparagraph (A), if fees described in subparagraph (A) are 
     paid--

[[Page 14326]]

       (i) the recipient of such fees shall, not later than 60 
     days after the date on which the appeal is resolved return 
     any excess fees described in subparagraph (A) (and interest 
     thereon, if ordered under paragraph (3)), to the extent 
     necessary to comply with the final determination of fees and 
     terms on appeal; and
       (ii) a person obligated to make fee payments shall, not 
     later than 60 days after the date on which the appeal is 
     resolved, pay the recipient the amount of any underpayment of 
     fees described in subparagraph (A) (and interest thereon, if 
     ordered under paragraph (3)), to the extent necessary to 
     comply with the final determination of fees and terms on 
     appeal.
       (3) Jurisdiction of court.--If the United States Court of 
     Appeals for the District of Columbia Circuit, under section 
     706 of title 5, United States Code, modifies or vacates a 
     determination of the Electronic Payment System Judges, the 
     court may enter its own determination with respect to the 
     amount or distribution of fees and costs, and order the 
     repayment of any excess fees, the payment of any underpaid 
     fees, and the payment of interest pertaining respectively 
     thereto, in accordance with its final judgment. The court 
     also may vacate the determination of the Electronic Payment 
     System Judges and remand the case to the Electronic Payment 
     System Judges for further proceedings.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this Act.

     SEC. 6. INSTITUTION OF PROCEEDINGS BEFORE ELECTRONIC PAYMENT 
                   SYSTEM JUDGES.

       (a) Initial Proceedings.--
       (1) Timing.--Proceedings under this Act shall be commenced 
     as soon as practicable after the date of enactment of this 
     Act to establish fees and terms for access to covered 
     electronic payment systems under section 3(c), which shall be 
     effective during the period beginning on January 1, 2011, and 
     ending on December 31, 2012. The Electronic Payment System 
     Judges shall cause notice of commencement of such proceedings 
     to be published in the Federal Register.
       (2) Procedures specific to the initial proceedings.--
       (A) Discovery period.--Notwithstanding section 
     5(b)(4)(B)(ii), discovery in the initial proceedings 
     described in paragraph (1) shall be permitted for a period of 
     90 days, except for discovery ordered by the Electronic 
     Payment System Judges in connection with the resolution of 
     motions, orders, and disputes pending at the end of such 
     period.
       (B) Consideration of changes in fees and terms between date 
     of enactment and initial determination.--In establishing the 
     fees and terms under section 3(c) for access to covered 
     electronic payment systems, to be effective during the period 
     beginning on January 1, 2011, and ending on December 31, 
     2012, the Electronic Payment System Judges shall consider 
     changes in fees and terms made by a covered electronic 
     payments system between the date of enactment of this Act and 
     such initial determination. Based upon such consideration, 
     the Electronic Payment System Judges may adjust the fees 
     established for the period beginning on January 1, 2011, and 
     ending on December 31, 2012, to reflect the economic impact 
     such changes had on the parties.
       (b) Subsequent Proceedings.--After completion of the 
     proceedings required under subsection (a), proceedings under 
     section 3(c) to establish fees and terms for access to 
     covered electronic payment systems shall be commenced in 
     2011, and every 3 years thereafter.

     SEC. 7. GENERAL RULE FOR VOLUNTARILY NEGOTIATED ACCESS 
                   AGREEMENTS.

       (a) In General.--Any fees or terms described in subsection 
     (b) shall remain in effect for such period of time as would 
     otherwise apply to fees and terms established under this Act, 
     except that the Electronic Payment System Judges shall adjust 
     any such fees to reflect inflation during any additional 
     period the fees remain in effect beyond that contemplated in 
     the voluntarily negotiated access agreement.
       (b) Fees and Terms.--The fees or terms described in this 
     subsection are fees or terms for access to a covered 
     electronic payment system under this Act that--
       (1) are agreed upon as part of a voluntarily negotiated 
     access agreement for a period shorter than would otherwise 
     apply under a determination under this Act; and
       (2) are adopted by the Electronic Payment System Judges as 
     part of a determination under this Act.
                                 ______
                                 
      By Mr. BAUCUS (for himself and Mr. Conrad):
  S. 1213. A bill to amend title XI of the Social Security Act to 
provide for the conduct of comparative effectiveness research and to 
amend the Internal Revenue Code of 1986 to establish a Patient-Centered 
Outcomes Research Trust Fund, and for other purposes; to the Committee 
on Finance.
  Mr. BAUCUS. Mr. President, last year, America spent $2.4 trillion on 
health care. That is 1/6 of our economy. Yet we ranked last among major 
industrialized nations in the Commonwealth Fund's National Scorecard on 
Health System Performance, which ranks the number of deaths that could 
be prevented before age 75 through effective health care.
  Some analysts estimate that as much as 30 percent of our spending is 
for ineffective, redundant, or inappropriate care. That's care that 
does nothing to improve the health of Americans.
  Our system also leaves nearly 50 million Americans without health 
coverage and 25 million more with inadequate coverage. Most 
bankruptcies and foreclosures in America are related to medical costs.
  Our system needs reform.
  Today, along with Senator Conrad, the Chairman of the Budget 
Committee, I am proud to introduce a bill that would improve health 
care in America by helping doctors and patients to make better, more-
informed health care decisions.
  This legislation would increase the chances that Americans receive 
the right care. This bill would provide for research that can help 
physicians and patients know more about what works best in medicine, 
and what does not.
  Some patients, receive medical treatments that work well. Some 
patients receive treatments that do not. In many cases, doctors simply 
don't have enough reliable evidence to decide which treatments are best 
for which patients.
  Rapid innovation and advancements in medicine have led to an ever-
changing array of new and sometimes expensive technologies. The age of 
personalized medicine and genetic engineering will provide even more 
choices for patients and their physicians. Indeed, both patients and 
physicians can face great difficulty in choosing among treatment 
options.
  Patients and physicians need more credible information about how 
treatments for a specific condition compare to each other. Today, the 
vast majority of medical information shows how treatments work compared 
to placebos. Most medical information does not show how treatments work 
compared to each other.
  For example, men with prostate cancer have a choice among 3 common 
treatments surgery, radiation, and chemotherapy. Each approach yields 
different outcomes in terms of survival, ability to return to work, and 
other measures of quality of life.
  Comparative effectiveness research would compare each approach in a 
systematic way. That way, doctors and patients would have more 
information about how options work, and for whom. The bill that I 
introduce today would do just that.
  This bill would facilitate comparisons across a broad spectrum of 
health care interventions and health care strategies that are used to 
prevent, treat, diagnose and manage health conditions. By evaluating 
and comparing what works best, patients and providers can make more 
informed decisions about care.
  More specifically, this bill would create a nonprofit institute that 
would be responsible for setting national health care research 
priorities. The institute, called the Patient-Centered Outcomes 
Research Institute, would be a private entity. It would be governed by 
a multi-stakeholder, public-private sector Board of Governors. It would 
not be an agency of the Federal Government.
  Keeping the Institute a private, nonprofit entity would shelter it 
from potential political influence from both the executive and 
legislative branches of Government. The independence and expertise of 
the Institute would result in more credible and more useful research 
for Americans.
  The Institute would set national priorities for comparative 
effectiveness research and facilitate studies that would help to answer 
the most pressing questions about what works, and what doesn't.
  The Institute would have the authority to contract with experienced 
Federal agencies--such as the National Institutes of Health and the 
Agency for Health Care Research and Quality, or with private 
researchers--to carry out the actual research. The Institute would also 
be responsible for disseminating the findings of the research in

[[Page 14327]]

ways that make sense to both patients and providers.
  The Institute's work would not happen behind closed doors. The bill 
would provide opportunities for public input and scientific review of 
the integrity of the research being conducted. The Institute's meetings 
would be accessible to the public, and open forums would help to 
solicit and obtain input on the Institute's activities and agenda. 
Also, public comment periods would be made available to discuss 
research findings.
  The Institute's work would benefit all Americans who receive health 
care. So both public and private payers would fund the Institute. After 
an initial investment from general revenues, the Institute would be 
funded by an all-payer system, drawing from both public and private 
sources.
  Comparative effectiveness research would not be the ultimate decision 
maker. Instead, it would provide an additional tool to improve health 
quality. The Institute would be a health care resource, a scientific 
entity, a source of knowledge, and a provider of information.
  According to the Institute of Medicine, this research would provide 
better evidence--objective information--so that doctors and patients 
could make better decisions.
  If we are truly to reform our health care system, then we must get 
more evidence into the hands of the people making medical decisions. 
This research is not only about reducing health care costs. It is 
focused on addressing significant gaps in knowledge.
  It is not just the academics and economists who agree. Patient 
advocates like the National Breast Cancer Coalition, provider groups 
like the American Medical Association, and consumer groups like AARP 
can see the benefits of this research quite clearly. They have all 
extended their support.
  The American Recovery and Reinvestment Act made a significant 
investment towards this type of research. But that was just a first 
step. We must ensure that this research will be sustained in the years 
to come.
  From cars to toasters, Americans are able to readily view and 
evaluate information about the quality and effectiveness of so many of 
the items that they buy. It seems only logical that they should have 
information on what works and what does not when it comes to their 
health, especially with one in every 6 of this country's dollars leing 
spent on health care.
  It is time for Americans and their doctors to be wield the world's 
most advanced science, so that the most personal health care decisions, 
like so many of the other decisions we make, are made with access to 
the best available information.
  I urge my colleagues to support this common-sense measure.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1213

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patient-Centered Outcomes 
     Research Act of 2009''.

     SEC. 2. COMPARATIVE EFFECTIVENESS RESEARCH.

       (a) In General.--Title XI of the Social Security Act (42 
     U.S.C. 1301 et seq.) is amended by adding at the end the 
     following new part:

              ``Part D--Comparative Effectiveness Research


                  ``comparative effectiveness research

       ``Sec. 1181.  (a) Definitions.--In this section:
       ``(1) Board.--The term `Board' means the Board of Governors 
     established under subsection (f).
       ``(2) Comparative clinical effectiveness research.--
       ``(A) In general.--The term `comparative clinical 
     effectiveness research' means research evaluating and 
     comparing the clinical effectiveness, risks, and benefits of 
     2 or more medical treatments, services, and items described 
     in subparagraph (B).
       ``(B) Medical treatments, services, and items described.--
     The medical treatments, services, and items described in this 
     subparagraph are health care interventions, protocols for 
     treatment, care management, and delivery, procedures, medical 
     devices, diagnostic tools, pharmaceuticals (including drugs 
     and biologicals), and any other strategies or items being 
     used in the treatment, management, and diagnosis of, or 
     prevention of illness or injury in, patients.
       ``(3) Comparative effectiveness research.--The term 
     `comparative effectiveness research' means research 
     evaluating and comparing the implications and outcomes of 2 
     or more health care strategies to address a particular 
     medical condition for specific patient populations.
       ``(4) Conflicts of interest.--The term `conflicts of 
     interest' means associations, including financial and 
     personal, that may be reasonably assumed to have the 
     potential to bias an individual's decisions in matters 
     related to the Institute or the conduct of activities under 
     this section.
       ``(5) Institute.--The term `Institute' means the `Patient-
     Centered Outcomes Research Institute' established under 
     subsection (b)(1).
       ``(b) Patient-Centered Outcomes Research Institute.--
       ``(1) Establishment.--There is authorized to be established 
     a nonprofit corporation, to be known as the ``Patient-
     Centered Outcomes Research Institute'' which is neither an 
     agency nor establishment of the United States Government.
       ``(2) Application of provisions.--The Institute shall be 
     subject to the provisions of this section, and, to the extent 
     consistent with this section, to the District of Columbia 
     Nonprofit Corporation Act.
       ``(3) Funding of comparative effectiveness research.--For 
     fiscal year 2010 and each subsequent fiscal year, amounts in 
     the Patient-Centered Outcomes Research Trust Fund (referred 
     to in this section as the `PCORTF') under section 9511 of the 
     Internal Revenue Code of 1986 shall be available, without 
     further appropriation, to the Institute to carry out this 
     section.
       ``(c) Purpose.--The purpose of the Institute is to assist 
     patients, clinicians, purchasers, and policy makers in making 
     informed health decisions by advancing the quality and 
     relevance of evidence concerning the manner in which 
     diseases, disorders, and other health conditions can 
     effectively and appropriately be prevented, diagnosed, 
     treated, monitored, and managed through research and evidence 
     synthesis that considers variations in patient 
     subpopulations, and the dissemination of research findings 
     with respect to the relative clinical outcomes, clinical 
     effectiveness, and appropriateness of the medical treatments, 
     services, and items described in subsection (a)(2)(B).
       ``(d) Duties.--
       ``(1) Identifying research priorities and establishing 
     research project agenda.--
       ``(A) Identifying research priorities.--The Institute shall 
     identify national priorities for comparative clinical 
     effectiveness research, taking into account factors, 
     including--
       ``(i) disease incidence, prevalence, and burden in the 
     United States;
       ``(ii) evidence gaps in terms of clinical outcomes;
       ``(iii) practice variations, including variations in 
     delivery and outcomes by geography, treatment site, provider 
     type, and patient subgroup;
       ``(iv) the potential for new evidence concerning certain 
     categories of health care services or treatments to improve 
     patient health and well-being, and the quality of care;
       ``(v) the effect or potential for an effect on health 
     expenditures associated with a health condition or the use of 
     a particular medical treatment, service, or item;
       ``(vi) the effect or potential for an effect on patient 
     needs, outcomes, and preferences, including quality of life; 
     and
       ``(vii) the relevance to assisting patients and clinicians 
     in making informed health decisions.
       ``(B) Establishing research project agenda.--
       ``(i) In general.--The Institute shall establish and update 
     a research project agenda for comparative clinical 
     effectiveness research to address the priorities identified 
     under subparagraph (A), taking into consideration the types 
     of such research that might address each priority and the 
     relative value (determined based on the cost of conducting 
     such research compared to the potential usefulness of the 
     information produced by such research) associated with the 
     different types of research, and such other factors as the 
     Institute determines appropriate.
       ``(ii) Consideration of need to conduct a systematic 
     review.--In establishing and updating the research project 
     agenda under clause (i), the Institute shall consider the 
     need to conduct a systematic review of existing research 
     before providing for the conduct of new research under 
     paragraph (2)(A).
       ``(2) Carrying out research project agenda.--
       ``(A) Comparative clinical effectiveness research.--In 
     carrying out the research project agenda established under 
     paragraph (1)(B), the Institute shall provide for the conduct 
     of appropriate research and the synthesis of evidence, in 
     accordance with the methodological standards adopted under 
     paragraph (10), using methods, including the following:
       ``(i) Systematic reviews and assessments of existing 
     research and evidence.

[[Page 14328]]

       ``(ii) Primary research, such as randomized clinical 
     trials, molecularly informed trials, and observational 
     studies.
       ``(iii) Any other methodologies recommended by the 
     methodology committee established under paragraph (7) that 
     are adopted by the Board under paragraph (10).
       ``(B) Contracts for the management and conduct of 
     research.--
       ``(i) In general.--The Institute may enter into contracts 
     for the management and conduct of research in accordance with 
     the research project agenda established under paragraph 
     (1)(B) with the following:

       ``(I) Agencies and instrumentalities of the Federal 
     Government that have experience in conducting comparative 
     clinical effectiveness research, such as the Agency for 
     Healthcare Research and Quality, to the extent that such 
     contracts are authorized under the governing statutes of such 
     agencies and instrumentalities.
       ``(II) Appropriate private sector research or study-
     conducting entities that have demonstrated the experience and 
     capacity to achieve the goals of comparative effectiveness 
     research.

       ``(ii) Conditions for contracts.--A contract entered into 
     under this subparagraph shall require that the agency, 
     instrumentality, or other entity--

       ``(I) abide by the transparency and conflicts of interest 
     requirements that apply to the Institute with respect to the 
     research managed or conducted under such contract;
       ``(II) comply with the methodological standards adopted 
     under paragraph (10) with respect to such research;
       ``(III) take into consideration public comments on the 
     study design that are transmitted by the Institute to the 
     agency, instrumentality, or other entity under subsection 
     (i)(1)(B) during the finalization of the study design and 
     transmit responses to such comments to the Institute, which 
     will publish such comments, responses, and finalized study 
     design in accordance with subsection (i)(3)(A)(iii) prior to 
     the conduct of such research; and
       ``(IV) in the case where the agency, instrumentality, or 
     other entity is managing or conducting a comparative 
     effectiveness research study for a rare disease, consult with 
     the expert advisory panel for rare disease appointed under 
     paragraph (5)(A)(iii) with respect to such research study.

       ``(iii) Coverage of copayments or coinsurance.--A contract 
     entered into under this subparagraph may allow for the 
     coverage of copayments or co-insurance, or allow for other 
     appropriate measures, to the extent that such coverage or 
     other measures are necessary to preserve the validity of a 
     research project, such as in the case where the research 
     project must be blinded.
       ``(C) Review and update of evidence.--The Institute shall 
     review and update evidence on a periodic basis, in order to 
     take into account new research, evolving evidence, advances 
     in medical technology, and changes in the standard of care as 
     they become available, as appropriate.
       ``(D) Taking into account potential differences.--Research 
     shall--
       ``(i) be designed, as appropriate, to take into account the 
     potential for differences in the effectiveness of health care 
     treatments, services, and items as used with various 
     subpopulations, such as racial and ethnic minorities, women, 
     age, and groups of individuals with different comorbidities, 
     genetic and molecular sub-types, or quality of life 
     preferences; and
       ``(ii) include members of such subpopulations as subjects 
     in the research as feasible and appropriate.
       ``(E) Differences in treatment modalities.--Research shall 
     be designed, as appropriate, to take into account different 
     characteristics of treatment modalities that may affect 
     research outcomes, such as the phase of the treatment 
     modality in the innovation cycle and the impact of the skill 
     of the operator of the treatment modality.
       ``(3) Study and report on feasibility of conducting 
     research in-house.--
       ``(A) Study.--The Institute shall conduct a study on the 
     feasibility of conducting research in-house.
       ``(B) Report.--Not later than 5 years after the date of 
     enactment of this section, the Institute shall submit a 
     report to Congress containing the results of the study 
     conducted under subparagraph (A).
       ``(4) Data collection.--
       ``(A) In general.--The Secretary shall, with appropriate 
     safeguards for privacy, make available to the Institute such 
     data collected by the Centers for Medicare & Medicaid 
     Services under the programs under titles XVIII, XIX, and XXI 
     as the Institute may require to carry out this section. The 
     Institute may also request and, if such request is granted, 
     obtain data from Federal, State, or private entities, 
     including data from clinical databases and registries.
       ``(B) Use of data.--The Institute shall only use data 
     provided to the Institute under subparagraph (A) in 
     accordance with laws and regulations governing the release 
     and use of such data, including applicable confidentiality 
     and privacy standards.
       ``(5) Appointing expert advisory panels.--
       ``(A) Appointment.--
       ``(i) In general.--The Institute shall, as appropriate, 
     appoint expert advisory panels to assist in identifying 
     research priorities and establishing the research project 
     agenda under paragraph (1). Panels shall advise the Institute 
     in matters such as identifying gaps in and updating medical 
     evidence in order to ensure that the information produced 
     from such research is clinically relevant to decisions made 
     by clinicians and patients at the point of care.
       ``(ii) Expert advisory panels for primary research.--The 
     Institute shall appoint expert advisory panels in carrying 
     out the research project agenda under paragraph (2)(A)(ii). 
     Such expert advisory panels shall, upon request, advise the 
     Institute and the agency, instrumentality, or entity 
     conducting the research on the research question involved and 
     the research design or protocol, including the appropriate 
     comparator technologies, important patient subgroups, and 
     other parameters of the research, as necessary. Upon the 
     request of such agency, instrumentality, or entity, such 
     panels shall be available as a resource for technical 
     questions that may arise during the conduct of such research.
       ``(iii) Expert advisory panel for rare disease.--In the 
     case of a comparative effectiveness research study for rare 
     disease, the Institute shall appoint an expert advisory panel 
     for purposes of assisting in the design of such research 
     study and determining the relative value and feasibility of 
     conducting such research study.
       ``(B) Composition.--
       ``(i) In general.--An expert advisory panel appointed under 
     subparagraph (A) shall include individuals who have 
     experience in the relevant topic, project, or category for 
     which the panel is established, including--

       ``(I) practicing and research clinicians (including 
     relevant specialists and subspecialists), patients, and 
     representatives of patients; and
       ``(II) experts in scientific and health services research, 
     health services delivery, and evidence-based medicine.

       ``(ii) Inclusion of representatives of manufacturers of 
     medical technology.--An expert advisory panel appointed under 
     subparagraph (A) may include a representative of each 
     manufacturer of each medical technology that is included 
     under the relevant topic, project, or category for which the 
     panel is established.
       ``(6) Supporting patient and consumer representatives.--The 
     Institute shall provide support and resources to help patient 
     and consumer representatives on the Board and expert advisory 
     panels appointed by the Institute under paragraph (5) to 
     effectively participate in technical discussions regarding 
     complex research topics. Such support shall include initial 
     and continuing education to facilitate effective engagement 
     in activities undertaken by the Institute and may include 
     regular and ongoing opportunities for patient and consumer 
     representatives to interact with each other and to exchange 
     information and support regarding their involvement in the 
     Institute's activities. The Institute shall provide per diem 
     and other appropriate compensation to patient and consumer 
     representatives for their time spent participating in the 
     activities of the Institute under this paragraph.
       ``(7) Establishing methodology committee.--
       ``(A) In general.--The Institute shall establish a standing 
     methodology committee to carry out the functions described in 
     subparagraph (C).
       ``(B) Appointment and composition.--The methodology 
     committee established under subparagraph (A) shall be 
     composed of not more than 17 members appointed by the 
     Comptroller General of the United States. Members appointed 
     to the methodology committee shall be experts in their 
     scientific field, such as health services research, clinical 
     research, comparative effectiveness research, biostatistics, 
     genomics, and research methodologies. Stakeholders with such 
     expertise may be appointed to the methodology committee.
       ``(C) Functions.--Subject to subparagraph (D), the 
     methodology committee shall work to develop and improve the 
     science and methods of comparative effectiveness research by 
     undertaking, directly or through subcontract, the following 
     activities:
       ``(i) Not later than 2 years after the date on which the 
     members of the methodology committee are appointed under 
     subparagraph (B), developing and periodically updating the 
     following:

       ``(I) Establish and maintain methodological standards for 
     comparative clinical effectiveness research on major 
     categories of interventions to prevent, diagnose, or treat a 
     clinical condition or improve the delivery of care. Such 
     methodological standards shall provide specific criteria for 
     internal validity, generalizability, feasibility, and 
     timeliness of such research and for clinical outcomes 
     measures, risk adjustment, and other relevant aspects of 
     research and assessment with respect to the design of such 
     research. Any methodological standards developed and updated 
     under this subclause shall be scientifically based and 
     include methods by which new information, data, or advances 
     in technology are considered and incorporated

[[Page 14329]]

     into ongoing research projects by the Institute, as 
     appropriate. The process for developing and updating such 
     standards shall include input from relevant experts, 
     stakeholders, and decision makers, and shall provide 
     opportunities for public comment. Such standards shall also 
     include methods by which patient subpopulations can be 
     accounted for and evaluated in different types of research. 
     As appropriate, such standards shall build on existing work 
     on methodological standards for defined categories of health 
     interventions and for each of the major categories of 
     comparative effectiveness research methods (determined as of 
     the date of enactment of the Patient-Centered Outcomes 
     Research Act of 2009).
       ``(II) A translation table that is designed to provide 
     guidance and act as a reference for the Board to determine 
     research methods that are most likely to address each 
     specific comparative clinical effectiveness research 
     question.

       ``(ii) Not later than 3 years after such date, examining 
     the following:

       ``(I) Methods by which various aspects of the health care 
     delivery system (such as benefit design and performance, and 
     health services organization, management, information 
     communication, and delivery) could be assessed and compared 
     for their relative effectiveness, benefits, risks, 
     advantages, and disadvantages in a scientifically valid and 
     standardized way.
       ``(II) Methods by which efficiency and value (including the 
     full range of harms and benefits, such as quality of life) 
     could be assessed in a scientifically valid and standardized 
     way.

       ``(D) Consultation and conduct of examinations.--
       ``(i) In general.--Subject to clause (iii), in undertaking 
     the activities described in subparagraph (C), the methodology 
     committee shall--

       ``(I) consult or contract with 1 or more of the entities 
     described in clause (ii); and
       ``(II) consult with stakeholders and other entities 
     knowledgeable in relevant fields, as appropriate.

       ``(ii) Entities described.--The following entities are 
     described in this clause:

       ``(I) The Institute of Medicine of the National Academies.
       ``(II) The Agency for Healthcare Research and Quality.
       ``(III) The National Institutes of Health.
       ``(IV) Academic, non-profit, or other private entities with 
     relevant expertise.

       ``(iii) Conduct of examinations.--The methodology committee 
     shall contract with the Institute of Medicine of the National 
     Academies for the conduct of the examinations described in 
     subclauses (I) and (II) of subparagraph (C)(ii).
       ``(E) Reports.--The methodology committee shall submit 
     reports to the Board on the committee's performance of the 
     functions described in subparagraph (C). Reports submitted 
     under the preceding sentence with respect to the functions 
     described in clause (i) of such subparagraph shall contain 
     recommendations--
       ``(i) for the Institute to adopt methodological standards 
     developed and updated by the methodology committee under such 
     subparagraph; and
       ``(ii) for such other action as the methodology committee 
     determines is necessary to comply with such methodological 
     standards.
       ``(8) Providing for a peer-review process for primary 
     research.--
       ``(A) In general.--The Institute shall ensure that there is 
     a process for peer review of the research conducted under 
     paragraph (2)(A)(ii). Under such process--
       ``(i) evidence from research conducted under such paragraph 
     shall be reviewed to assess scientific integrity and 
     adherence to methodological standards adopted under paragraph 
     (10); and
       ``(ii) a list of the names of individuals contributing to 
     any peer-review process during the preceding year or years 
     shall be made public and included in annual reports in 
     accordance with paragraph (12)(D).
       ``(B) Composition.--Such peer-review process shall be 
     designed in a manner so as to avoid bias and conflicts of 
     interest on the part of the reviewers and shall be composed 
     of experts in the scientific field relevant to the research 
     under review.
       ``(C) Use of existing processes.--
       ``(i) Processes of another entity.--In the case where the 
     Institute enters into a contract or other agreement with 
     another entity for the conduct or management of research 
     under this section, the Institute may utilize the peer-review 
     process of such entity if such process meets the requirements 
     under subparagraphs (A) and (B).
       ``(ii) Processes of appropriate medical journals.--The 
     Institute may utilize the peer-review process of appropriate 
     medical journals if such process meets the requirements under 
     subparagraphs (A) and (B).
       ``(9) Dissemination of research findings.--
       ``(A) In general.--The Institute shall disseminate research 
     findings to clinicians, patients, and the general public in 
     accordance with the dissemination protocols and strategies 
     adopted under paragraph (10). Research findings 
     disseminated--
       ``(i) shall convey findings of research so that they are 
     comprehensible and useful to patients and providers in making 
     health care decisions;
       ``(ii) shall discuss findings and other considerations 
     specific to certain subpopulations, risk factors, and 
     comorbidities, as appropriate;
       ``(iii) shall include considerations such as limitations of 
     research and what further research may be needed, as 
     appropriate;
       ``(iv) shall not include practice guidelines, coverage 
     recommendations, or policy recommendations; and
       ``(v) shall not include any data the dissemination of which 
     would violate the privacy of research participants or violate 
     any confidentiality agreements made with respect to the use 
     of data under this section.
       ``(B) Dissemination protocols and strategies.--The 
     Institute shall develop protocols and strategies for the 
     appropriate dissemination of research findings in order to 
     ensure effective communication of such findings and the use 
     and incorporation of such findings into relevant activities 
     for the purpose of informing higher quality and more 
     effective and timely decisions regarding medical treatments, 
     services, and items. In developing and adopting such 
     protocols and strategies, the Institute shall consult with 
     stakeholders, including practicing clinicians and patients, 
     concerning the types of dissemination that will be most 
     useful to the end users of the information and may provide 
     for the utilization of multiple formats for conveying 
     findings to different audiences.
       ``(C) Definition of research findings.--In this paragraph, 
     the term `research findings' means the results of a study or 
     assessment.
       ``(10) Adoption.--Subject to subsection (i)(1)(A)(i), the 
     Institute shall adopt the national priorities identified 
     under paragraph (1)(A), the research project agenda 
     established under paragraph (1)(B), the methodological 
     standards developed and updated by the methodology committee 
     under paragraph (7)(C)(i), any peer-review process provided 
     under paragraph (8), and dissemination protocols and 
     strategies developed under paragraph (9)(B) by majority vote. 
     In the case where the Institute does not adopt such national 
     priorities, research project agenda, methodological 
     standards, peer-review process, or dissemination protocols 
     and strategies in accordance with the preceding sentence, the 
     national priorities, research project agenda, methodological 
     standards, peer-review process, or dissemination protocols 
     and strategies shall be referred to the appropriate staff or 
     entity within the Institute (or, in the case of the 
     methodological standards, the methodology committee) for 
     further review.
       ``(11) Coordination of research and resources and building 
     capacity for research.--
       ``(A) Coordination of research and resources.--The 
     Institute shall coordinate research conducted, commissioned, 
     or otherwise funded under this section with comparative 
     clinical effectiveness and other relevant research and 
     related efforts conducted by public and private agencies and 
     organizations in order to ensure the most efficient use of 
     the Institute's resources and that research is not duplicated 
     unnecessarily.
       ``(B) Building capacity for research.--The Institute may 
     build capacity for comparative clinical effectiveness 
     research and methodologies, including research training and 
     development of data resources (such as clinical registries), 
     through appropriate activities, including using up to 20 
     percent of the amounts appropriated or credited to the PCORTF 
     under section 9511(b) of the Internal Revenue Code of 1986 
     with respect to a fiscal year to fund extramural efforts of 
     organizations such as the Cochrane Collaboration (or a 
     successor organization) and other organizations that develop 
     and maintain a data network to collect, link, and analyze 
     data on outcomes and effectiveness from multiple sources, 
     including electronic health records.
       ``(C) Inclusion in annual reports.--The Institute shall 
     report on any coordination and capacity building conducted 
     under this paragraph in annual reports in accordance with 
     paragraph (12)(E).
       ``(12) Annual reports.--The Institute shall submit an 
     annual report to Congress and the President, and shall make 
     the annual report available to the public. Such report shall 
     contain--
       ``(A) a description of the activities conducted under this 
     section during the preceding year, including the use of 
     amounts appropriated or credited to the PCORTF under section 
     9511(b) of the Internal Revenue Code of 1986 to carry out 
     this section, research projects completed and underway, and a 
     summary of the findings of such projects;
       ``(B) the research project agenda and budget of the 
     Institute for the following year;
       ``(C) a description of research priorities identified under 
     paragraph (1)(A), dissemination protocols and strategies 
     developed by the Institute under paragraph (9)(B), and 
     methodological standards developed and updated by the 
     methodology committee under paragraph (7)(C)(i) that are 
     adopted under paragraph (10) during the preceding year;
       ``(D) the names of individuals contributing to any peer-
     review process provided under paragraph (8) during the 
     preceding year or years, in a manner such that those 
     individuals cannot be identified with a particular research 
     project; and

[[Page 14330]]

       ``(E) a description of efforts by the Institute under 
     paragraph (11) to--
       ``(i) coordinate the research conducted, commissioned, or 
     otherwise funded under this section and the resources of the 
     Institute with research and related efforts conducted by 
     other private and public entities; and
       ``(ii) build capacity for comparative clinical 
     effectiveness research and other relevant research and 
     related efforts through appropriate activities.
       ``(F) any other relevant information (including information 
     on the membership of the Board, expert advisory panels 
     appointed under paragraph (5), the methodology committee 
     established under paragraph (7), and the executive staff of 
     the Institute, any conflicts of interest with respect to the 
     members of such Board, expert advisory panels, and 
     methodology committee, or with respect to any individuals 
     selected for employment as executive staff of the Institute, 
     and any bylaws adopted by the Board during the preceding 
     year).
       ``(e) Administration.--
       ``(1) In general.--Subject to paragraph (2), the Board 
     shall carry out the duties of the Institute.
       ``(2) Nondelegable duties.--The activities described in 
     subsections (b)(3)(D), (d)(1), and (d)(10) are nondelegable.
       ``(f) Board of Governors.--
       ``(1) In general.--The Institute shall have a Board of 
     Governors, which shall consist of the following members:
       ``(A) The Secretary of Health and Human Services (or the 
     Secretary's designee).
       ``(B) The Director of the Agency for Healthcare Research 
     and Quality (or the Director's designee).
       ``(C) The Director of the National Institutes of Health (or 
     the Director's designee).
       ``(D) 18 members appointed by the Comptroller General of 
     the United States not later than 6 months after the date of 
     enactment of this section, as follows:
       ``(i) 3 members representing patients and health care 
     consumers.
       ``(ii) 3 members representing practicing physicians, 
     including surgeons.
       ``(iii) 3 members representing agencies that administer 
     public programs, as follows:

       ``(I) 1 member representing the Centers for Medicare & 
     Medicaid Services who has experience in administering the 
     program under title XVIII.
       ``(II) 1 member representing agencies that administer State 
     health programs (who may represent the Centers for Medicare & 
     Medicaid Services and have experience in administering the 
     program under title XIX or the program under title XXI or be 
     a governor of a State).
       ``(III) 1 member representing agencies that administer 
     other Federal health programs (such as a health program of 
     the Department of Defense under chapter 55 of title 10, 
     United States Code, the Federal employees health benefits 
     program under chapter 89 of title 5 of such Code, a health 
     program of the Department of Veterans Affairs under chapter 
     17 of title 38 of such Code, or a medical care program of the 
     Indian Health Service or of a tribal organization).

       ``(iv) 3 members representing private payers, of whom at 
     least 1 member shall represent health insurance issuers and 
     at least 1 member shall represent employers who self-insure 
     employee benefits.
       ``(v) 3 members representing pharmaceutical, device, and 
     diagnostic manufacturers or developers.
       ``(vi) 1 member representing nonprofit organizations 
     involved in health services research.
       ``(vii) 1 member representing organizations that focus on 
     quality measurement and improvement or decision support.
       ``(viii) 1 member representing independent health services 
     researchers.
       ``(2) Qualifications.--
       ``(A) Diverse representation of perspectives.--The Board 
     shall represent a broad range of perspectives and 
     collectively have scientific expertise in clinical health 
     sciences research, including epidemiology, decisions 
     sciences, health economics, and statistics.
       ``(B) Conflicts of interest.--
       ``(i) In general.--In appointing members of the Board under 
     paragraph (1)(D), the Comptroller General of the United 
     States shall take into consideration any conflicts of 
     interest of potential appointees. Any conflicts of interest 
     of members appointed to the Board under paragraph (1) shall 
     be disclosed in accordance with subsection (i)(4)(B).
       ``(ii) Recusal.--A member of the Board shall be recused 
     from participating with respect to a particular research 
     project or other matter considered by the Board in carrying 
     out its research project agenda under subsection (d)(2) in 
     the case where the member (or an immediate family member of 
     such member) has a financial or personal interest directly 
     related to the research project or the matter that could 
     affect or be affected by such participation.
       ``(3) Terms.--
       ``(A) In general.--A member of the Board appointed under 
     paragraph (1)(D) shall be appointed for a term of 6 years, 
     except with respect to the members first appointed under such 
     paragraph--
       ``(i) 6 shall be appointed for a term of 6 years;
       ``(ii) 6 shall be appointed for a term of 4 years; and
       ``(iii) 6 shall be appointed for a term of 2 years.
       ``(B) Limitation.--No individual shall be appointed to the 
     Board under paragraph (1)(D) for more than 2 terms.
       ``(C) Expiration of term.--Any member of the Board whose 
     term has expired may serve until such member's successor has 
     taken office, or until the end of the calendar year in which 
     such member's term has expired, whichever is earlier.
       ``(D) Vacancies.--
       ``(i) In general.--Any member appointed to fill a vacancy 
     prior to the expiration of the term for which such member's 
     predecessor was appointed shall be appointed for the 
     remainder of such term.
       ``(ii) Vacancies not to affect power of board.--A vacancy 
     on the Board shall not affect its powers, but shall be filled 
     in the same manner as the original appointment was made.
       ``(4) Chairperson and vice-chairperson.--
       ``(A) In general.--The Comptroller General of the United 
     States shall designate a Chairperson and Vice-Chairperson of 
     the Board from among the members of the Board appointed under 
     paragraph (1)(D).
       ``(B) Term.--The members so designated shall serve as 
     Chairperson and Vice-Chairperson of the Board for a period of 
     3 years.
       ``(5) Compensation.--
       ``(A) In general.--A member of the Board shall be entitled 
     to compensation at the per diem equivalent of the rate 
     provided for level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.
       ``(B) Travel expenses.--While away from home or regular 
     place of business in the performance of duties for the Board, 
     each member of the Board may receive reasonable travel, 
     subsistence, and other necessary expenses.
       ``(6) Director and staff; experts and consultants.--The 
     Board may--
       ``(A) employ and fix the compensation of an executive 
     director and such other personnel as may be necessary to 
     carry out the duties of the Institute;
       ``(B) seek such assistance and support as may be required 
     in the performance of the duties of the Institute from 
     appropriate departments and agencies of the Federal 
     Government;
       ``(C) enter into contracts or make other arrangements and 
     make such payments as may be necessary for performance of the 
     duties of the Institute;
       ``(D) provide travel, subsistence, and per diem 
     compensation for individuals performing the duties of the 
     Institute, including members of any expert advisory panel 
     appointed under subsection (d)(5), members of the methodology 
     committee established under subsection (d)(7), and 
     individuals selected to contribute to any peer-review process 
     under subsection (d)(8); and
       ``(E) prescribe such rules, regulations, and bylaws as the 
     Board determines necessary with respect to the internal 
     organization and operation of the Institute.
       ``(7) Meetings and hearings.--The Board shall meet and hold 
     hearings at the call of the Chairperson or a majority of its 
     members. In the case where the Board is meeting on matters 
     not related to personnel, Board meetings shall be open to the 
     public and advertised through public notice at least 7 days 
     prior to the meeting.
       ``(8) Quorum.--A majority of the members of the Board shall 
     constitute a quorum for purposes of conducting the duties of 
     the Institute, but a lesser number of members may meet and 
     hold hearings.
       ``(g) Financial Oversight.--
       ``(1) Contract for audit.--The Institute shall provide for 
     the conduct of financial audits of the Institute on an annual 
     basis by a private entity with expertise in conducting 
     financial audits.
       ``(2) Review of audit and report to congress.--The 
     Comptroller General of the United States shall--
       ``(A) review the results of the audits conducted under 
     paragraph (1); and
       ``(B) submit a report to Congress containing the results of 
     such audits and review.
       ``(h) Governmental Oversight.--
       ``(1) Review and reports.--
       ``(A) In general.--The Comptroller General of the United 
     States shall review the following:
       ``(i) Processes established by the Institute, including 
     those with respect to the identification of research 
     priorities under subsection (d)(1)(A) and the conduct of 
     research projects under this section. Such review shall 
     determine whether information produced by such research 
     projects--

       ``(I) is objective and credible;
       ``(II) is produced in a manner consistent with the 
     requirements under this section; and
       ``(III) is developed through a transparent process.

       ``(ii) The overall effect of the Institute and the 
     effectiveness of activities conducted under this section, 
     including an assessment of--

       ``(I) the utilization of the findings of research conducted 
     under this section by health care decision makers; and

[[Page 14331]]

       ``(II) the effect of the Institute and such activities on 
     innovation and on the health economy of the United States.

       ``(B) Reports.--Not later than 5 years after the date of 
     enactment of this section, and not less frequently than every 
     5 years thereafter, the Comptroller General of the United 
     States shall submit a report to Congress containing the 
     results of the review conducted under subparagraph (A), 
     together with recommendations for such legislation and 
     administrative action as the Comptroller General determines 
     appropriate.
       ``(2) Funding assessment.--
       ``(A) In general.--The Comptroller General of the United 
     States shall assess the adequacy and use of funding for the 
     Institute and activities conducted under this section under 
     the PCORTF under section 9511 of the Internal Revenue Code of 
     1986. Such assessment shall include a determination as to 
     whether, based on the utilization of findings by public and 
     private payers, each of the following are appropriate sources 
     of funding for the Institute, including a determination of 
     whether such sources of funding should be continued or 
     adjusted, or whether other sources of funding not described 
     in clauses (i) through (iii) would be appropriate:
       ``(i) The transfer of funds from the Federal Hospital 
     Insurance Trust Fund under section 1817 and the Federal 
     Supplementary Medical Insurance Trust Fund under section 1841 
     to the PCORTF under section 1183.
       ``(ii) The amounts appropriated under subparagraphs (A), 
     (B), (C), (D)(ii), and (E)(ii) of subsection (b)(1) of such 
     section 9511.
       ``(iii) Private sector contributions under subparagraphs 
     (D)(i) and (E)(i) of such subsection (b)(1).
       ``(B) Report.--Not later than 8 years after the date of 
     enactment of this section, the Comptroller General of the 
     United States shall submit a report to Congress containing 
     the results of the assessment conducted under subparagraph 
     (A), together with recommendations for such legislation and 
     administrative action as the Comptroller General determines 
     appropriate.
       ``(i) Ensuring Transparency, Credibility, and Access.--The 
     Institute shall establish procedures to ensure that the 
     following requirements for ensuring transparency, 
     credibility, and access are met:
       ``(1) Public comment periods.--
       ``(A) In general.--The Institute shall provide for a public 
     comment period of not less than 45 and not more than 60 days 
     at the following times:
       ``(i) Prior to the adoption of the national priorities 
     identified under subsection (d)(1)(A), the research project 
     agenda established under subsection (d)(1)(B), the 
     methodological standards developed and updated by the 
     methodology committee under subsection (d)(7)(C)(i), the 
     peer-review process generally provided under subsection 
     (d)(8), and dissemination protocols and strategies developed 
     by the Institute under subsection (d)(9)(B) in accordance 
     with subsection (d)(10).
       ``(ii) Prior to the finalization of individual study 
     designs.
       ``(iii) After the release of draft findings with respect to 
     a systematic review and assessment of existing research and 
     evidence under subsection (d)(2)(A)(i).
       ``(B) Transmission of public comments on study design.--The 
     Institute shall transmit public comments submitted during the 
     public comment period described in subparagraph (A)(ii) to 
     the entity conducting research with respect to which the 
     individual study design is being finalized.
       ``(2) Additional forums.--The Institute shall, in addition 
     to the public comment periods described in paragraph (1)(A), 
     support forums to increase public awareness and obtain and 
     incorporate public input and feedback through media (such as 
     an Internet website) on the following:
       ``(A) The identification of research priorities, including 
     research topics, and the establishment of the research 
     project agenda under subparagraphs (A) and (B), respectively, 
     of subsection (d)(1).
       ``(B) Research findings.
       ``(C) Any other duties, activities, or processes the 
     Institute determines appropriate.
       ``(3) Public availability.--The Institute shall make 
     available to the public and disclose through the official 
     public Internet website of the Institute, and through other 
     forums and media the Institute determines appropriate, the 
     following:
       ``(A) The process and methods for the conduct of research 
     under this section, including--
       ``(i) the identity of the entity conducting such research;
       ``(ii) any links the entity has to industry (including such 
     links that are not directly tied to the particular research 
     being conducted under this section);
       ``(iii) draft study designs (including research questions 
     and the finalized study design, together with public comments 
     on such study design and responses to such comments);
       ``(iv) research protocols (including measures taken, 
     methods of research, methods of analysis, research results, 
     and such other information as the Institute determines 
     appropriate) with respect to each medical treatment, service, 
     and item described in subsection (a)(2)(B);
       ``(v) any key decisions made by the Institute and any 
     appropriate committees of the Institute;
       ``(vi) the identity of investigators conducting such 
     research and any conflicts of interest of such investigators; 
     and
       ``(vii) any progress reports the Institute determines 
     appropriate.
       ``(B) Notice of each of the public comment periods under 
     paragraph (1)(A), including deadlines for public comments for 
     such periods.
       ``(C) Public comments submitted during each of the public 
     comment periods under paragraph (1)(A), including such public 
     comments submitted on draft findings under clause (iii) of 
     such paragraph.
       ``(D) Bylaws, processes, and proceedings of the Institute, 
     to the extent practicable and as the Institute determines 
     appropriate.
       ``(E) Not later than 90 days after receipt by the Institute 
     of a relevant report or research findings, appropriate 
     information contained in such report or findings.
       ``(4) Conflicts of interest.--The Institute shall--
       ``(A) in appointing members to an expert advisory panel 
     under subsection (d)(5) and the methodology committee under 
     subsection (d)(7), and in selecting individuals to contribute 
     to any peer-review process under subsection (d)(8) and for 
     employment as executive staff of the Institute, take into 
     consideration any conflicts of interest of potential 
     appointees, participants, and staff; and
       ``(B) include a description of any such conflicts of 
     interest and conflicts of interest of Board members in the 
     annual report under subsection (d)(12), except that, in the 
     case of individuals contributing to any such peer review 
     process, such description shall be in a manner such that 
     those individuals cannot be identified with a particular 
     research project.
       ``(j) Rules.--
       ``(1) Gifts.--The Institute, or the Board and staff of the 
     Institute acting on behalf of the Institute, may not accept 
     gifts, bequeaths, or donations of services or property.
       ``(2) Establishment and prohibition on accepting outside 
     funding or contributions.--The Institute may not--
       ``(A) establish a corporation other than as provided under 
     this section; or
       ``(B) accept any funds or contributions other than as 
     provided under this part.
       ``(k) Rules of Construction.--
       ``(1) Coverage.--Nothing in this section shall be 
     construed--
       ``(A) to permit the Institute to mandate coverage, 
     reimbursement, or other policies for any public or private 
     payer; or
       ``(B) as preventing the Secretary from covering the routine 
     costs of clinical care received by an individual entitled to, 
     or enrolled for, benefits under title XVIII, XIX, or XXI in 
     the case where such individual is participating in a clinical 
     trial and such costs would otherwise be covered under such 
     title with respect to the beneficiary.
       ``(2) Reports and findings.--None of the reports submitted 
     under this section or research findings disseminated by the 
     Institute shall be construed as mandates, guidelines, or 
     recommendations for payment, coverage, or treatment.


   ``limitations on use of comparative effectiveness research by the 
                               secretary

       ``Sec. 1182.  The Secretary may only use evidence and 
     findings from comparative effectiveness research conducted 
     under section 1181 to make a determination regarding coverage 
     under title XVIII if such use is through an iterative and 
     transparent process which meets the following requirements:
       ``(1) Stakeholders and other individuals have the 
     opportunity to provide informed and relevant information with 
     respect to the determination.
       ``(2) Stakeholders and other individuals have the 
     opportunity to review draft proposals of the determination 
     and submit public comments with respect to such draft 
     proposals.
       ``(3) In making the determination, the Secretary 
     considers--
       ``(A) all other relevant evidence, studies, and research in 
     addition to such comparative effectiveness research; and
       ``(B) evidence and research that demonstrates or suggests a 
     benefit of coverage with respect to a specific subpopulation 
     of individuals, even if the evidence and findings from the 
     comparative effectiveness research demonstrates or suggests 
     that, on average, with respect to the general population the 
     benefits of coverage do not exceed the harm.


``trust fund transfers to patient-centered outcomes research trust fund

       ``Sec. 1183.  (a) In General.--The Secretary shall provide 
     for the transfer, from the Federal Hospital Insurance Trust 
     Fund under section 1817 and the Federal Supplementary Medical 
     Insurance Trust Fund under section 1841, in proportion (as 
     estimated by the Secretary) to the total expenditures during 
     such fiscal year that are made under title XVIII from the 
     respective trust fund, to the Patient-Centered Outcomes 
     Research Trust Fund (referred to in this section as the 
     `PCORTF') under section 9511 of the Internal Revenue Code of 
     1986, the following:
       ``(1) For fiscal year 2013, an amount equal to $1 
     multiplied by the average number of individuals entitled to 
     benefits under part A,

[[Page 14332]]

     or enrolled under part B, of title XVIII during such fiscal 
     year.
       ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 
     2018, and 2019, an amount equal to $2 multiplied by the 
     average number of individuals entitled to benefits under part 
     A, or enrolled under part B, of title XVIII during such 
     fiscal year.
       ``(b) Adjustments for Increases in Health Care Spending.--
     In the case of any fiscal year beginning after September 30, 
     2014, the dollar amount in effect under subsection (a)(2) for 
     such fiscal year shall be equal to the sum of such dollar 
     amount for the previous fiscal year (determined after the 
     application of this subsection), plus an amount equal to the 
     product of--
       ``(1) such dollar amount for the previous fiscal year, 
     multiplied by
       ``(2) the percentage increase in the projected per capita 
     amount of National Health Expenditures from the calendar year 
     in which the previous fiscal year ends to the calendar year 
     in which the fiscal year involved ends, as most recently 
     published by the Secretary before the beginning of the fiscal 
     year.''.
       (b) Coordination With Provider Education and Technical 
     Assistance.--Section 1889(a) of the Social Security Act (42 
     U.S.C. 1395zz(a)) is amended by inserting ``and to enhance 
     the understanding of and utilization by providers of services 
     and suppliers of research findings disseminated by the 
     Patient-Centered Outcomes Research Institute established 
     under section 1181'' before the period at the end.
       (c) Patient-Centered Outcomes Research Trust Fund; 
     Financing for Trust Fund.--
       (1) Establishment of trust fund.--
       (A) In general.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to establishment of trust 
     funds) is amended by adding at the end the following new 
     section:

     ``SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Patient-Centered Outcomes Research Trust Fund' (hereafter in 
     this section referred to as the `PCORTF'), consisting of such 
     amounts as may be appropriated or credited to such Trust Fund 
     as provided in this section and section 9602(b).
       ``(b) Transfers to Fund.--
       ``(1) Appropriation.--There are hereby appropriated to the 
     Trust Fund the following:
       ``(A) For fiscal year 2010, $10,000,000.
       ``(B) For fiscal year 2011, $50,000,000.
       ``(C) For fiscal year 2012, $150,000,000.
       ``(D) For fiscal year 2013--
       ``(i) an amount equivalent to the net revenues received in 
     the Treasury from the fees imposed under subchapter B of 
     chapter 34 (relating to fees on health insurance and self-
     insured plans) for such fiscal year; and
       ``(ii) $150,000,000.

       ``(E) For each of fiscal years 2014, 2015, 2016, 2017, 
     2018, and 2019--
       ``(i) an amount equivalent to the net revenues received in 
     the Treasury from the fees imposed under subchapter B of 
     chapter 34 (relating to fees on health insurance and self-
     insured plans) for such fiscal year; and
       ``(ii) $150,000,000.
     The amounts appropriated under subparagraphs (A), (B), (C), 
     (D)(ii), and (E)(ii) shall be transferred from the general 
     fund of the Treasury, from funds not otherwise appropriated.
       ``(2) Trust fund transfers.--In addition to the amounts 
     appropriated under paragraph (1), there shall be credited to 
     the PCORTF the amounts transferred under section 1183 of the 
     Social Security Act.
       ``(3) American recovery and reinvestment funds.--In 
     addition to the amounts appropriated under paragraph (1) and 
     the amounts credited under paragraph (2), of amounts 
     appropriated for comparative effectiveness research to be 
     allocated at the discretion of the Secretary of Health and 
     Human Services under the heading Agency for Healthcare 
     Research and Quality under the heading Department of Health 
     and Human Services under title VIII of Division A of the 
     American Recovery and Reinvestment Act of 2009 (Public Law 
     111-5), $10,000,000 shall be transferred to the Trust Fund.
       ``(4) Limitation on transfers to pcortf.--No amount may be 
     appropriated or transferred to the PCORTF on and after the 
     date of any expenditure from the PCORTF which is not an 
     expenditure permitted under this section. The determination 
     of whether an expenditure is so permitted shall be made 
     without regard to--
       ``(A) any provision of law which is not contained or 
     referenced in this chapter or in a revenue Act, and
       ``(B) whether such provision of law is a subsequently 
     enacted provision or directly or indirectly seeks to waive 
     the application of this paragraph.
       ``(c) Trustee.--The Secretary of Health and Human Services 
     shall be a trustee of the PCORTF.
       ``(d) Expenditures From Fund.--Amounts in the PCORTF are 
     available, without further appropriation, to the Patient-
     Centered Outcomes Research Institute established by section 
     2(a) of the Patient-Centered Outcomes Research Act of 2009 
     for carrying out part D of title XI of the Social Security 
     Act (as in effect on the date of enactment of the Patient-
     Centered Outcomes Research Act of 2009).
       ``(e) Net Revenues.--For purposes of this section, the term 
     `net revenues' means the amount estimated by the Secretary of 
     the Treasury based on the excess of--
       ``(1) the fees received in the Treasury under subchapter B 
     of chapter 34, over
       ``(2) the decrease in the tax imposed by chapter 1 
     resulting from the fees imposed by such subchapter.
       ``(f) Termination.--No amounts shall be available for 
     expenditure from the PCORTF after September 30, 2019, and any 
     amounts in such Trust Fund after such date shall be 
     transferred to the general fund of the Treasury.''.
       (B) Clerical amendment.--The table of sections for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end the following new item:

``Sec. 9511. Patient-Centered Outcomes Research Trust Fund.''.

       (2) Financing for fund from fees on insured and self-
     insured health plans.--
       (A) General rule.--Chapter 34 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subchapter:

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

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

     ``SEC. 4375. HEALTH INSURANCE.

       ``(a) Imposition of Fee.--There is hereby imposed on each 
     specified health insurance policy for each policy year ending 
     after September 30, 2012, a fee equal to the product of $2 
     ($1 in the case of policy years ending during fiscal year 
     2013) multiplied by the average number of lives covered under 
     the policy.
       ``(b) Liability for Fee.--The fee imposed by subsection (a) 
     shall be paid by the issuer of the policy.
       ``(c) Specified Health Insurance Policy.--For purposes of 
     this section:
       ``(1) In general.--Except as otherwise provided in this 
     section, the term `specified health insurance policy' means 
     any accident or health insurance policy (including a policy 
     under a group health plan) issued with respect to individuals 
     residing in the United States.
       ``(2) Exemption for certain policies.--The term `specified 
     health insurance policy' does not include any insurance if 
     substantially all of its coverage is of excepted benefits 
     described in section 9832(c).
       ``(3) Treatment of prepaid health coverage arrangements.--
       ``(A) In general.--In the case of any arrangement described 
     in subparagraph (B)--
       ``(i) such arrangement shall be treated as a specified 
     health insurance policy, and
       ``(ii) the person referred to in such subparagraph shall be 
     treated as the issuer.
       ``(B) Description of arrangements.--An arrangement is 
     described in this subparagraph if under such arrangement 
     fixed payments or premiums are received as consideration for 
     any person's agreement to provide or arrange for the 
     provision of accident or health coverage to residents of the 
     United States, regardless of how such coverage is provided or 
     arranged to be provided.
       ``(d) Adjustments for Increases in Health Care Spending.--
     In the case of any policy year ending in any fiscal year 
     beginning after September 30, 2014, the dollar amount in 
     effect under subsection (a) for such policy year shall be 
     equal to the sum of such dollar amount for policy years 
     ending in the previous fiscal year (determined after the 
     application of this subsection), plus an amount equal to the 
     product of--
       ``(1) such dollar amount for policy years ending in the 
     previous fiscal year, multiplied by
       ``(2) the percentage increase in the projected per capita 
     amount of National Health Expenditures from the calendar year 
     in which the previous fiscal year ends to the calendar year 
     in which the fiscal year involved ends, as most recently 
     published by the Secretary of Health and Human Services 
     before the beginning of the fiscal year.
       ``(e) Termination.--This section shall not apply to policy 
     years ending after September 30, 2019.

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

       ``(a) Imposition of Fee.--In the case of any applicable 
     self-insured health plan for each plan year ending after 
     September 30, 2012, there is hereby imposed a fee equal to $2 
     ($1 in the case of plan years ending during fiscal year 2013) 
     multiplied by the average number of lives covered under the 
     plan.
       ``(b) Liability for Fee.--
       ``(1) In general.--The fee imposed by subsection (a) shall 
     be paid by the plan sponsor.
       ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
     `plan sponsor' means--
       ``(A) the employer in the case of a plan established or 
     maintained by a single employer,
       ``(B) the employee organization in the case of a plan 
     established or maintained by an employee organization,
       ``(C) in the case of--
       ``(i) a plan established or maintained by 2 or more 
     employers or jointly by 1 or more employers and 1 or more 
     employee organizations,

[[Page 14333]]

       ``(ii) a multiple employer welfare arrangement, or
       ``(iii) a voluntary employees' beneficiary association 
     described in section 501(c)(9),

     the association, committee, joint board of trustees, or other 
     similar group of representatives of the parties who establish 
     or maintain the plan, or
       ``(D) the cooperative or association described in 
     subsection (c)(2)(F) in the case of a plan established or 
     maintained by such a cooperative or association.
       ``(c) Applicable Self-Insured Health Plan.--For purposes of 
     this section, the term `applicable self-insured health plan' 
     means any plan for providing accident or health coverage if--
       ``(1) any portion of such coverage is provided other than 
     through an insurance policy, and
       ``(2) such plan is established or maintained--
       ``(A) by one or more employers for the benefit of their 
     employees or former employees,
       ``(B) by one or more employee organizations for the benefit 
     of their members or former members,
       ``(C) jointly by 1 or more employers and 1 or more employee 
     organizations for the benefit of employees or former 
     employees,
       ``(D) by a voluntary employees' beneficiary association 
     described in section 501(c)(9),
       ``(E) by any organization described in section 501(c)(6), 
     or
       ``(F) in the case of a plan not described in the preceding 
     subparagraphs, by a multiple employer welfare arrangement (as 
     defined in section 3(40) of Employee Retirement Income 
     Security Act of 1974), a rural electric cooperative (as 
     defined in section 3(40)(B)(iv) of such Act), or a rural 
     telephone cooperative association (as defined in section 
     3(40)(B)(v) of such Act).
       ``(d) Adjustments for Increases in Health Care Spending.--
     In the case of any plan year ending in any fiscal year 
     beginning after September 30, 2014, the dollar amount in 
     effect under subsection (a) for such plan year shall be equal 
     to the sum of such dollar amount for plan years ending in the 
     previous fiscal year (determined after the application of 
     this subsection), plus an amount equal to the product of--
       ``(1) such dollar amount for plan years ending in the 
     previous fiscal year, multiplied by
       ``(2) the percentage increase in the projected per capita 
     amount of National Health Expenditures from the calendar year 
     in which the previous fiscal year ends to the calendar year 
     in which the fiscal year involved ends, as most recently 
     published by the Secretary of Health and Human Services 
     before the beginning of the fiscal year.
       ``(e) Termination.--This section shall not apply to plan 
     years ending after September 30, 2019.

     ``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

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

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

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

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

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

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

     SEC. 3. COORDINATION WITH FEDERAL COORDINATING COUNCIL FOR 
                   COMPARATIVE EFFECTIVENESS RESEARCH.

       Section 804 of Division A of the American Recovery and 
     Reinvestment Act of 2009 (42 U.S.C. 299b-8) is amended--
       (1) in subsection (c)--
       (A) in paragraph (1), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(3) provide support to the Patient-Centered Outcomes 
     Research Institute established under section 1181(b)(1) of 
     the Social Security Act (referred to in this section as the 
     `Institute').'';
       (2) in subsection (d)(2)--
       (A) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Inclusion of chairperson of the board of governors of 
     the patient-centered outcomes research institute.--In the 
     case where the Chairperson of the Board of Governors of the 
     Patient-Centered Outcomes Research Institute established 
     under section 1181(f) of the Social Security Act is a senior 
     Federal officer or employee with responsibility for a health-
     related program, the members of the council shall include 
     such Chairperson.''.
       (3) in subsection (e)(2), by striking ``regarding its 
     activities'' and all that follows through the period at the 
     end and inserting ``containing--
       ``(A) an inventory of its activities with respect to 
     comparative effectiveness research conducted by relevant 
     Federal departments and agencies; and
       ``(B) recommendations concerning better coordination of 
     comparative effectiveness research by such departments and 
     agencies.'';
       (4) by redesignating subsection (g) as subsection (h); and
       (5) by inserting after subsection (f) the following new 
     subsection:
       ``(g) Coordination With the Patient-Centered Outcomes 
     Research Institute.--The Council shall coordinate with the 
     Institute in carrying out its duties under this section.''.

     SEC. 4. GAO REPORT ON NATIONAL COVERAGE DETERMINATIONS 
                   PROCESS.

       Not later than 18 months after the date of enactment of 
     this Act, the Comptroller General of the United States shall 
     submit a report to Congress on the process for making 
     national coverage determinations (as defined in section 
     1869(f)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ff(f)(1)(B)) under the Medicare program under title XVIII 
     of the Social Security Act. Such report shall include a 
     determination whether, in initiating and conducting such 
     process, the Secretary of Health and Human Services has 
     complied with applicable law and regulations, including 
     requirements for consultation with appropriate outside 
     experts, providing appropriate notice and comment 
     opportunities to the public, and making information and data 
     (other than proprietary data) considered in making such 
     determinations available to the public and to nonvoting 
     members of any advisory committees established to advise the 
     Secretary with respect to such determinations.

  Mr. CONRAD. Mr. President, today I join my good friend and colleague, 
Senator Baucus, in introducing the Patient-Centered Outcomes Research 
Act of 2009. This proposal builds on the legislation we introduced 
during the last Congress. Our legislation is the product of months of 
careful deliberations regarding the best way to expand the quality and 
quantity of evidence available to patients, physicians, and other 
health care decision-makers about the comparative clinical 
effectiveness of health care services and treatments. We have met with 
dozens of key stakeholders and thought leaders to discuss various 
aspects of this legislation. People have come to us with many 
constructive suggestions, many of which are reflected in the bill that 
we are introducing today. I am proud of the result. This legislation 
lays the groundwork for improving health care quality

[[Page 14334]]

and patient outcomes, enhancing patient safety, and reducing overall 
health care costs in the long run.
  As Chairman of the Senate Budget Committee, I am acutely aware of the 
long-term budget challenges facing our Nation. Health care spending is 
growing at an unsustainable rate. Although demographic changes 
associated with the retirement of the baby boom generation contribute 
to this spending growth, the most significant factor is growth in 
health care costs in excess of per capita GDP growth. According to 
Congressional Budget Office projections, by 2050, Medicare and Medicaid 
spending alone will consume 12 percent of our Nation's gross domestic 
product.
  But excess growth in per capita health care costs is not just a 
challenge for Federal health spending and the Federal budget. If we 
continue on the current trajectory, the private sector will also be 
overwhelmed by rising health care costs. In fact, total health care 
spending is projected to grow from about 17.6 percent of GDP in 2009--
which is far higher than in other industrialized countries--to more 
than 37 percent of GDP in 2050.
  Clearly, we need to address the underlying causes of rising health 
care costs, not just in the Medicare and Medicaid programs, but in the 
overall health care system. Simply cutting Medicare and Medicaid 
without making other changes will do little to solve the larger problem 
we face. Skyrocketing health care costs are hurting families, 
businesses, and State and Federal budgets. In a speech before the 
Business Roundtable on March 12th, President Obama emphasized this 
point: ``Medicare costs are consuming our Federal budget. Medicaid is 
overwhelming our State budgets. At the fiscal summit we held in the 
White House a few weeks ago, the one thing on which everyone agreed was 
that the greatest threat to America's fiscal health is not the 
investments we've made to rescue our economy. It is the skyrocketing 
cost of our health care system.''
  Health care reform is about achieving three important goals: choice, 
quality, and affordability. To achieve these three goals, we must 
confront the fact that our health care system does not deliver care as 
effectively or efficiently as it should. There is widespread agreement 
that Americans are not getting good value for the money we are already 
spending on health care. According to work by the Dartmouth Atlas 
Project, nearly 30 percent of total spending in our health care system, 
or $700 billion per year, is wasteful and does nothing to improve 
health outcomes.
  Despite our high level of health care spending, health outcomes in 
the United States are no better than health outcomes in the other OECD 
countries. Indeed, the U.S. spends twice as much as other OECD nations 
on health care, yet Americans have shorter average life expectancies 
and higher average mortality rates than residents of other OECD 
countries. OECD data show that the U.S. has one of the highest rates of 
medical errors among industrialized nations and that U.S. patients are 
more likely to receive duplicate tests and more likely to visit an 
emergency room for a condition that could have been treated in a 
regular office visit than most other nations in the comparison. 
Similarly, a 2008 Commonwealth Fund report found that the U.S. is last 
among 19 industrialized nations in preventable mortality, or deaths 
that could have been prevented if individuals had access to timely and 
effective care.
  We can and must find ways to deliver health care more efficiently, 
reduce ineffective or unnecessary care, and get better health outcomes 
without harming patients.
  One solution is to generate better information about the relative 
clinical effectiveness of alternative health strategies--and encourage 
patients and providers to use that information to make better choices 
about their health. Many health care services and treatments are 
absorbed quickly into routine medical care--yet there is little 
evidence that these services and treatments are any more clinically 
effective than existing treatments and services. Generating more 
comparative clinical effectiveness research is one of the keys to 
transforming our health care system away from a system based on volume 
toward a system that focuses on evidence-based medicine and improving 
patient outcomes.
  The Federal Government currently funds some comparative effectiveness 
research through the Agency for Healthcare Research and Quality, AHRQ, 
the National Institutes of Health, NIH, and the Veterans Health 
Administration. For example, the Effective Health Care Program at AHRQ 
has been a successful initiative. But comparative effectiveness 
research is not the primary focus of any Federal agency--nor is this 
Federal funding occurring permanently on a large scale.
  Provisions included in the American Recovery and Reinvestment Act, 
ARRA, temporarily expanded existing Federal efforts by providing $1.1 
billion to AHRQ, NIH, and the Secretary of Health and Human Services, 
HHS, for such research through 2010. Important work is currently 
underway to develop recommendations for how best to utilize some of 
these resources. In particular, I would like to commend the work being 
done by the Institutes of Medicine, IOM, to convene a panel of experts 
that is tasked with making recommendations on how to spend the $400 
million provided to the HHS Secretary through ARRA. The IOM panel has 
been doing extraordinary work in gathering ideas and input from a very 
broad group of stakeholders under a very tight timeline. I look forward 
to seeing the results of its work at the end of the month. It is this 
model of allowing for input from a broad set of stakeholders and of 
conducting priority-setting activities in a transparent way that we are 
hoping to advance in the legislation we are introducing today.
  The Congressional Budget Office, CBO, the Medicare Payment Advisory 
Commission, MedPAC, and the IOM have all discussed the positive impact 
of creating a new entity charged solely with conducting research on the 
comparative effectiveness of health interventions, including 
pharmaceuticals, medical devices, medical procedures, diagnostic tools, 
medical services and other therapies.
  In its June 2007 report to Congress, MedPAC issued a unanimous 
recommendation that ``Congress should charge an independent entity to 
sponsor credible research on comparative effectiveness of health care 
services and disseminate this information to patients, providers, and 
public and private payers.''
  And the Congressional Budget Office agrees. In a report, entitled, 
``Research on the Comparative Effectiveness of Medical Treatments: 
Issues and Options for an Expanded Federal Role,'' former CBO Director 
Peter Orszag wrote that, ``generating better information about the 
costs and benefits of different treatment options--through research on 
the comparative effectiveness of those options--could help reduce 
health care spending without adversely affecting health overall.''
  The IOM also supports getting better information into the hands of 
patients and providers. As part of its report, ``Learning What Works 
Best: The Nation's Need for Evidence on Comparative Effectiveness in 
Health Care,'' the Institute concluded that, ``[a] substantially 
increased capacity to conduct and evaluate research on clinical 
effectiveness of interventions brings many potential opportunities for 
improvement across a wide spectrum of healthcare needs.''
  This bill that Senator Baucus and I are introducing today represents 
an important step in creating a long-term vision for expanding 
comparative clinical effectiveness research. The bill would 
significantly expand the conduct of comparative clinical effectiveness 
research to get better information into the hands of patients and 
providers in the hopes of improving health outcomes and reducing 
unnecessary or ineffective care.
  The purpose of this bill is to provide patients and physicians with 
objective and credible evidence about which health care treatments and 
services are most clinically effective for particular patient 
populations. The research conducted under our bill would evaluate

[[Page 14335]]

and compare the clinical effectiveness of two or more health care 
interventions, protocols for treatment, care management, and delivery, 
procedures, medical devices, diagnostic tools, and pharmaceutical, 
including biologicals
  Access to better evidence about what works best will help patients 
and health care providers make better-informed decisions about how best 
to treat particular diseases and conditions. Our hope is that the 
evidence generated by this research could lead to savings in the 
overall health care system over the long-term by empowering patients 
and doctors with information about treatments and services that may be 
clinically ineffective, while at the same time improving health care 
outcomes and quality.
  Specifically, our bill creates a private, nonprofit corporation, 
known as the Patient-Centered Outcomes Research Institute, which would 
be responsible setting national research priorities and carrying out a 
comparative clinical effectiveness research agenda. In conducting the 
research, the Institute would contract with AHRQ, the VA, and other 
appropriate public and private entities and could use a variety of 
research methods, including clinical trials, observational studies and 
systematic reviews of existing evidence.
  Many leading experts on this issue, such as MedPAC, have concerns 
that a large entity within the Federal government would be vulnerable 
to political interference that could hamper the Institute's 
credibility, and, therefore, limit the usefulness of its research. As a 
result, we chose a model outside of the Federal government, but subject 
to government oversight.
  In order to ensure that the information developed is credible and 
unbiased, our bill establishes a 21-Member Board of Governors to 
oversee the Institute's activities. Permanent board members would 
include the HHS Secretary and the Directors of AHRQ and NIH. The 
remaining 18 board members would be appointed by the Comptroller 
General of the U.S. and would include a balanced mix of patients, 
physicians, public and private payers, academic researchers, 
philanthropic organizations, quality improvement entities, and medical 
technology manufacturers.
  To ensure further credibility, the Institute is also required to 
appoint expert advisory panels of patients, clinicians, researchers and 
other stakeholders that would assist in the development and carrying 
out of the research agenda; establish a methodology committee that 
would help create methodological standards by which all research 
commissioned by the Institute must be conducted; create a peer review 
process through which all primary research findings must be assessed; 
and develop protocols to help translate and disseminate the evidence in 
the most effective, user-friendly way.
  Moreover, Senator Baucus and I want to ensure that the operations of 
the Institute are transparent and focused on the needs of patients. 
Therefore, we built in a strong role for public comment prior to all 
key decisions made by the Institute. For example, the bill requires 
public comment periods prior to the approval of research priorities and 
individual study designs. In addition, the bill calls for public forums 
to seek input, requires that all proceedings of the Institute be made 
public at least seven days in advance and be made available through 
annual reports, and requires that any conflicts of interest be made 
public and that board members recuse themselves from matters in which 
they have a financial or personal interest.
  Because all health care users will benefit from this research, our 
legislation funds the Institute with contributions from both public and 
private payers. These contributions will include mandatory general 
revenues from the Federal Government, amounts from the Medicare Trust 
Funds equal to $2 per beneficiary annually, and amounts from a $2 fee 
per-covered life assessed annually on insured and self-insured health 
plans. Funding will ramp up over a series of years. By the 5th year, we 
expect the Institute's total annual funding to reach nearly $600 
million per year and continue to grow thereafter.
  The concept of an all-payer approach for comparative effectiveness 
research has been embraced by a number of health care experts. For 
example, on the subject of comparative effectiveness information in its 
June 2008 report, MedPAC stated: ``The Commission supports funding from 
federal and private sources as the research findings will benefit all 
users--patients, providers, private health plans, and federal health 
programs. The Commission also supports a dedicated funding mechanism to 
help ensure the entity's independence and stability. Dedicated broadly 
based financing would reduce the likelihood of outside influence and 
would best ensure the entity's stability . . .''
  To ensure accountability for these funds and to the Institute's 
mission, our bill requires an annual financial audit of the Institute. 
In addition, the bill requires GAO to report to Congress every five 
years on the processes developed by the Institute and its overall 
effectiveness, including how the research findings are used by health 
care consumers and what impact the research is having on the health 
economy. Finally, the bill requires a review of the adequacy of the 
Institute's funding, which will include a review of the appropriateness 
and adequacy of each funding source.
  Let me take a moment to address some of the criticisms that might be 
levied against this proposal. Some may say this Institute will impede 
access to care and will deny coverage for high-cost health care 
services. That is simply not the case. Our proposal explicitly 
prohibits the Institute from making coverage decisions or setting 
practice guidelines. It will be up to medical societies and patient 
groups to use the research findings as they see fit. Moreover, to the 
extent that high-cost health care services or new technologies are 
studied by the Institute and found to be clinically ineffective 
compared to other services and technologies, such evidence will be made 
public to consumers and providers so that they can make informed 
choices.
  We have been working with colleagues on the other side of the aisle 
who have concerns about the impact this research could have on patient 
safety and access to health care treatments and services. For several 
months, we have been engaged in an active dialogue to address these 
concerns. While I am disappointed that those discussions did not result 
in co-sponsorships for this legislation at this time, I look forward to 
continuing that dialogue in a constructive manner as we work to include 
a long-term vision for comparative effectiveness research in a 
comprehensive health reform bill.
  In the meantime, we have made a number of meaningful changes to our 
legislation that address the concerns voiced by our colleagues. For 
example, we have placed a greater focus on aspects of personalized 
medicine and included new patient safeguards to ensure that when CMS 
uses this research it does so through a process that is transparent, 
allows for public comment, and takes into account the benefits to 
particular subpopulations.
  This bill is a balanced, carefully crafted proposal that has taken 
into consideration the recommendations of a broad range of stakeholders 
and thought-leaders. We welcome further discussion and suggested 
improvements. But we refuse to allow this proposal to get bogged down 
in political maneuvering or scare tactics. Our nation needs to 
immediately ramp up and sustain a major comparative clinical 
effectiveness research initiative to improve health outcomes and reduce 
ineffective and inefficient care.
  Senator Baucus and I will work jointly to push for the expeditious 
enactment of this bill as part of a comprehensive health reform bill. I 
urge all of my colleagues to join our effort and cosponsor the Patient-
Centered Outcomes Research Act of 2009. There is no time to waste.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself, Mr. Casey, Mr. Bond, Ms. Stabenow, 
        Mr. Cardin, Mr. Sanders, Mr. Whitehouse, and Mr. Crapo):
  S. 1214. A bill to conserve fish and aquatic communities in the 
United States through partnerships that foster

[[Page 14336]]

fish habitat conservation, to improve the quality of life for the 
people of the United States, and for other purposes; to the Committee 
on Environment and Public Works.
  Mr. LIEBERMAN. Mr. President, I rise to speak about the National Fish 
Habitat Conservation Act, which I am introducing today along with my 
colleagues Senators Bond, Casey, Stabenow, Cardin, Whitehouse, and 
Sanders. This legislation will significantly advance ongoing efforts to 
restore and protect fish habitat, improve the health of our waterways 
and ensure that we have robust fish populations far into the future.
  Today, nearly half of our fish populations are in decline and half of 
our waters are impaired, which is why it is especially important that 
we work together to protect and restore remaining habitat. The National 
Fish Habitat Conservation Act will leverage federal, state and private 
funds to support voluntary regional conservation partnerships, which in 
turn will allow federal and state governments, the recreational and 
commercial fishing industries, the conservation community, and 
businesses to work together--for the first time--to effectively 
conserve aquatic habitats.
  Our legislation authorizes $75 million annually for fish habitat 
projects. Based on the highly successful North American Wetlands 
Conservation Act model, the bill establishes a multi-stakeholder 
National Fish Habitat Board to recommend science-based conservation 
projects to the Secretary of Interior for funding. Regional partners 
will then work to implement those conservation projects to protect, 
restore and enhance fish habitats and fish populations.
  The National Fish Habitat Conservation Act will go a long way toward 
ensuring the viability of our fish and their habitats for generations 
to come. I look forward to working with my colleagues to pass this 
important legislation and reverse the decline of our ailing waterways 
and fisheries.
                                 ______
                                 
      By Mr. CASEY (for himself and Mr. Schumer):
  S. 1215. A bill to amend the Safe Drinking Water Act to repeal a 
certain exemption for hydraulic fracturing, and for other purposes; to 
the Committee on Environment and Public Works.
  Mr. CASEY. Mr. President, I rise today to introduce the Fracturing 
Responsibility and Awareness of Chemicals, FRAC, Act along with my 
colleague, Senator Schumer, that protects drinking water and public 
health from the risks associated with an oil and gas extraction process 
called hydraulic fracturing. Specifically, our bill does two things. 
First, it repeals an exemption to the Safe Drinking Water Act that was 
granted to oil and gas companies four years ago. Second, it requires 
oil and gas companies to publicly disclose the chemicals used in 
hydraulic fracturing.
  The regulation of hydraulic fracturing under the Safe Drinking Water 
Act is supported by 77 groups, including 14 groups from Pennsylvania.
  The oil and gas industry uses hydraulic fracturing in 90 percent of 
wells. The process, which is also called ``fracking,'' involves 
injecting tens of thousands of gallons of water mixed with sand and 
chemical additives deep into the rock under extremely high pressure. 
The pressure breaks open the rock releasing trapped natural gas, which 
is then captured. Fracking often occurs near underground sources of 
drinking water. Unfortunately, a provision included in the 2005 Energy 
Policy Act exempted hydraulic fracturing from compliance with the Safe 
Drinking Water Act. The oil and gas industry is the only industry to 
have this exemption.
  The Casey-Schumer legislation is extremely important to people living 
in Pennsylvania, especially those living in communities along a 
geological formation called the Marcellus Shale. The Marcellus is a 
geological formation covering 34 million acres extending from southern 
New York, through central and western Pennsylvania, into the eastern 
half of Ohio and across most of West Virginia. The deepest layer of the 
Marcellus formation--the Marcellus Shale--contains a significant amount 
of natural gas trapped in deep rock formations up to 9,000 feet below 
ground. Last year, a professor at Penn State estimated that there was 
168 million cubic feet of natural gas in the Marcellus Shale. In the 
industry it is what is known as a ``Super Giant gas field.'' It is 
enough natural gas to provide for the entire country for 7 years. This 
vast amount of natural gas combined with a more complete knowledge of 
the natural fractures in the Marcellus Shale through which the gas can 
be easily extracted, has led to what Pennsylvanians are calling a gas 
rush.
  As I have mentioned, fracking involves injecting water mixed with 
chemicals. My major concern is that the chemicals added to the water to 
create fracking fluids are highly toxic. We're talking about chemicals 
like formaldehyde, benzene, and toluene. These chemicals are injected 
right below underground drinking water. This is especially important to 
Pennsylvania because our state has the second highest number of private 
wells for drinking water in the nation, second only to Michigan. Three 
million Pennsylvanians are dependent on private wells to provide safe 
drinking water to their homes. So massive drilling to get to the 
natural gas in the Marcellus Shale is not required to comply with the 
Safe Drinking Water Act, but drilling is happening right next to 
drinking water supplies. You can see why Pennsylvanians are concerned 
about their future access to safe drinking water.
  Now, the oil and gas industry would have you believe that there is no 
threat to drinking water from hydraulic fracturing. But the fact is we 
are already seeing cases in Pennsylvania, Colorado, Virginia, West 
Virginia, Alabama, Wyoming, Ohio, Arkansas, Utah, Texas, and New Mexico 
where residents have become ill or groundwater has become contaminated 
after hydraulic fracturing operations began in the area. This is not 
simply anecdotal evidence; scientists have found enough evidence to 
raise concerns as well. In a recent letter supporting our bill, 23 
health professionals and scientists wrote the following:

       . . . Oil and gas operations are known to release 
     substances into the environment that are known to be very 
     hazardous to human health, including benzene, arsenic, 
     mercury, hydrogen sulfide, and radioactive materials. The 
     demonstrated health effects caused by these substances 
     include cancers, central nervous system damage, skin and eye 
     irritation, and lung diseases. For example, fluids used in 
     the hydraulic fracturing process may contain toxic chemicals 
     such as 2-butoxyethanol, formaldehyde, sodium hydroxide, 
     glycol ethers, and naphthalene. For these reasons, we support 
     regulation of hydraulic fracturing under the Safe Drinking 
     Water Act and the disclosure of all chemical constituents in 
     hydraulic fracturing fluids to public agencies, including the 
     disclosure of constituent formulas in cases of medical need. 
     Moreover, we support full regulation of stormwater runoff, 
     which can pollute drinking water supplies, under the Clean 
     Water Act.
       There are growing reports of individuals living near oil 
     and gas operations who suffer illnesses that are linked to 
     these activities, yet there has been no systemic attempt to 
     gather the necessary data, establish appropriate monitoring, 
     analyze health exposure or assess risk related to any of 
     these activities. This should be done, in addition to full 
     Health Impact Assessments to inform future planning and 
     policy efforts.

  In Dimock, Pennsylvania, we have a recent example of the risks 
involved with hydraulic fracturing. On New Year's Day, Norma 
Fiorentino's drinking water well exploded. It literally blew up. Stray 
methane leaked and migrated upward through the rock and into the 
aquifer as natural gas deposits were drilled nearby. An investigation 
by the Commonwealth of Pennsylvania shows that a spark created when the 
pump in the well house turned on may have led to the explosion. The 
blast cracked in half the several-thousand-pound concrete slab at the 
drilling pad on Ms. Fiorentino's property and tossed it aside. 
Fortunately, no one was hurt in the explosion. But throughout the town, 
several drinking water wells have exploded and nine wells have been 
found to contain so much natural gas that one homeowner was advised to 
open a window if he plans to take a bath. Tests of the well water show 
high amounts of aluminum and

[[Page 14337]]

iron, which leads researchers to believe that drilling fluids are 
contaminating the water along with the gas. So this is a real concern. 
We are talking about serious implications if we don't develop the 
Marcellus Shale carefully and responsibly.
  I would point out that Pennsylvania has a long history of developing 
our natural resources to power the region and the nation. In fact, 
Pennsylvania is home to the Drake Well near Titusville, Pennsylvania, 
which celebrates its 150th anniversary this year. The Drake Well was 
the first commercial oil well in the United States and it launched the 
modern petroleum industry. In addition to oil, Western Pennsylvania has 
long produced natural gas. Pennsylvania also mines coal which we use to 
provide electricity to many of our neighboring states. Pennsylvanians 
are proud of the contributions we have made to the growth of our 
nation. Contributions that were made because we developed our abundant 
natural resources. But we also bear the burden of some environmental 
legacies, most created in previous generations when we were not as 
concerned with responsible development. We have old natural gas wells 
that were not capped and leak methane into homes in Versailles, PA. We 
have acid mine drainage that we spend millions of dollars every year to 
try and remediate. These examples are the lessons from which we need to 
learn.
  Pennsylvania will develop the natural gas in the Marcellus Shale. We 
are doing it right now, and we will see more drilling over the next few 
years. But we must develop the Marcellus Shale using the best 
environmental practices to protect our communities and our state. That 
is why I am introducing the Fracturing Responsibility and Awareness of 
Chemicals Act. This legislation will ensure that hydraulic fracturing 
does not unnecessarily jeopardize our groundwater. There are affordable 
alternatives that oil and gas companies can use so that they are not 
risking contaminating drinking water wells with potentially hazardous 
chemicals.
  I think Norma Fiorentino from Dimock, Pennsylvania, summed it up best 
when she told a reporter, ``You can't buy a good well.''
  So I urge all of my colleagues to support this legislation and ensure 
that our groundwater is protected as we responsibly develop our natural 
resources.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1215

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fracturing Responsibility 
     and Awareness of Chemicals (FRAC) Act''.

     SEC. 2. REGULATION OF HYDRAULIC FRACTURING.

       (a) Underground Injection.--Section 1421(d) of the Safe 
     Drinking Water Act (42 U.S.C. 300h(d)) is amended by striking 
     paragraph (1) and inserting the following:
       ``(1) Underground injection.--
       ``(A) In general.--The term `underground injection' means 
     the subsurface emplacement of fluids by well injection.
       ``(B) Inclusion.--The term `underground injection' includes 
     the underground injection of fluids or propping agents 
     pursuant to hydraulic fracturing operations relating to oil 
     or gas production activities.
       ``(C) Exclusion.--The term `underground injection' does not 
     include the underground injection of natural gas for the 
     purpose of storage.''.
       (b) Disclosure.--Section 1421(b) of the Safe Drinking Water 
     Act (42 U.S.C. 300h(b)) is amended--
       (1) in paragraph (1)(C), by inserting before the semicolon 
     the following: ``, including a requirement that any person 
     using hydraulic fracturing disclose to the State (or to the 
     Administrator in any case in which the Administrator has 
     primary enforcement responsibility in a State) the chemical 
     constituents (but not the proprietary chemical formulas) used 
     in the fracturing process''; and
       (2) by adding at the end the following:
       ``(4) Disclosures of chemical constituents.--
       ``(A) In general.--The State (or the Administrator, as 
     applicable) shall make available to the public the 
     information contained in each disclosure of chemical 
     constituents under paragraph (1)(C), including by posting the 
     information on an appropriate Internet website.
       ``(B) Immediate disclosure in case of emergency.--
       ``(i) In general.--Subject to clause (ii), the regulations 
     promulgated pursuant to subsection (a) shall require that, in 
     any case in which the State (or the Administrator, as 
     applicable) or an appropriate treating physician or nurse 
     determines that a medical emergency exists and the 
     proprietary chemical formula or specific chemical identity of 
     a trade-secret chemical used in hydraulic fracturing is 
     necessary for emergency or first-aid treatment, the 
     applicable person using hydraulic fracturing shall 
     immediately disclose to the State (or the Administrator) or 
     the treating physician or nurse the proprietary chemical 
     formula or specific chemical identity of a trade-secret 
     chemical, regardless of the existence of--

       ``(I) a written statement of need; or
       ``(II) a confidentiality agreement.

       ``(ii) Requirement.--A person using hydraulic fracturing 
     that makes a disclosure required under clause (i) may require 
     the execution of a written statement of need and a 
     confidentiality agreement as soon as practicable after the 
     determination by the State (or the Administrator) or the 
     treating physician or nurse under that clause.''.
                                 ______
                                 
      By Mr. KOHL:
  S. 1219. A bill to amend subtitle A of the Antitrust Criminal Penalty 
Enhancement and Reform Act of 2004 to extend the operation of such 
subtitle for a 1-year period ending June 22, 2010; to the Committee on 
the Judiciary.
  Mr. KOHL. Mr. President, I rise today to introduce the Antitrust 
Criminal Penalties Enforcement and Reform Act of 2004 Extension Act. 
This legislation extends a critical component of the Antitrust Criminal 
Penalty Enforcement and Reform Act of 2004, set to expire on June 22, 
which encourages participation in the Antitrust Division's leniency 
program. As a result, the Justice Department will be able to continue 
to detect, investigate and aggressively prosecute price-fixing cartels 
which harm consumers.
  The Antitrust Division of the Department of Justice has long 
considered criminal cartel enforcement a top priority, and its 
Corporate Leniency Policy is an important tool in that enforcement. 
Criminal antitrust offenses are generally conspiracies among 
competitors to fix prices, rig bids, or allocate markets of customers. 
The Leniency Policy creates incentives for corporations to report their 
unlawful cartel conduct to the Division, by offering the possibility of 
immunity from criminal charges to the first-reporting corporation, as 
long as there is full cooperation. For more than 15 years, this policy 
has allowed the Division to uncover cartels affecting billions of 
dollars worth of commerce here in the U.S., which has led to 
prosecutions resulting in record fines and jail sentences.
  An important part of the Division's Leniency Policy, added by the 
Antitrust Criminal Penalties Enforcement and Reform Act of 2004, limits 
the civil liability of leniency participants to the actual damages 
caused by that company--rather than triple the damages caused by the 
entire conspiracy, which is the typical in civil antitrust lawsuits. 
This removed a significant disincentive to participation in the 
leniency program--the concern that, despite immunity from criminal 
charges, a participating corporation might still be on the hook for 
treble damages in any future antitrust lawsuits.
  Maintaining strong incentives to make use of the Leniency Policy 
provides important benefits to the victims of antitrust offenses, often 
consumers who paid artificially high prices. It makes it more likely 
that criminal antitrust violations will be reported and, as a result, 
consumers will be able to identify and recover their losses from paying 
illegally inflated prices. The policy also requires participants to 
cooperate with plaintiffs in any follow-on civil lawsuits, which makes 
it more likely that the plaintiff consumers will be able to build 
strong cases against all members of the conspiracy.
  Since the passage of ACPERA, the Antitrust Division has uncovered a 
number of significant cartel cases through its leniency program, 
including the air cargo investigation, which so far has yielded over a 
billion dollars in criminal fines. In that investigation, several 
airlines pled guilty to conspiring to fix international air cargo rates 
and international passenger fuel surcharges. Not only were criminal

[[Page 14338]]

fines levied, but one high-ranking executive pled guilty and agreed to 
serve eight months in prison. In fiscal year 2004, before the passage 
of ACPERA, criminal antitrust fines totaled $350 million. Criminal 
antitrust fines in fiscal year 2009 have already surpassed $960 
million. Scott Hammond, the Deputy Assistant Attorney General for 
Criminal Enforcement in the Antitrust Division, has stated that the 
damages limitation has made its Corporate Leniency Program ``even more 
effective'' at detecting and prosecuting cartels.
  ACPERA's damages limitation is set to expire later this month, so we 
must act quickly to extend it. Otherwise, the Justice Department will 
lose an important tool that it uses to investigate and prosecute 
criminal cartel activity. This bill extends that provision for 1 year. 
Over the next year, we will fully review ACPERA, and consider potential 
changes to make it more effective.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1219

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Antitrust Criminal Penalties 
     Enforcement and Reform Act of 2004 Extension Act''.

     SEC. 2. DELAY OF SUNSET.

       Section 211(a) of the Antitrust Criminal Penalty 
     Enhancement and Reform Act of 2004 (15 U.S.C. 1 note) is 
     amended by striking ``5 years'' and inserting ``6 years''.

     SEC. 3. EFFECTIVE DATE OF AMENDMENT.

       The amendment made by section 2 shall take effect 
     immediately before June 22, 2009.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Wyden):
  S. 1220. A bill to require that certain complex diagnostic laboratory 
tests performed by an independent laboratory after a hospital 
outpatient encounter or inpatient stay during which the specimen 
involved was collected shall be treated as services for which payment 
may be made directly to the laboratory under part B of title XVIII of 
the Social Security Act; to the Committee on Finance.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce The Patient Access to Critical Lab Tests Act. The legislation 
would modernize Medicare billing rules to improve beneficiary access to 
important, life-saving advanced diagnostic technologies.
  Mapping the human genome has enabled revolutionary advances in 
understanding a wide variety of diseases, and ushered in an era where 
treatments can be tailored to individual patients based on their DNA 
and specific molecular character of their disease. Complex diagnostic 
laboratory tests make such ``personalized medicine'' possible. By 
understanding the molecular nature of disease, these new technologies 
increasingly allow clinicians and patients to pick individualized 
treatment options, rather than basing treatment choices on broad 
assessments of what works best for a population.
  Unfortunately Medicare payment, coding and coverage practices are 
harming Medicare beneficiary access to specialized diagnostic tests. In 
particular is the Centers for Medicare and Medicaid Services, CMS, 
Medicare ``date of service'' regulation. Under the regulation, any test 
furnished within 14 days after the patient's discharge from a hospital 
is deemed to have been performed on the day of collection, when the 
patient was in or at the hospital, even though the patient may no 
longer be at the hospital when the test is ordered, and the test is not 
used to guide treatment during the patient's hospital encounter. A 
laboratory test that is deemed to coincide with the date on which the 
patient was a hospital patient becomes a service furnished by the 
hospital, even though the hospital may have nothing to do with the 
ordering, performance, or use of the test.
  The combination of these rules creates a host of administrative and 
financial disincentives for hospitals to embrace these tests.
  Hospitals are required to exercise professional responsibility over 
these services, but are unwilling to do so for tests that are not 
offered by the hospital, and which are, in fact, offered by 
laboratories that are otherwise unaffiliated with and unfamiliar to the 
hospital.
  Hospitals are required to bill for the service; the laboratories may 
not bill Medicare directly, and instead must bill the hospital for the 
services they provide, which means the hospital assumes the financial 
risk that the service is covered and that Medicare will pay for it.
  In light of these administrative and financial disincentives, 
hospitals are encouraging physicians to delay ordering the tests until 
after the 14 days; others are cancelling orders altogether. These 
disincentives create obstacles for physicians and their patients, and 
genuine barriers to access these beneficial tests.
  These rules also create substantial hardship for the laboratories 
that are seeking to develop these tests. In order for the tests to be 
covered, hospitals must enter into agreements with the laboratories 
furnishing the tests. It is administratively overwhelming for these 
small laboratories to seek to enter into agreements with all potential 
originating hospitals, which may number in the thousands when 
considering sites where tissue may be stored.
  The legislation that I am introducing today with Senator Wyden would 
require CMS to take a small, but important step toward facilitating 
Medicare beneficiary access to innovative, life-saving diagnostic tests 
by updating the ``date of service'' regulation. Specifically, the 
Patient Access to Critical Lab Tests Act would permit independent 
laboratories offering complex diagnostic laboratory tests to bill 
Medicare directly for tests performed anytime following a patient's 
hospital stay, without forcing the hospital into an unnecessary 
middleman role.
  Given the promise of these new technologies, it is important that all 
regulatory regimes keep pace with the rapidly evolving world of science 
and technology, and operate to promote innovation. Out-dated 
regulations and calcified regulatory agencies can stifle innovation and 
prevent new life-saving diagnostics and therapies from ever coming to 
market. They can also serve as a drag on our economy.
  Fixing this rule is a matter of critical importance to Medicare 
beneficiaries, as well as to the laboratories developing these 
technologies.
  I encourage colleagues to join Senator Wyden and me in cosponsoring 
this bill. I likewise urge Senators Baucus and Grassley to consider 
this important measure as part of health care reform.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1220

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patient Access to Critical 
     Lab Tests Act''.

     SEC. 2. FINDINGS; SENSE OF CONGRESS.

       (a) Findings.--The Congress finds as follows:
       (1) Timely access to laboratory testing is essential to 
     ensure quality of care for patients.
       (2) Genetic and molecular laboratory testing are the new 
     cornerstones of high quality, cost-effective preventive 
     medicine.
       (3) The completion of the Human Genome Project in 2003 
     paved the way for a more sophisticated understanding of 
     disease causation, which has contributed to the advent of 
     ``personalized medicine''.
       (4) Personalized medicine is the application of genomic and 
     molecular data to better target the delivery of health care, 
     facilitate the discovery and clinical testing of new 
     products, and help determine a patient's predisposition to a 
     particular disease or condition.
       (5) Personalized medicine offers the promise of smarter, 
     more effective, and safer care as physicians and patients 
     become equipped with better information to guide treatment 
     decisions.
       (6) Some of the most encouraging personalized medicine 
     developments involve highly specialized laboratory tests 
     that, using biomarkers and vast stores of historical data, 
     provide individualized information that enable physicians and 
     patients to develop personalized treatment plans.

[[Page 14339]]

       (7) Several outdated Medicare regulations for laboratory 
     billing are obstructing access to highly specialized 
     laboratory tests and delaying patients' diagnoses and 
     treatments. These same rules are discouraging investments in 
     development of new tests.
       (8) Realizing the promise of personalized medicine will 
     require improved regulation that appropriately encourages 
     development of and access to these specialized tests.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) where practical, Medicare regulations and policies 
     should be written to promote development of and access to the 
     highly specialized laboratory tests referred to in subsection 
     (a)(6); and
       (2) the Medicare regulation described in section 414.510 of 
     title 42, Code of Federal Regulations, is one such regulation 
     that should be revised to permit laboratories furnishing 
     certain specialized tests to bill for and be paid directly by 
     Medicare for furnishing such tests.

     SEC. 3. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC LABORATORY 
                   TESTS.

       (a) In General.--Notwithstanding sections 1862(a)(14) and 
     1866(a)(1)(H)(i) of the Social Security Act (42 U.S.C. 
     1395y(a)(14) and 1395cc(a)(1)(H)(i)), in the case that a 
     laboratory performs a covered complex diagnostic laboratory 
     test, with respect to a specimen collected from an individual 
     during a period in which the individual is a patient of a 
     hospital, if the test is performed after such period the 
     Secretary of Health and Human Services shall treat such test, 
     for purposes of providing direct payment to the laboratory 
     under section 1833(h) or 1848 of such Act (42 U.S.C. 1395l(h) 
     or 1395w-4), as if such specimen had been collected directly 
     by the laboratory.
       (b) Covered Complex Diagnostic Laboratory Test Defined.--
     For purposes of this section, the term ``covered complex 
     diagnostic laboratory test'' means an analysis--
       (1) of DNA, RNA, chromosomes, proteins, or metabolites that 
     detects, identifies, or quantitates genotypes, mutations, 
     chromosomal changes, biochemical changes, cell response, 
     protein expression, or gene expression or similar method or 
     is a cancer chemotherapy sensitivity assay or similar method, 
     but does not include methods principally comprising routine 
     chemistry or routine immunology;
       (2) that is described in section 1861(s)(3) of the Social 
     Security Act (42 U.S.C. 1395x(s)(3));
       (3) that is developed and performed by a laboratory which 
     is independent of the hospital in which the specimen involved 
     was collected and not under any arrangements (as defined in 
     section 1861(w)(1) of such Act (42 U.S.C. 1395x(w)(1)); and
       (4) that is not furnished by the hospital where the 
     specimen was collected to a patient of such hospital, 
     directly or under arrangements (as defined in section 
     1861(w)(1) of such Act (42 U.S.C. 1395x(w)(1)) made by such 
     hospital.

     SEC. 4. EFFECTIVE DATE.

       The provisions of section 3 shall apply to tests furnished 
     on or after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Roberts):
  S. 1221. A bill to amend title XVIII of the Social Security Act to 
ensure more appropriate payment amounts for drugs and biologicals under 
part B of the Medicare Program by excluding customary prompt pay 
discounts extended to wholesalers from the manufacturer's average sales 
price; to the Committee on Finance.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation that will help ensure Medicare beneficiaries' 
access to cancer drugs provided by community-based cancer clinics.
  Cancer takes a great toll on our families, friends, and our Nation. 
On average, one American dies from cancer each minute and the overall 
cost of cancer to the U.S. is $220 billion annually. While these 
statistics are daunting, the rate of cancer deaths in the U.S. has 
decreased since 1993. This decrease is the result of earlier detection 
and diagnosis, more effective and targeted cancer therapies, and 
greater accessibility to quality care provided by oncologists. These 
vital services have allowed millions of individuals to lead healthy and 
productive lives after successfully battling cancer.
  Leading the treatment against cancer, community cancer clinics treat 
84 percent of Americans with cancer. Community cancer clinics are 
freestanding outpatient facilities that provide comprehensive cancer 
care in physician's office settings located in patients' communities. 
These clinics are especially critical in rural areas where access to 
larger cancer clinics is not available.
  In 2003, the Medicare Prescription Drug Improvement and Modernization 
Act was signed into law. This legislation contained numerous provisions 
that were beneficial to America's seniors and medical facilities; 
however, it also provided a reduction in Medicare's reimbursement for 
cancer treatment. The new Medicare drug reimbursement rates, based on 
average sales price or ASP, are artificially lowered by the inclusion 
of prompt payment discounts. These discounts are provided by the 
pharmaceutical manufacturer to the distributor and are a financing 
mechanism between the manufacturer and the distributor for prompt 
payment of invoices. As such, they are not passed on to community 
oncology clinics, which purchase drugs from distributors. However, 
pharmaceutical manufacturers are required by statute to include all 
discounts and rebates in the calculation of ASP, including prompt 
payment discounts that are not provided to community oncology clinics. 
The inclusion of these prompt payment discounts results in the 
artificially lowering of Medicare drug reimbursement rates by 
approximately 2 percent. Community cancer clinics are reporting that 
they are finding more cancer drugs reimbursed by Medicare at a rate 
less than their cost.
  The Congressional Budget Office estimated that Medicare 
reimbursements to oncologists would be reduced by $4.2 billion from 
2004-2013. PricewaterhouseCoopers estimated that reductions will reach 
$14.7 billion over that time. This increased reduction will have a 
debilitating effect on oncologists' ability to provide cancer treatment 
to Medicare beneficiaries, especially those in the community setting.
  This legislation will remove manufacturer to distributor prompt 
payment discounts from the calculation of ASP to provide a more 
appropriate Medicare drug reimbursement and will help ensure Medicare 
beneficiaries' access to community-based cancer treatment. I encourage 
my colleagues to work with me to move this legislation forward 
promptly.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1221

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

     SECTION 1. 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.

       (a) In General.--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 ``(other than 
     customary prompt pay discounts extended to wholesalers)'' 
     after ``prompt pay discounts''; and
       (2) in the second sentence, by inserting ``(other than 
     customary prompt pay discounts extended to wholesalers)'' 
     after ``other price concessions''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to drugs and biologicals that are furnished on or 
     after January 1, 2010.
                                 ______
                                 
      By Mr. McCONNELL (for himself, Mrs. Feinstein, Mr. McCain, and 
        Mr. Durbin:)
  S.J. Res. 17. A joint resolution approving the renewal of import 
restrictions contained in the Burmese Freedom and Democracy Act of 
2003, and for other purposes; to the Committee on Finance.
  Mr. McCONNELL. Mr. President, I rise to introduce the annual renewal 
of the Burmese Freedom and Democracy Act of 2003. Once again, I am 
joined by Senators Feinstein, McCain and Durbin who have been steadfast 
and longtime advocates for the Burmese people.
  This resolution extends for another year the sanctions that are 
currently in place against the illegitimate Burmese regime, the State 
Peace and Development Council, SPDC. This bill would keep those 
sanctions in place unless and until the regime takes a number of clear 
steps towards democracy and reconciliation. This measure also includes 
renewal of the enhanced sanctions enacted last year as part of the

[[Page 14340]]

Tom Lantos Block Burmese JADE Act of 2008.
  As many of my colleagues know, the news from Burma has been 
particularly troubling of late. Nobel Peace Prize winner Daw Aung San 
Suu Kyi, who has been under house arrest for 13 of the last 19 years, 
was charged last month with permitting a misguided American to enter 
her home. As a result, she faces up to 5 years in prison. My colleagues 
in the Senate and I remain deeply concerned about the outcome of her 
``trial.'' I was pleased that the Senate responded to this outrageous 
prosecution by unanimously passing S. Res. 160, which condemned the 
``trial'' of Suu Kyi and the dubious actions taken by the SPDC against 
her.
  The Obama administration has indicated that a new strategy on Burma 
is forthcoming, and I look forward to reviewing it. Whatever the 
content of this strategy, it appears from correspondence between my 
House colleagues and the State Department that the administration will 
continue to support sanctions against the Burmese regime, even as it 
considers additional means of effecting positive change in the troubled 
country.
  Mr. President, I ask unanimous consent that the text of the joint 
resolution be printed in the Record.
  There being no objection, the text of the joint resolution was 
ordered to be printed in the Record, as follows:

                              S.J. Res. 17

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled,

     SECTION 1. AMENDMENT TO BURMESE FREEDOM AND DEMOCRACY ACT OF 
                   2003.

       Section 9(b)(3) of the Burmese Freedom and Democracy Act of 
     2003 (Public Law 108-61; 50 U.S.C. 1701 note) is amended by 
     striking ``six years'' and inserting ``nine years''.

     SEC. 2. RENEWAL OF IMPORT RESTRICTIONS UNDER BURMESE FREEDOM 
                   AND DEMOCRACY ACT OF 2003.

       (a) In General.--Congress approves the renewal of the 
     import restrictions contained in section 3(a)(1) and section 
     3A (b)(1) and (c)(1) of the Burmese Freedom and Democracy Act 
     of 2003.
       (b) Rule of Construction.--This joint resolution shall be 
     deemed to be a ``renewal resolution'' for purposes of section 
     9 of the Burmese Freedom and Democracy Act of 2003.

     SEC. 3. EFFECTIVE DATE.

       This joint resolution and the amendments made by this joint 
     resolution shall take effect on the date of the enactment of 
     this joint resolution or July 26, 2009, whichever occurs 
     first.

  Mrs. FEINSTEIN. Mr. President, I rise today with Senator McConnell to 
introduce a joint resolution renewing the ban on all imports from Burma 
for another year.
  I regret that we must take this action once again.
  I had hoped that since we last took up this resolution last year, the 
ruling military junta, the State Peace and Development Council, SPDC, 
would have, at long last, heeded the voices of the people of Burma and 
the international community and put Burma on a path to democracy, human 
rights, and the rule of law.
  Sadly, the regime responded to these calls in true fashion, by trying 
yet again to break the will of Burma's democratic opposition and stifle 
any movement for change.
  Just last month, the military junta arrested and detained Nobel Peace 
Prize Laureate and Burma's democratically elected leader Aung San Suu 
Kyi on trumped-up charges of violating her house arrest.
  Currently standing trial--behind closed doors and without due 
process--she faces up to 5 years in prison if convicted. This will come 
on top of spending the better part of the past 19 years isolated and 
alone under house arrest.
  The regime's actions should come as no surprise. They represent yet 
another attempt to hold on to power and crush any opposition.
  Almost 20 years ago, it annulled parliamentary election results 
overwhelmingly won by Aung San Suu Kyi's National League for Democracy.
  Six years ago government-sponsored thugs attempted to assassinate Suu 
Kyi and other members of her National League for Democracy by attacking 
her motorcade in northern Burma.
  Two years ago, the regime brutally put down pro-democracy 
demonstrations of the Saffron Revolution led by Buddhist monks.
  And last year, we saw the regime ignore offers made by the 
international community and international humanitarian organizations to 
help Burma respond to the devastation caused by Cyclone Nargis, leading 
to countless deaths of innocent civilians.
  In addition, they imposed a new constitution on the people of Burma, 
one that was negotiated behind closed doors without the input of the 
democratic opposition and one that will entrench the military's grip on 
power.
  The SPDC understands all too well that the vast majority of Burmese 
citizens embrace Suu Kyi's call for freedom and democracy and reject 
the junta's oppressive rule.
  That is why they are trying once again to silence her voice.
  We cannot allow this brutal dictatorship to succeed.
  For those of my colleagues who are disappointed with the lack of 
progress in bringing freedom and democracy to Burma since we first 
enacted this ban in 2003, I share their disappointment.
  But now is not the time to turn back. Now is not the time to reward 
the regime for its oppressive tactics by lifting any part of our 
sanctions regime on Burma.
  It has not made ``substantial and measurable progress'' towards:
  ending violations of internationally recognized human rights;
  releasing all political prisoners;
  allowing freedom of speech and press;
  allowing freedom of association;
  permitting the peaceful exercise of religion and;
  bringing to a conclusion an agreement between the SPDC and the 
National League for Democracy and Burma's ethnic nationalities on the 
restoration of a democratic government.
  By renewing the import ban we express our solidarity with Aung San 
Suu Kyi and the democratic opposition who bravely stand up to the 
regime and reject their abuses.
  They understand that the import ban is not directed at the people of 
Burma, but at the military junta that dominates economic and political 
activity in their country and denies them their rights.
  And I remind my colleagues that this import ban renewal is good for 1 
year and we will have the opportunity to revisit this issue again next 
year.
  I am hopeful that the United Nations Security Council and the 
international community will follow our example and put additional 
pressure on the SPDC to release Aung San Suu Kyi and all political 
prisoners immediately and unconditionally and engage in a true dialogue 
on national reconciliation, one that will lead to a truly democratic 
constitution.
  I urge my colleagues to pass this Joint Resolution as soon as 
possible.

                          ____________________